Why 1+0 Doesn't = 2...

I was asked the other day, by a new freight broker agent, why are my shippers protected but my trucks aren’t? Why, since I’m spending most of my time looking for trucks, when I find a truck and set them up for my company does everyone else get to use them and I make nothing as the agent for them using the truck I set up? In short, I set-up my shippers and they are mine and my broker won’t allow another agent in the company to work them, but trucks…anyone can.

At first read, I’m sure you were just as dumfounded as I. But try to answer that question…Why is the broker agent rewarded nothing for setting up the carrier? Obvious answer is that the shipper is the one paying the bill and we (the broker) are paying the carrier. True but a considerable amount of time and effort went into locating that carrier, so shouldn’t the agent be rewarded when another in the company use that carrier to move their load?

Believe me when I say that when I first tried to answer this question I knew the answer was no. An absolute no, the agent should not be rewarded for another agent using the carrier that the original agent had set-up. However, when you try to explain this (minus the obvious answer of the shipper pays) you find yourself starting to wonder the same thing. The arguments for protecting the agent’s carrier and providing a financial reward to the agent when one uses the carrier they set up are compelling.

But the answer is still no! Agents do not and should not be paid for setting up carriers. Besides the obvious, the shippers pay the freight bill, let’s look at several other reasons…

1) A carrier set-up is not with the agent, but with the company. Carriers are not set-up for financial consideration to the company per se, but as a vendor. We contract the carrier’s services to perform a function for our client (whom is set-up for a financial consideration), the shipper. As a rule we must “set-up” the carrier in order to perform our due diligence in order to assure that this “vendor” will meet our clients “shippers” needs. Once the carrier is set-up with the information on file at the company, the agent is free to use that carrier with any shipper that is now or may become a shipper of the company. Allowing agents to have protected carriers would literally hog tie the company where no one could benefit. For instance, broker 1 set up a carrier, broker 2 has a shipper that can use that carrier. Broker 2 notices that the carrier is available, however broker 1 was the originating agent for that carrier. What does broker 2 do? Call the carrier direct and forego a percentage of their commission only because broker 1 was the agent that set the carrier up, or call another carrier? For now, let’s say broker 2 decided to find another carrier. Now broker 2 and the company has lost. Broker 1 was never really in the equation except only to halt the deal.

2) Continuing from the preceding scenario, broker 2 sees that almost any truck they find to move one of their loads has already been set up by another broker. Finally broker 2 decides to quit prospecting shippers and only prospect carriers. Why not, it’s really easy to call a trucking company and say I’m going to set you up so if you have an empty truck you will be able to use our company. With this type of attitude it won’t be long before the broker is out of business. They have plenty of carriers, but no loads. This is nearly the equivalent to stopping people on the street and saying, hey I have a product that you might buy in the future can I get your shipping information now so if you buy it, I’ll have it?


3) In order to complete a load we need a shipper and a truck. I can have all the truck’s I want, but without someone to pay me to use them I only have trucks. The same can be said about loads, I can have all the loads I want but without a truck I only have loads. However there is a huge difference. The shipper is a customer while the truck is a vendor. Let’s stretch that out a bit further… the shipper is our customer, we are the shipper’s vendor and the carrier is our vendor. As shippers use numerous vendors to complete their business so do we. A broker only seeking trucks will never make a dime. How could they? They have no customers to pay them, only vendors in which to pay which they can’t because they have no work for the vendor to perform.

Are you more confused now than when this started? Me too…almost. The only reason I believe that I brought this to the table was because I’ve seen agents first seek to prospect carriers first. They attempt to build a relationship with the carrier then move to setting up accounts. This is fine if that’s the way you choose to work, not my way but fine just the same. However when you wish to be paid for only sending some paperwork back and forth and nothing else (no load, no financial consideration, no shipper) forget it, that’s not business. The person doing the negotiating, finding the shipper, the load, the truck…that’s the person that is doing business.

If you are one that has chosen to contact carriers and set them up first, that’s fine. But you need to ask yourself a question and be 100% honest about it... are you contacting the carriers first because you are afraid of contacting the shippers? Eventually you are going to have to call a shipper…Today’s a good day to call shippers and prospect!

Eight Years Later

Originally posted on our first blog September 11, 2006...

In every life there are events that happen which one remembers the smallest of details as to what they were doing at that exact moment or where they were when they heard the news. September 11, 2001 is one of those events. The difference in this event as opposed to others was this marked the 1st day of a changed nation if not world.

September 11, 2001 started for me as any other morning. I was up early, made coffee, and went down the hall to my office. My office was in my home but I normally didn't have the TV on. I was doing what I always did every morning. Looking over the loads I had to move for the day, post loads, check truck availability...just another day at the office.

By 7:00 A.M. the phones were beginning to ring, emails began coming in, carriers accepting loads, shippers scheduling loads...another busy day in the life of a freight broker. Then it stopped! It was so sudden that I remember thinking that my phones had quit working. One minute I was brokering freight, had people on the phone holding, emails being received, faxes being received...and suddenly, as if someone had turned a switch, nothing. A complete eerie silence.

