Eli: 0:00

Freight brokerages that operate with an agent model are a widely popular option used by shippers around our nation. These companies offer their service at a high level as they prioritize customer service and follow through over everything. As you continue your pursuit of a well optimized transportation network agent model, freight brokerages are certainly worth considering. But what is an agent model freight brokerage. I'm your host, Eli Simonson. And in this episode of beyond the road, we'll sit down with the Vice President of Sherway transportation, a full service freight brokerage operated by freight agents to discuss what these brokerages truly bring to the table. Stick around. Welcome back to another episode of beyond the road, the transportation industry podcast where we talk all things transportation and logistics. Joining me today is Paul Kilmer.

Paul: 1:14

How're you doing?

Eli: 1:15

Pretty good, how are you?

Paul: 1:16

So good.

Eli: 1:16

Thanks for taking time out of your busy day, Paul to talk all things agent model freight brokerages. And I don't know if that's the appropriate term. Would you call it an agent model brokerage?

Paul: 1:28

Yeah, yeah. Sureway a company that has an agent model. ATS, Sureway as part of Anderson tracking service and ATS logistics and and we're the agent, platform. Agent provider. Yeah, so the agent model.

Eli: 1:41

So you're a company of freight agents?

Paul: 1:43

Yep.

Eli: 1:43

Let's talk a little bit about your history and transportation. I know, you know, just looking at your LinkedIn profile. And maybe a little bit about you on the Sureway website. It seems like you've been in transportation for a good portion of your career, what have you been doing over all that time, 16 years or so?

Paul: 1:59

Actually, going on 22 ATS and I took the reins of the Sureway agent model in ther late 2016. Prior to that, I had a short stint with a brokerage company down in Prairie, Minnesota, but been with ATS for 22 years now. And again working with agents since 2016.

Eli: 2:27

And you've been working almost exclusively on the brokerage side of ATS, Correct?

Paul: 2:32

Yes. Yep. And while I've been in that role, I was able to interact with the asset divisions and and work with them really closely. Covering the overflow for it not only with the flatbeds and the bands but the heavy haul and and even some wind energy.

Eli: 2:50

Right so you've gotten into a lot of different kinds of freight which is really cool. Was Sureway, correct me if I'm wrong, was Sureway ATS as a company's first kind of step into that world of freight brokerage and then ATS logistics came next?

Paul: 3:02

Yeah, the original name was Sureway transportation. Okay, and then we renamed it to ATS logistics DBA Sureway. And that was in we got the broker athourity. ATS got brokerage authority in 1989.

Eli: 3:15

And at this point, I don't know if you can speak to maybe exact numbers or whatever, but how many people are working for ATS are under the Sureway name?

Paul: 3:24

Sure, we've got about 90 outside agents, currently. And they're supported by a group of six employees. And then the administrative side the accounts payable, accounts receivable and credit team lend a tremendous amount of support also.

Eli: 3:43

There's a little bit of, you know, a lot of unique qualities that an agent model brokerage would have, as opposed to a traditional brokerage, so to speak, and that's what we kind of want to address in this podcast for those for those companies that would be thinking about, you know, filling their transportation network, what kind of company should they be working with. An agent model freight brokerage is definitely a viable option.

Paul: 4:03

Yeah, yeah. And honestly, the shipper might not even realize that there's a difference because an agent operates under the brokerage's authority and insurance. They operate inside of their technology. So oftentimes, a shipper won't even necessarily know the difference, but they sure might, because agents are pretty proud of the business that they've developed in there. They've got a real strong entrepreneurial spirit. They really partner a lot of times with shippers.

Eli: 4:32

So a freight agent is essentially a business owner.

Paul: 4:36

Yep.

Eli: 4:36

That would then operate under the brand of whatever company it is that they are because they're not technically an employee of Sureway transportation.

Unknown: 4:45

Correct. They're not an employee and they operate, again, underneath the authority and insurance of the brokerage in this case, ATS Logistics Sureway Transportation.

