Prospecting, Fuel Surcharges & Blind Loads | Final Mile 88

Nate Cross & Ben Kowalski answer your freight brokering questions and discuss:

🔍 How to find the right companies to prospect — and who to contact once you do
⛽️ How to calculate fuel surcharge when quoting a customer
🙈 What blind shipments are and why shippers use them

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Chapters

• 0:38 Listener Questions Introduction
• 1:13 How to Find Shipping Companies
• 7:26 Calculating Fuel Surcharges
• 12:06 Explaining Blind Shipments
• 18:55 Final Thoughts

Transcript

Speaker 1: 0:19

Welcome back. We've got another edition of the Final Mile. We're going to answer some of your listener questions that you've submitted to us today. These come from direct emails, sometimes through our contact form on our website, from YouTube, so continue to send them. Our content at Freight360.net, including the Freight Broker Basics course for all your educational options there, and you can check out all the sponsors in the description box that will help support the channel.

Speaker 1: 0:51

It's Quickscope, levity, blue Book Services and DAT. All right, first question today how do I figure out what companies to prospect? Once I do, how do I know who to reach at the company? So this is like one of the biggest, you know, general questions we get is like how do I find customers Right? And well, I'll give my take and then I'll let you give your your take on it as well.

Speaker 1: 1:17

Ben, I always tell people like don't overthink this, because you need to start somewhere and then adjust as needed. So if someone's like, well, is there like some list I'm supposed to go off of, and just it's like no, no, no, no, literally, think about a commodity that you want to go after and start to compile your list of companies that fit into that bucket, right. So if you're, let's say, you are farm raised and you want to do agricultural stuff, all right. So if you're, let's say, you are farm raised and you want to do agricultural stuff, all right. Well, you probably know the names of some companies that operate in that space, and some simple Googling and research online can help you find other companies, maybe competitors of theirs or suppliers or vendors of theirs. And now you've got your lead generation portion done. You know the companies right. And now how do you find the person to reach out to? Well, there's a variety of different job titles depending on the size of the company and whatnot.

Speaker 1: 2:16

But actual tools you can use to find these folks that are in the transportation department. You can use things like Zoom Info, apollo. You can use their website, you can use LinkedIn. But at the end of the day, if you can't find the right person, make a phone call to anybody at that company as a start and try to weave your way in the right direction. That's why I don't want to overgeneralize that.

Speaker 1: 2:37

But I also want to point out it's not overly complicated to get started with trying to talk to customers right, find companies and then find people at those companies. And if you start to realize that, hey, maybe I'm not so good at talking to folks in the ag space, or I'm not so good at talking to folks in the hazmat space or whatever. Wherever you started, then you can pivot. But the whole point here is I see people, they get the whole analysis, paralysis, and they just they never end up doing anything because they're so overwhelmed by it. So that's like my big take on it. What would you add in to that question? How do I find shippers?

Speaker 2: 3:12

and specifically that was my biggest problem when I started was trying to find the perfect lead type or source, and the advice that was given to me was the best advice I got was pick a direction and move in it and then change after two weeks If you feel like it doesn't seem like there's an opportunity. Right, pick a category and go 100 calls a day at whatever that category is for two weeks and then decide or think about whether or not it seems like there's an opportunity there or not, because the truth is like you're going to have to speak to quite a few people to see if there's an opportunity there or not, because the truth is like you're going to have to speak to quite a few people to see if there's a need. I would say what I learned over time is I look for things going on in an industry that would imply there is supply chain issues, and that's where I start, because it's more likely. So I mean, if you look at any list of the companies or industries being affected by tariffs, pick one, go to ChatGPT, ask for 100 companies that are in that space, start with that list and then just go into Google, start calling the companies. If you had the money or the resources. You can use something like Zoom Info, which is pretty expensive but makes that faster, but it's not necessary to your point. You could use Rocket Reach, which is cheaper, apolloio there are definitely some other ones that are a little cheaper. That will get you some names and phone numbers easier. But, like when I started in the industry, none of those things existed and the only way to find who to speak to was to do like an investigation or to follow a lead. You just called the company number.

Speaker 2: 4:44

Hey, I was hoping I could speak to somebody in shipping. Like, you just get really good at getting through a gatekeeper asking that question and the thing I always teach people is new is like dude, if you have a load and it is delivering to a place you've never delivered to and that driver's stuck, how hard is it to get to the shipping manager on the phone? You pick up that phone and go, hey, man, I need to speak to somebody in shipping. I got a driver at the dock Like, or you'll just say, hey, I need to speak to somebody at shipping with that urgency. I can't put you right through to that person, person, right. So you do it in one aspect of your job. But then you're trying to prospect and you end up overthinking it and making it seem so much like I need this guy's cell phone number, I need the decision maker. Before I pick up the phone. Just call the company. Like you can find that person.

Speaker 2: 5:24

And sometimes it's step-by-step like oh hey, talk to the gatekeeper. They said, hey, john's not in. Oh hey, real quick, john. I just want to make sure I have the right John. Which John is that? Oh, awesome, hey, out of curiosity, when is he typically available or when's the best time to reach him?

Speaker 2: 5:43

Most of them will just tell you that, oh, like, usually, wednesday afternoons are great. Thanks, sally, hang up. Great, I got one step closer. I now know the decision maker and when to call. Now I call Wednesday afternoon Like you don't need to go directly there in one phone call.

Speaker 2: 5:53

Like that's what we all used to do is like you just had to work your way through, find information, put your notes in your CRM and when you go back to it when it's like oh, I spoke to Sally, I need to speak to John, so-and-so, wednesday afternoon when Sally answers the second time it's oh hey, sally, is John around? Oh, yeah, he should be in. Oh, hey, great. Yeah, I know, chatted with you a few days ago and like I'll just start talking to Sally, build some rapport with her. Then she sends me to John Like you can still get there without like the most expensive data. Yeah, it's a little more work but it's totally doable and sometimes it's easier because you meet people along the way to that decision maker that can tell you a little bit about them. We would learn to ask things like hey, john, have any interest? Do you have any hobbies, any kids? If you get enough rapport with the gatekeepers, they'll tell you some of those things that you can use later, right?

Speaker 1: 6:39

Yeah, they might drop a nugget like oh he's out today on vacation with his family, Boom, he's out fishing.

Speaker 1: 6:45

Yeah, right, so whatever this is why they call it a sales pipeline or a funnel. Right, in both of those instances there's movement. Right, it goes down the funnel or through the pipeline from the beginning all the way through the other end, where that is a conversion to a customer. So it's not like just a flip of the switch from call to doing business. Good, good analysis there, all right. Next question how do I calculate fuel surcharge when quoting a customer? All right, so in an ideal situation you don't need to be calculating a whole lot here. Your customer will ideally give you a schedule of what their fuel surcharge is, based on the cost of diesel that week as published by the EPA. Let me break that down Barney style so it's not too confusing. What is a fuel surcharge to begin with? All right, if a customer this is very common in bids they will say I want you to give me your line haul rate. You know that you're quoting me for this three month bid or whatever it is and don't include fuel, because we know that fuel changes over time. Here's our schedule of what the additional maybe it's 50 cents a mile or whatever depends on the cost of fuel that week. But you'll tack that out.

Speaker 1: 7:58

Now. How do you calculate it? Well, when I go to actually bill that customer, the actual transaction comes up and fuel is whatever 356 a mile or a gallon this week. I look at the table and I see, oh, based on that, we're going to add X amount of cents per mile as a fuel surcharge. Multiply it by the mileage. Now you can tack that on to your invoice.

Speaker 1: 8:22

So in a in an ideal world, it's pre-calculated for you.

Speaker 1: 8:28

You just have to figure out what it is that week and invoice appropriately.

Speaker 1: 8:31

And in a not ideal world and I've had this happen too is like the customer maybe they're brand new to doing bids and they're trying to handle it all themselves and they're like yeah, we want you to project it out with fuel.