I was the only one in my house and I didn’t have the TV on, so I hadn’t a clue. As odd and eerie as I new the events were I still moved forward. I picked up the phone and called a carrier to discuss a load. I still remember the conversation “oh man, we’re not doing nothing right now. Have you seen the news? A plane just hit the WTC….”

What?

So much has changed since that one phone call.

God Bless America!

Hard To Believe It's September 2009...

What a rollercoaster ride it’s been over the past couple of years. Everyone, including us, has been so concerned about the economy and everything else affecting our lives that keeping our eye on our businesses has become more than a full time job, it has become our lives. In order to have a chance of survival, it had to.

From talking to many business owners it’s apparent that many went from working the traditional 9-5, Monday – Friday to working seven days a week from the time they got out of bed to the time they returned. Weekends and vacations have become a thing of the past. A luxury one couldn’t afford, at least for now.

Taking the time to review our previous posts before all started to grind to a screeching halt, we somewhat saw this economic tsunami coming. The problem was that by the time it was recognized for what it was it had already landed. Over 1000 trucking companies went out of business in the first quarter of 2008. This statistic repeated itself in the 2nd quarter.

Much of this can be blamed on the high fuel prices at the time. You’ve got to admit we may have joked about $5.00 a gallon diesel, but did we really think we’d see it? I remember back to my days of being a small fleet owner and giving drivers warnings for purchasing fuel that was over $1.00 per gallon, sadly that wasn’t that long ago.

Although fuel prices can carry much of the blame, the truth of the matter is that far too many trucking companies are unable to establish their own accounts and instead use brokers for all of their loads. A trucking company can’t exist using a broker 100% of the time. By using this practice a trucking company can easily be giving away thousands of dollars per month.

On average a freight broker will take anywhere from 10%-15% off the top. If a trucking company is running an average 3000 miles per week for an average market rate of $1.50 per mile the gross is $4,500.00 per week. If a broker is being used for 100% of the trucking company’s loads, the trucking company is giving away $675.00 a week, per truck!

A trucking company with their own accounts should only be using a freight broker for approximately 50% of their loads. In other words, the trucking company has their own accounts (head hauls) and only use brokers for reloads (back hauls).

By doing this the trucking company can add approximately $337.50 to their bottom line per week, per truck. For many trucking companies a truck payment. Over the course of a year they could add $17,550.00 to their bank account.

How many of the 2,000 trucking companies could have used an extra $17,550.00 in their bank accounts when things got bad?

In our Freight Broker Workshops we tell all of our clients that a freight broker is the most misused tool in the transportation industry. When used correctly, one of the best tools a trucking company could have in its arsenal.

We can show you how to find your own accounts and add that extra cash to your bottom line. To learn more about our Workshops, tools, and services visit our website at www.taltoa.com.

Our Outlook For The RV Transport Industry

It's no secret, the last year has been tough on the RV industry with motorized (motorhomes) taking the biggest hit. Starting with fuel prices and then moving to the economy slow down and now the credit crunch, it's been a rough ride to say the least. But there is light at the end of the tunnel and it's starting to get brighter.

Actually when we speak of the RV Transport industry we are speaking of the RV industry in general. What happens to the RV Transport industry is a direct result of what is happening with the RV industry as a whole.

We have been telling our clients for quite some time that this was going to be a hurricane type problem. The first wave would hit (high fuel prices with an economy slow down), the eye would come ashore (everyone getting use to the prices and slowdown with money belts loosening), then the backside of the storm would hit which would be the most devastating (the markets and banks taking a dive making money tight).

From the onset of high fuel prices manufacturers came to the realization that business as normal must change. The industry must be reinvented! What does this all mean? Well it's gonna take more than fancy marketing, and all indications reflect that the manufacturers know this and are taking action.

Currently the manufacturers are backing up a bit, instead of the bigger is better attitude which has prevailed in the industry for years it's beginning to go retro with all the trimmings. Smaller, lighter and loaded with all the amenities buyers love. This is an appropriate first step.

I believe that the manufacturers will also come up with a plan for financing as well. As we tread through the backside of the storm and its aftermath, most will find it difficult if not impossible to get an RV financed. A year ago a credit score of around 600 could get you in, I won't be surprised if it takes at least a 700 to be considered.

Knowing this the companies will have to find some type of creative financing to keep the cash flowing. If not sales will continue their decline, dealerships will cut-back or close and layoffs or plant closures will be imminent. If I know this I know the manufacturers do.

As such the industry will do more than just apply band-aides they will have solutions. Now that the slow season is upon us the change can begin. From last word we have received look for the industry to start showing life again in February '09.

Will next year be better? Most definitely. Fuel prices will be stable, manufacturers that have survived will be stronger, dealers will be buying more, old "new" units will be heavily discounted and the country as a whole will be ready for a vacation.

Shipper Directories

Shipper Directories are probably the most misunderstood if not the most misused tool in a freight broker’s arsenal. Not a week goes by that we don't receive the highest praise from individuals concerning our Shippers Directory... and at least one letter of contempt.