Eli: 4:55

Interesting.

Paul: 4:56

Yep, yeah.

Eli: 4:56

So whereas you're getting with ATS logistics You have 10 that no, you have employees, like full time employees that are paid a base salary and then commissions, but a freight agent, they are not paid a salary.

Paul: 5:09

Correct.

Eli: 5:09

They're 100%, just based on their own, whatever they're bringing in.

Paul: 5:13

The agent model. Typically, I have never seen one with a base pay. So yeah, the agent model at Sherway and other agent providers, it's 100%. commission based, takes a real, again, an entrepreneur to go out and make a good go of it and be successful.

Eli: 5:32

Yeah, for sure. It gives you a lot opportunity. If you're if you're a self self starter, and you're interested in the freight business to be an agent. As the customer of a freight agent or someone that Sureway would be working with, there are some unique strengths that that an agent-based provider brings to the table and what what would those be working with a brokerage?

Unknown: 5:52

So from the providers perspective? Sureway, what strengths does Sureway bring to the table? the company has to have a great brand, a good reputation, strong financials. A lot of times it boils down to carrier base, how many carriers does that brokerage company have in their in their database? And how many do they work with? And then process and support the carrier compliance process? The credit process? What kind of support? Does the company provide the agent that, you know? Do they provide the technology? Do they provide load boards? Do they charge the agent for any of that stuff? Or those are all questions that somebody considering becoming an agent would want to ask the provider?

Eli: 6:38

Sure. And as the customer of Sureway agent, primarily, all you're really concerned about is right is getting that solution in a timely, cost effective manner. Right. And as a freight agent, based on my understanding, they don't have an operations department. Correct. So they are completely 100% responsible for managing the relationship with the carriers. And then the shipper as well. I guess when you were talking about that, that carrier base having that wide network of carriers, how does that what does that look like for an agent provider? Like how are they maintain those relationships and vetting those? Those trucking companies? Yep,

Paul: 7:12

Yep. So that's, that's the carrier compliance side of the business. Yeah. And more and more often, a broker is partnering with a third party to automate and make that service available online 24/7, we do that we've got a third party that is able to get our contract electronically signed, they feed us the insurance information, it's if the third party has the carrier's insurance information online already, it's really just down to a couple of minutes process. It just depends on how fast the carrier can sign the contract electronically. And typically, that's pretty quickly. So we're able to onboard new carriers into the system very quickly. So that's one another aspect of the support that the provider, the agent model platform provides.

Eli: 8:06

Right, and they get pretty comfortable with those carriers over time, I'm assuming as an agent, you start to really develop those relationships with carriers that you utilize frequently.

Paul: 8:14

Yeah, we do see that and frequently as the key word. If you've got repeat lanes from repeat shipper, you start to develop that carrier base, and you really sort of partner with that carrier, and make sure that you're fulfilling their needs and finding freight that they want to move in and the more accustom and repetitive a lane can get for a carrier. Yeah, they can build other business around it, too. So repeat lands, just lends to repeat carriers.

Eli: 8:45

And just like any other business, and any other transportation company does does a single freight agent like to say someone who's working for sure, why do they develop areas of strength just themselves as a business things that they're comfortable doing? You know, maybe I'm good at servicing these, these lanes, and these are the things that I'm going to be doing?

Paul: 9:01

Yeah, what I've seen as agents get pretty they really become experts with a type of freight right commodity, or maybe an area they might specialize in, in this type of business. But they really over time, what I've seen is they really get specialized, it might take them a little bit to get there to kind of find their their niche, but over time they really get specialized and then experts in that type of move and that's not uncommon with you know, the traditional model of brokerage the employee side brokerage, I've seen the same thing there too, where people get pretty comfortable with a with a specific commodity and become experts in that.

Eli: 9:46

So in that way the agent kind of can become an extension of their customers supply chain a little bit there. Yeah, managing those logistics decisions.