Speaker 1: 8:43

And you're like well, how do I know what fuel is supposed to cost? Right? And they want you to just bid line haul and we'll tack on fuel afterwards and like overall, you'll tend to have a weekly updated fuel surcharge rate per mile and you'll see a big list on a piece of paper. It'll say if fuel it's usually like every like four cents and change, the fuel surcharge might go up a penny or something like that, but they'll have this big list saying that, like there's no surcharge if fuel is at two dollars a gallon and in every four.04 or whatever it goes up from there, here's the new fuel surcharge per mile, again, mostly in bids, because you're projecting out business in the future when we don't know what the cost of fuel is going to be. What's your experience in that or anything else to add in there?

Speaker 2: 9:41

Yeah, just when you're doing a bid, ask the questions. Usually most companies work off. It's like I think it's the US Department of Energy puts out the fuel table.

Speaker 1: 9:50

Oh yeah, that's what it is. It's the DOE. I said EPA, it's DOE.

Speaker 2: 9:56

And here's the other thing this happened recently is I've kind of just used to gotten the habit that most shippers at least a larger company uses PC miler for mileage, right, oh yeah. But I caught one this week where I went back and their mileage didn't add up to PC miler. I use the multi-list and I use ratecast on DAT to see what the future is and then factor out fuel and I spreadsheet it all out and I looked and I'm like why are these rates so much lower? And I worked all the way back to their mileage and some of their mileage was off like 120 miles, 110 buck, 10 miles on lanes Like that's a big difference, right, like that's the margin in a lot of cases. And then I ran them through Google and I'm like they're using Google for their mileage, they're not using PCMiler.

Speaker 2: 10:46

So a good reminder is, if you are doing a bit, especially if you're using a platform like DAT or something to project rates and to work through a big spreadsheet once it gives it to you, whatever like that will give me PCMiler miles. I go all the way back and copy out all the mileages directly from the spreadsheet from my customer, replace PC miler with what my customer gave me and then I do the math on the spreadsheet to calculate it off their mileage, not off PC miler, because again, my guess is, knowing this customer, they probably did this on purpose to try to just get people to be a little cheaper. But it it for sure will catch up to you. So, like the details matter, yeah, that's.

Speaker 1: 11:30

that's really important, especially when you're giving a uh, a um, if it's a rate per mile versus a an, all in line haul.

Speaker 1: 11:37

Yeah, yeah, good point, all right Last question what is a blind load and what is the purpose of blind shipment? So it's called a blind shipment. I've never heard it called a blind load, but I guess it would be the same thing, right, what that means and I think we've, I think we've broken this down in the past, but you'll have a block of a standard blind shipment means that either the shipper or the receiver, depending on the situation with your customer, one of those two you know on the BOL, is replaced with the broker. It's usually like the. It's usually the shipper, right. So let's say, let's say, my customer is a producer of whatever widgets, right, and I have to pick up at their location and have it delivered to one of their customers, right. The blind shipment would say me as the shipper and the customer, the receiver, would be like the consignee, all right. The reason for that is my customer doesn't want their receiver their customer to know who their customer to know where it's coming from.

Speaker 1: 12:47

Because let's say, for example, they're a middle person and they are picking up at some supplier and sending it to their customer and they don't want their customer to know. Hey, I can just go direct, right? So another option would be the receiver could be blind. You know it could be, I've seen double blind. To where they're both they're both blind.

Speaker 1: 13:11

Right, we don't want either party to know who the who the other is, because we, because of how our business model works, works, we keep integrity with this shipper knows me, I know this person, but they don't know each other type thing. And then the purpose of it, again, like I said, is you want to prevent the back solicitation of that business? Not really you do. Your customer wants to prevent back solicitation. Now again, legally speaking, a BOL is a legal document. So you'll see two different sets of BOLs when you're dealing with a blind shipment, right, you'll see one that shows the actual shipper, right, they'll be listed on there. Then you'll see the one that the receiver gets that shows you that's on there. But the. Have you dealt with blind shipments at all? I haven't. It's probably been 10 years. I've done a lot of them.