It amazes me that each letter of contempt carries a common theme of the directory being just a list of companies with contact information and no more. A Shippers Directory, be it ours or anyone else's is just that... a list of companies with contact information. By no means are the directories a guaranteed source of accounts, they are only ONE tool for generating leads.

The nice thing about the directories is that you don't just use them once, they should be used and re-used. Our directory is designed so that you may add notes as you are speaking with a prospect. This allows the user to know, without having to find the legal pad they used that day while prospecting, what was discussed during the prospect call. To know when to call back, to have the name of the contact or any other information that may assist in converting the prospect into a customer.

It should be used daily if only to refresh yourself on the notes you have taken so that you don't miss something. Have 5 different directories? Then you should have 5 to review daily. If you’re not, you’re missing sales! Your losing money!

As a freight broker you should be prospecting every day. Not just looking up companies to call but actually contacting them. No one likes to prospect or cold call for that matter, but it's a fact of our business. If your not prospecting new accounts you're already out of business, you just don't know it yet.

Our clients are advised to make 10 prospect calls per day. One of the reasons is to get them in the habit of prospecting. I read in a research study a while back that it takes approximately 2 weeks of doing something to make it a habit, part of your routine. It's so crucial that a freight broker prospects that it needs to become habit, part of their routine.

Here's why...

Meet Joe, he's a new freight broker ready to set the world on fire. He prospects, makes the calls and does everything exactly like he's suppose to...then he starts making $1,000.00 a week and decides that instead of prospecting today he's going to play a round of golf. Tomorrow he figures that he's making enough money, he'll prospect next week.

Joe has four accounts that earn him commissions of $1,000.00 per week. To keep this simple let's say that each account is responsible for 25% of Joe's income. It took Joe about 90 days to develop each client. Today Joe calls one of his accounts to find out that his contact isn't there anymore. They have been terminated. There's someone new and they have their own people they deal with and Joe ain't one of them.

In one fleeting moment, one that Joe had absolutely no control over, he lost 25% of his income. With nothing to replace it because he hadn't been prospecting, he must start now. Joe knows that it could take him as long as 90 days to replace the income he lost.

You get the picture. Things can go south quickly! As such you must prospect daily. A shipper directory is a tool designed to help you save time prospecting by providing names, numbers and other information about shippers. You must provide the skills and techniques needed to convert the prospect into an account... these skills & techniques can be learned.

New Blog - Same Company...

Welcome to the "New" Blog of TALTOA. If you've been keeping up with us over the years you know that we have had a Blog from almost day one. You may be asking, what's this? Well to explain in detail would require us to write a book so to keep a long story short we wanted to have our Blog under the same name of our main company, TALTOA.

If you noticed our original Blog was under the name of FBT 101 which is the freight broker division of TALTOA. However if you read the post's you will see that they cover more than just being or becoming a freight broker. In order to bring everything home, so-to-speak, we have created our "New" Blog under the TALTOA heading. If you're new to our Blog you can click the "Original Blog" link and read all of our post's from day 1.

If you're familiar with TALTOA then you know who we are and what we do. For those of you that are new to TALTOA, we are a transportation and logistics training and consulting company based in Fort Smith, Ar. Our origins date to the early 90's when we were just a freight brokerage. At that time we had more accounts than we could service and we needed agents. The problem was that we needed agents that would service our clients the way our clients had come to expect from our brokerage.

We chose to bring in agents that had little to no transportation experience. This way we knew we could train them in the skills and techniques that had made us successful. No easy task to do all of this while still servicing our clients. To achieve the success with our training program we needed a manual, hence the Freight Broker Training 101 Manual. Next we needed a type of curriculum in order to take our new agents through our training program. Although we didn't know it at the time, these were the first Freight Broker Training Workshops.

After much success someone joked one day that we should bottle our program and distribute it, and that's basically what we did. Over the years there have been changes such as new products and services, new areas of expertise were added to our consulting packages so that name Freight Broker Training 101 didn't quite define us correctly. It was obvious that we were a full service transportation and logistics training and consulting company.

After much talk and thought TALTOA was created to house all of our services. The name TALTOA was originally an abbreviation for Transportation and Logistics Training of America. Now it's just TALTOA because we offer so much more than just training. We have Manuals, Directories, Web Design, Consulting, Software, and Subscription Services with more tools/services being added on a regular basis.

Over the years we have consulted hundreds of transportation companies, trained thousands of transportation professionals, provided services to scores of individuals wishing to enter or further their transportation career.

Our success have been our clients success. From a freight broker agent contracting our services and with-in 45 days earning as much as $1,000.00 per week. The new freight brokerage that contracted TALTOA for 15 months to consult them in their start-up and day-to-day operations that was able to move 2000 loads in less than a year, their first year!

From the transporter that wanted to transport RV's that now owns his own transportation company, from the trucking company that needed a new source of revenue that contracted us to assist them with their brokerage. The former NFL cornerback that contracted TALTOA to assist him with his role in the trucking company he was investing in.

Although we can't guarantee anyone’s success, we can guarantee that your chance of success is greatly improved by having TALTOA as part of your team! We have a history of success and that's why so many have chose us to assist them when needed.

So, although a new Blog.... we're still the same company --- TALTOA!