5 Ways For Freight Brokers To Deal With Rejection

As you build your freight broker business, you’re going to witness rejection. It’s inevitable. However, as great a freight broker or freight agent as you might be, not everybody wants to deal with you! This is a perfect reason to always be building your contact list.

The rejections freight brokers experience might not be the harsh rejections a door-to-door salesperson may have to endure. However, when people don’t answer your calls, don’t reply to your emails, or tell you not to contact them again, you’re witnessing rejection. This can affect your confidence and your desire to make more calls and contacts.

Perhaps, the biggest indicator of your future success as a freight broker is your ability to tolerate failure and rejection. When you allow rejection to upset you, it won’t be long before you give up on this profession and on your goals. On the other hand, when you learn to tolerate rejection and reach the point where it doesn’t affect you, you become unstoppable. Can you learn to deal with rejection? The answer is absolutely YES!

Here Are 5 Ways For Freight Brokers To Deal With Rejection:

 

  1.  Have a vision and don’t lose sight: As a freight broker, you have a large, compelling and motivating vision for your life, and goals you desire to achieve. It puts rejection into perspective. Remember, that one rejection is just a small blip on a freight broker’s overall journey to achieving their goals. They must take the focus off how challenging the rejection may appear and keep their focus on their vision.
  2.  Focus on the positive: When a freight broker (or anyone) focuses on their challenges, what are they going to get? More challenges! Think about it. Has focusing on your challenges EVER got you what you desired? However, when you focus on SOLUTIONS, what will you get? Solutions and Success in the freight broker business. Successful people are ruthlessly solution orientated. When freight brokers experience rejection, they must pick up the pieces, dust themselves off, focus on their vision and solutions and get back to work with a smile.
  3. What are the lessons you can learn? