Inside the Shipper’s Mindset | Ep 48

Justin: 00:00:00

You're a shipper in the logistics industry and you're evaluating your transportation partners. How do you know who to pick and who to cut out? Today we're discussed how to make the right decision on your carrier partners.

Brian, you have nearly two decades of experience on the brokerage side. I think you worked at Macy's or tried to work at Macy's. You didn't make a cut for Chris's help about 20 years ago.

But let's put yourself in the shoes of a big shipper. How are you going about selecting who you're working with?

Brian: 00:00:37

Yeah, great question.

I think if I just got promoted to director of logistics and it's my responsibility to develop a carrier network, I would do a couple different things and I think it has to do with part of the country that you're in. I think it has to do with what kind of volume that you're shipping, what kind of product.

But I'm doing some sort of split where I'm putting half my eggs in this basket with asset based carriers and I'm putting half my eggs in a broker bas space where if I have last minute shipments or I need help with specific one off requests, they can always jump in at any moment. I think I want to try to develop the carrier network that helps define my business. So we'll just do, let's say Dallas, Texas.

I'm a fresh food manufacturer out of Dallas. All my shipments are being shipped out of Dallas. Some go to the east coast, some Midwest, some to different retailers out to the west Coast.

How am I doing that and how am I developing that piece of it? I think it's a couple different things, especially when some selecting some of those carriers.

So if I'm a shipper in Dallas, Texas, there's a couple things I'm looking at. I'm looking at the lanes that I have. Are we doing local, am I doing a lot of shipments within Dallas?

Well, I probably want to get a local Dallas asset based company to move all those short runs.

It doesn't make sense for me, especially from a cost perspective because I'm probably given a budget as the director of transportation from my CFO and I need to stay under that budget.

So if I have local Texas runs that I need to have these short hauls, I'm probably doing a local asset based company for the longer hauls to the east coast or areas that nobody wants to go to.

I'm probably outsourcing those to brokers for anything that these asset based companies that I have that are doing long Haul and they're going to specific parts of the country, I'm probably utilizing that. So I think breaking it up or if I were a shipper I would break it up into different regions.

Where if Dallas to California or Dallas to West coast, well that's probably going to be a couple asset based companies that are based out of California and using that as a backhaul.

Or if I'm moving from Dallas to the east coast, well, I'm probably using a couple asset based companies there and then also putting a couple other brokers on those lanes as well.

I don't think there's an exact science to it and I think at the end of the day those carriers need to execute because I think we can all draw up plays forever and ever. But if these carriers lack in reliability and communication and service, well, we need to go a different route.

What do you think about some of the stuff that I just said and the carrier network piece of it? Would you split it up 50, 50 or what are your thoughts?

Justin: 00:03:09

Yeah, I think there's a ton of factors and we've worked with numerous shippers across every type of industry and vertical within logistics. Big, small startups, Fortune 500, there's so many factors in there. It all is relative to their specific needs.

So yeah, I would be right in line with what you mentioned.

Leaning on assets for more consistency, outsourcing the outliers or the more inconsistent lanes to a broker where those longer hauls might not be a good fit for a local company. But again if you have you mentioned Dallas to like let's say Washington.

If I have a heavy asset based company that needs backhauls to Washington, I'm probably going to include them in my network. But it also depends on the market conditions. If it's extremely loose, there's a lot to choose from there.

We're gonna drive costs down, which a lot of shippers do, especially through RFPs. They want a contract at the bottom.

If it's a very tight market, you better be building an all star lineup of brokers and carriers who can give you that consistency even when capacity is really, really tight. So there's a lot of factors that come into play. The one thing that I would do is build that all star lineup.

Who are the carriers that I trust if I'm starting from scratch? I don't know anyone. I mean I'm running interviews, I'm getting references.

I always put out there from a burger side, I'm always putting out client references. Yeah, but if I'm the director of logistics A sales rep is going to tell you anything and everything that they think you want to hear.

They'll probably miss the mark. But there might be some things in there that you appreciate and will entertain. But I want to know, who else are you working with?

What do you specialize in?

Brian: 00:04:52

Right.

Justin: 00:04:52

What solutions and services do you, do you bring to the table? But I'm checking those references.

Brian: 00:04:56

Yeah.

Justin: 00:04:57

You know, is everything that you're saying, does that actually line up with, with what you guys do?

Brian: 00:05:01

Yeah.

Justin: 00:05:01

Or is it all fluff? Because that's the challenging part when from the shipper standpoint is deciphering who's worth a shit and who is not.

Brian: 00:05:09

Right.

Justin: 00:05:09

I think that's the most difficult challenge.

Brian: 00:05:11

Yeah. And I think like, you know, we got to think about it this way too. Especially as brokers or carriers, we have to put ourselves in our shippers shoes.

And maybe they just got promoted to director of transportation. Now their job is on the line.

They probably have two kids, a house, a mortgage, two cars that they need to provide for now that's their job and their responsibility to procure a carrier network that's going to perform.

And you just mentioned, okay, you have a Dallas to Washington or Dallas to put the Pacific Northwest and maybe that asset based carrier that's at a lower cost, maybe they're taking it for a certain price. Well, they keep underperforming in late deliveries, missed pickups, issues over the road. There's no communication.

Now it's like, okay, well I don't really care if they're at this price. I need to go a little bit higher. Look for a different broker or carrier to run that lane consistently.

So I think at the end of the day, if I'm a shipper, I'm looking for the reliability factor. I'm looking for selecting that right carrier that actually cares about the business.

Because you know, we mentioned it on a previous podcast, but our industry is messy.

Justin: 00:06:16

Yeah.

Brian: 00:06:17

And there's a lot of times I think you can see somebody's true colors when stuff happens or when, you know, shit hits the fan. Okay. How do they respond to that and how do they communicate and what are they doing to solve that problem?

To me, if I'm a shipper or if I'm a decision maker, those are the things that I want to know. And I think you nailed like checking the shipper references. Okay.

This sales reps calling me, he's been calling me for the past six months and it's my job to select the right type of carrier partner. How do I know this person's going to do what they say they're going to do.

I'm going to call that other shipping reference or customer testimonial to say, okay, well are these guys good? What's the status here? Because essentially my job's on the line. Right. And that's important to a lot of people for sure.

Justin: 00:07:02

I think that's one thing we always try to do is understand the shippers goals, your contacts goals. Is their goal to be on our budget or hit a bonus or get promoted or whatever it may be?

Because if you can help them look like a rock star and help them reach their goals, yeah, you're bringing value.

And I think that's the number one thing, even before like checking references and truly going through evaluation is can they bring actual value to our network Right when the market's soft? That's why there's so many, you know, sales reps just calling up and emailing every shipper out there is. Because there's not a food on the table.

Brian: 00:07:35

Sure.

Justin: 00:07:36

Well, we're starting to see things swing the other direction and that's the time I would start really cranking down to see, okay, which brokers or asset based companies out there can bring true value to our company. And if they can't bring value, there's no point in bringing them on board. It's a waste of time. So what are my actual needs?

What partners out there can bring value to help with those needs and then start having those conversations? Because at the end of the day, we talk about this often, but brokers for the most part do the exact same thing. Assets do the exact same thing.

You're not really changing the world and doing all these things, reinventing the wheel. We're not doing that tech or solution, that's just groundbreaking. It's does this person have experience? Can they bring value?

Does their company, are they financially stable if we have a claim, are they just vanishing and bailing or do they have the capital and resources to handle it if something does hit the fan there?

Brian: 00:08:35

No, I think we do have to think about it a lot of times.

Being in the shipper's shoes and understanding what they go through on a weekly basis with the amount of phone calls that they get and having to select those right carrier partners.

I think a lot of it too has to do with relationships and I think from the shipper side of it, okay, if I know a shipper or if I know another shipper and they use this carrier as well and they're doing similar type work, okay, I'M going to give them a shot. Right. As opposed to, you know, just a random cold call or some random outreach that another broker, another carrier did a while back.

What are some other things that would go into play? Like we talked about, reliability, service, financially stable.

What are some other things that would, like, pique your interest if you were in the shipper's shoes and you got a, you know, kind of a cold call, a random message from a broker on LinkedIn? Not that that happens. It doesn't.

Justin: 00:09:44

Yeah. No.

I think if they were professionally persistent and not obnoxious, if they're actually listening to what I'm saying, I may not engage at first, but if they're pretty persistent, I might engage with them a little bit and just give them a sneak peek of what's going on. Yeah. Doesn't make sense right now. We just went live with our RFP follow back up and closer to Q1.