Speaker 2: 14:13

In fact, the claim I was telling you about last week a lot of the tanker world are blind. There's lots of distributors and middlemen shipping commodities like glycerin, for example, like I had, one that had five parties involved before it got to the receiver, and like it's again. It's just like super simple, like whoever, if I'm selling a product to Nate and I'm buying it from Steven, I don't want Nate to know I bought it from Steven so that he can go directly to Steven, right and also right, like I don't want to hold all the product I'm selling. So it's also really common if, nate, you need the product very soon and I think it's faster and it's cheaper, instead of shipping it from Steven to me and me to you, I'm going to ship it from Steven to you.

Speaker 2: 15:01

I just don't want you to know it came directly from Steven, so you can go to Steven, right? So you're basically just shielding information so that your customer is protected from getting cut out as the middleman. And in produce it's pretty common. It's definitely common in tankers, like it's common in the international world a lot too, because, again, people selling product don't want them to know where it came from. Like, drop shipping is similar in some ways to that too.

Speaker 1: 15:27

Precisely so, like if you think about like produce brokers, an example, but a broker of any commodity, right, like they are think about the parties involved.

Speaker 1: 15:36

Let's say, okay, it's a widget, right? So there's a company that supplies or that manufactures the widgets. There's a widget broker who, when an order comes in, they've got a bunch of these different suppliers they can get it from. So you've got the actual manufacturer, then you've got the broker of that commodity, then you've got the freight broker who's going to arrange transportation, then you have the trucking company who's going to actually pick it up and then you have the receiver on the other end of it, right? So you've got five parties involved there and all the receiver cares about is do I get my widgets Right?

Speaker 1: 16:11

And all the receiver cares about is do I get my widgets? And all the manufacturer cares about is is someone buying my widgets? And that's what it comes down to. So in scenarios like that, that's where you will see blind shipments. And we did kind of allude to the concept of drop shipping, which is when it ships directly from its place of origin to where it's whoever's going to be receiving it. There's no distribution center involved or anything like that in the middle, so very, very common and effective method to use in those circumstances.

Speaker 3: 16:39

One of the things I just wanted to add, because this is something I deal with constantly in my niche, is so in the imported beef world, with a blind shipment, the paperwork that legally has to go with that product is called a COA. A certificate of authenticity that has to go with that product is called a coa. A certificate of authenticity that tells whoever's using that product like where this product was made, what kind of uh, hygiene or whatever stuff that they use. Um, and every once in a while you have to be careful, because that coa will have the shippers information on it as well.

Speaker 1: 17:11

So and maybe when they paid for it right. Ever see like I've seen big mix-ups with that, right?

Speaker 3: 17:17

yeah, so, uh, when you're doing blind shipments like, you need to get eyes on all the paperwork. Now most of the stuff, because of covid, has started to turn into digital. So, like, my customers will get like a digital copy of the coa and then they'll forward it on to the receiver, uh, but usually they'll still send that with the driver, and that's just something that you got to be aware of.

Speaker 1: 17:37

Yeah, I dealt with one I think it was a couple of months ago where it was imported from Mexico and the receiver like the driver screwed up and basically like the, the BOL that was signed. The paperwork that was signed by the receiver was the paperwork that showed like the purchase price from from like our customer, from, you know, from their supplier, and it was like they hopefully they didn't see that fifteen thousand dollar markup on their product there. But yeah, and I've seen it happen twice and you have to ask the question like what do I do? Happen twice. And then you have to ask the question like what do I do like? Do I go and tell my customer like oops, my driver screwed up, or do like do we wait and see if something happens? Do you play dumb like I? I've seen that a couple times and it gets like gets messy. So, yeah, you can lose a customer over that kind of stuff.

Speaker 1: 18:28

yeah, very quickly and they can lose a customer yep so but anyway, good questions, good discussion, keep sending them our way and we'll continue to answer them. Final thoughts Ben.

Speaker 2: 18:38

Do you believe you can or believe you can't? You're right.

Speaker 1: 18:42

And until next time go bills.