Paul: 9:54

And really almost partner with them to in many cases.

Eli: 9:57

Any other unique strengths of asset you know, or not as invasive for the agent based provider? Obviously, it's, you know, they're highly motivated to provide great customer service and create ongoing relationships with their customers and carriers.

Paul: 10:10

Right, right. Agents agents are commission based. So yep. And then sometimes they've gotten maybe closer proximity to the shipper. Maybe that's how they got their start as an agent, they had close contact at a manufacturer. So sometimes, you know, I've seen that happen, a lot of times, it boils down to the relationship that a shipper has with the provider, right? Whether it's an employee or an agent, that relationship is critical to success for both parties.

Eli: 10:45

And really, also, the other thing you're thinking about here is that single point of contact, right, and like, you know exactly who you're going to need to reach out, reach out to as a shipper if something goes wrong. Or if you need something, you know, taken care of.

Paul: 10:56

And if you've got that relationship with that person, whether again, whether it's an employee or an agent, both both parties should be ready, willing, and able to answer that phone pretty much 24/7. Right? Answer questions, solve problems, provide and provide solutions, right?

Eli: 11:11

They're business owners, and they take pride in that. Very cool.

Paul: 11:13

For sure, for sure. And some of them, you know, are single operators, with a single agent in an office, cradle to grave booking the load finding the truck, making sure it gets picked up and delivered. Some agents, many agents grow to the point where they add employees, and they do get people to who find the freight and they help people find in the trucks. Oh, sure. So so you can actually have an agent grow in the same way you'd see a logistics company grow their employees,

Eli: 11:45

just having you mentioned that actually, kind of spurred a thought with me is like, do they do agents typically struggled to do like high volume, like volumes of freight, like move high volumes of freight, and it's just one of them, or to a couple of them?

Paul: 11:58

If it is a single operator? You know, everybody has their limits? Right? It kind of boils down to the commodity, also the very specialized commodity that that might move a little bit slower through the process? Or is it a commodity that, you know, picks up and delivers with very little maintenance or management. But yeah, everybody has their limits, an individual can really only do so much. But as an agent grows, and if they do add people, there's really no limit to the volume or the size of customer that they can handle.

Eli: 12:30

Can we talk about weaknesses? We talked about weaknesses of of an agent based company, we don't have to talk about the weaknesses of your agents, because all your agents are great. But like, just like the this kind of company is structured in this way, where you're not, you're not really a centralized organization, you don't have a hierarchy, you just have a bunch of individual operators supported by us.

Paul: 12:50

Yeah, we've stayed pretty close with our agents. Tight lines of communication I've got I've got my support team that receive inbound and make outbound phone calls to the agents all day long. Email, so all the support is there for the agent. From a shippers perspective, again, I really think it boils down to that relationship, that you've got a provider, if you've got a good relationship, they're going to step up to the plate every time for you specific weaknesses. Again, there's, there's so much similarity between the agent and the employee based models, that at the end of the day, the shipper might not even know, you know, cuz they're, they're contracting with ATS Sureway. So it really, they might not even know at the end of the day, if they're working with an employer or an agent.

Eli: 13:41

And just like any other company, an agent-based freight brokerage, or traditional freight brokerage would have obviously been individuals operating under their corporate structure that, you know, are of varying proficiency.

Paul: 13:53

And the agent provider, Sureway, this case, handles care compliance, handles the credit, does the invoicing pays the carrier receives the money from the customer pays the agent. So there's so much that happens back at the corporate office, that is done by the same people that service the employee side of the business? Oh, sure. That again, the customer receives an invoice from from St. Cloud, just like they do for any other freight that moves through the company.

Eli: 14:24

And I don't know if you can speak to this or not, but just based on your tenure in the industry, I'm guessing maybe you have some idea but like your main competitors, these other freight brokerages that operate with agents, do they do it in similar fashion, is it you know, they have individual business owners around spread throughout the nation in the world?