Now, if they keep calling me every week and they're not listening to anything I say, well, they're pushed off, they're done.

Brian: 00:10:10

Right.

I had a shipper, I've asked, you know, I've asked the question all the time, like, what's kind of the worst excuse or what's the worst phone call you ever had? And this is like a fresh produce or fresh perishable shipper in California. And he's like, oh, my God.

I had a call a couple months ago and the guy asked me what kind of equipment we use and is that flatbed, is that van, is that reefer? And he just hung up the phone and he's just like, listen, man, do your research, figure it out. We move fresh produce that has to be refrigerated.

So that is something that, you know, we want to make sure that on the brokerage side, so flip it around. And us as brokers and carrier partners, doing your research and making sure that that person sounds knowledgeable and is knowledgeable.

Justin: 00:10:55

Correct. And I think what you just said is like, is their approach targeted? Are they calling? We've heard it, like, from.

I've been in sales for a while, you know, remove me from your list early on. I might be called off the list, but I don't call off a list. I'm very targeted in who I'm calling.

And I'm calling them because I'm confident I can bring value to their, you know, their team. So are they targeted? Are they calling me for a reason or are they just going through the motions and checking in?

Brian: 00:11:19

Right.

Justin: 00:11:19

I think if I got the check in or follow up phone call and email every single week when I already told them, hey, this is when we would be open. I think that I would go ahead and push them off because it's just lack of, of professionalism and experience there.

Brian: 00:11:32

Sure.

Justin: 00:11:33

But also I would give the ones a shot that I have built that rapport with and have some type of trust established. I think that trust would build as long as they can continue executing on opportunities. So I would definitely try to build a powerhouse.

I would definitely have a lot of accountability for my partners in terms of.

Brian: 00:11:52

Like a scorecard or something or what's.

Justin: 00:11:54

Absolutely. So a lot of bigger clients that we work with have scorecards. They stack, rank their partners. I would lean on that.

At the end of the day, there's a number of factors that larger shippers look for. On time delivery, on time pickup, tender, acceptance, claim percentage. There's a lot of. They're called KPIs or key performance indicators.

That's how larger shippers grade their carrier partners. If you can't meet these expectations. And here they are 95 here, 98 here. Zero or 0.5 claims.

Brian: 00:12:25

Yeah, yeah, yeah.

Justin: 00:12:25

Ideally zero. But if you cannot meet these expectations, then you're going to be kicked out or you're going to be put on the bench.

So those are the things I would definitely put into action. Is that accountability? Because I've heard this numerous times and it clicked because no matter the size, every shipper wants to be the top priority.

Brian: 00:12:46

Sure.

Justin: 00:12:47

So is this carrier or is this broker going to make me a priority?

Brian: 00:12:52

Right.

Justin: 00:12:52

Those are the people I want to work with because at the end of the day I would take care of them, but I want them making us a priority and taking care of us at the end of the day.

Brian: 00:13:00

Yeah, I got, I've heard it a couple of times.

I forget who the customer is, the prospect, but I've been prospecting over the past several years and one of the things that that shipping manager said when I prospected them is they said, listen, I want to have six carrier partners and I want those six carrier partners. I want to be their number one client in their organ because they actually give a shit about what we're doing.

And I'm like, oh my God, that's a great strategy. I've never heard that before. And I'm like, okay, I might have to wait another six months to call back. Right.

But I think from a shipper's perspective, there's all different variables and all different things that can happen. I would say also, let's talk about the flip side. On the brokerage side, you never know what's going to happen or the timing of a call, right?

We mentioned this a couple of times during this show today, but Dallas to the Pacific Northwest, you get a carrier that's underperforming.

Well, if you call the following week and you say, hey listen, I service Dallas of the Pacific Northwest, it's like, oh, I actually have a need for that because my carrier right now is shitty and I'm entertaining. Let's set up a virtual call.

So giving hope to those brokers out there and those asset based companies don't just call to call, but call to bring real value just like you're talking about.

Justin: 00:14:18

So plan is to have maybe some shippers on in the future to give, you know, real feedback on what they look for. I know there's a handful of podcasts out there and you can find shippers, you know, giving their perspective, but love to have some shippers on.

If you are listening to this and you're in the shoes of a shipper making those types of decisions, we'd love to hear your feedback. Feel free to post it in the comments or shoot us a dm. We'd love to hear back from you directly.