Paul: 14:44

Yeah, for the most part, they do it in a very similar fashion. Some of them. Some of the providers might have an agent that owns a bunch of trucks. That's that's one company that has has an agent model. I think it's more common than As the agents don't own trucks in there, they're just fulfilling the brokerage side of the equation.

Eli: 15:06

Right? Yeah, I, the one thing that comes to mind is Landstar. You know, biggest in the game? Probably.

Paul: 15:11

Quite a few of their agents might have a small fleet of trucks that they own. But they've they've grown to the point where they're not so much that either.

Eli: 15:20

Yeah, well, it's definitely an interesting business model. And now let's talk about if I'm a company that's interested in getting into business with an agent, adding an agent to my network, or company like sure what what would you suggest that that kind of shipper would think about when selecting provider surance, or based provider?

Paul: 15:38

Again, a lot of the same things they would look at with with whenever they're considering what brokerage company to work with, does that company fulfill their needs? Do they have the capacity? Do they have the bandwidth to satisfy and fulfill and take care of their shipping needs? And that's, you know, you should really, whenever you're getting into a relationship with a broker that loves or questions you're gonna want to ask, yeah, regardless if it's an agent or an employee, because again, the the they're working under the same technology, the same carrier database, the same financials, right? Whether it's an employer or an agent. So yeah, a lot of the same questions they would ask, right? Anytime they're adding a provider to their network,

Eli: 16:23

How much should longevity play into into that decision making process? Like how long the company has been in business? I'm sure that over time, you've seen Sureway, taking certain strides and gaining proficiencies and becoming a better rounded agent based provider over the however many years we've been in operation.

Paul: 16:40

Yeah, I put a lot of stock into the longevity of a company, especially in this industry. ATS has been around since what 1955. The broker just started in 1989. So we've been doing this a long time, we've developed a great name and brand and reputation in the industry, not only on the brokerage side, but on the asset side. Also, if I was a shipper, I would look for somebody that, you know, we hear it said all the time skin in the game, you know, they've got skin in the game, they're not going to just close the doors and go somewhere else. If I were was a shipper, that's what I would look for that stability, longevity, you know, again, Sureway has been doing this since 1989. I've got some I've got one agent that's been here pretty much the whole time. That kind of longevity, many, many agents that have been with us for well over 10 years. And that just leads to the expertise that they can provide to those shippers. You know, they understand rates, and they understand the different trends, the seasonality of different areas. So yeah, that expertise, that experience is really valuable for shipper.

Eli: 17:50

Yeah. And I've only been in transportation a short while, but yeah, there seems to be a lot of things you can only learn through experience. And a company like Sureway that has like this, this crazy, like extensive history, right? This that just displays how much investment you've made, right? Because you've you've invested in technologies as as they've been developed, right? You've been investing in, you know, employee outreach programs and.. .

Paul: 18:14

And other things like the federal requirement for a broker right now for a surety bond is$75,000. Sure, we voluntarily gotten to $250,000 We're in a small percentage of brokerage companies that have done that. And that's on the employee and Agent side, that's ATS Sureway. Overall. So yeah, we're we're willing to do what it takes and invest in the, in the program to do it. Right.

Eli: 18:42

Right. And yeah, as a shipper, you think about you know, your main concern was working with a broker, or at least one of the main concerns is just that low barrier to entry. Right? It's like, how do I know this guy is not going to just close up shop if you can't cover my load? Or, you know, I can't take any kind of financial instability?

Paul: 18:59

Yeah, they really can. The barrier to entry like you said, is pretty low. And that's where we put a lot of stock into our reputation that we have out there not only with shippers but with carriers carriers like working with us. We we've got a great Google review going, on the load boards were noted for our days to pay our credit worthiness, all that stuff. So carriers want to work with us too. And if you're a shipper, you definitely want to align with a broker that carriers want to work with right that's just going to help your freight get covered.

Eli: 19:30

Yeah, definitely. Spurs another thought actually is: how selective our freight broker or agent based freight brokerages in selecting the selecting the people that want to become agents, maybe you can speak to this process or, um, you know, because because you get a lot of things as an agent working for a great you know, industry renowned freight broker, you get a lot of things from that right?

Paul: 19:54

Yeah, one thing we basically we look for somebody that is bringing a book of business as an agent. So they have experience, they have experience, right. And they might not necessarily be able to bring that book of business but have experienced to the point where they can, they can work and develop a book of business again, if they've been an agent in the in the industry for a little while, they probably are able to have their book of business be portable. And so yeah, we look for people that are experienced. It's not the agent model. I'm generally speaking here, but especially for Sherway. It's not really a training ground. You know, it's somewhere that somebody's gotta come with experience.

Eli: 20:39

Right? Yeah, cuz it's valuable. It's valuable for them to be to be a part of the organization, definitely to be associated with the organization. For sure. Yeah. Just a fun little wrap up question. Kind of harking back to that individual who said has been with Sherway? For nearly since the beginning. Yeah. What, you know, what aspects of what they're doing, has made them successful? What have you observed, if someone was to become an agent, this will be good for someone who's thinking about becoming an agent. And also for someone who's trying to select an agent? What are like those qualities that made that that individual successful?

Paul: 21:12

You've got to be at first, and maybe even down the road, you kind of have to be a little bit of a gambler? Sure. Because you're you're going to typically, you know, you're going into 100%, commission, opportunity, right, there's a little bit of a gamble. So you got to be a little bit of a gambler, have some confidence. You got to know the business too. And then do what it takes to get done, especially in the beginning, when you're establishing that book of business and given customers confidence that you're going to get it done. That's really what it takes that confidence and decision making you got resilience to, you can't be afraid to make a decision. You got to you got to do it.

Eli: 21:55

Right. And I mean, those are qualities that you can see just by observing or or in your conversations with a freight agent, if you're a shipper. I'm sure that confidence that they have in answering your questions about you know, your commodity and the requirements where your rates are coming from. And

Paul: 22:10

Yeah, especially if they're experienced in the commodity that you happen to be shipping, they might oftentimes know more about what it takes to get it down the road than you do. Right. Cool. Yeah. Well, I

Eli: 22:22

Right. Cool. Yeah. Well, I appreciate you coming on.

Paul: 22:23

Absolutely. Thank you.

Eli: 22:27

Yeah, have a great rest of your day.

Paul: 22:28

You too.

Eli: 22:28

You've been listening to beyond the road the transportation industry podcast produced by Anderson trucking service. If you liked what you hear here today, make sure to follow along wherever you listen to podcasts, so you don't miss our next episode, which we publish weekly for more information on the topic of freight brokerage and what the different types are the asset base freight brokerage, the digital brokerage, the agent model, freight brokerage and more. I've put a link to an article outlining each of them below for more transportation industry specific information and content head over to the ATS Inc Learning Hub AT ATs inc.com/learning hub, also linked in the show notes below. On the Learning Hub, you'll find tools including articles, videos, case studies, podcasts, infographics, all created to help you become the supplier that always delivers for your customers. Topics covered on the Learning Hub include everything from what does a freight brokerage do to What does heavy haul trucking costs, so I invite you to check it out. Also, if you are interested in learning a little bit more about what they do over at Sherway transportation and what working with one of their agents could mean for your business and ability to deliver on your customer commitments. I have put a link to their website in the show notes below. Definitely check that out. It also might be interesting to kind of check that out if you are interested in becoming a freight agent and seeing what that could mean for your career. It seems like there are a lot of perks to becoming a freight agent, especially at a great company like Sherway So give that a peruse. Finally, I want to thank you again for following along and we hope to speak to you again soon on another episode of Beyond The Road.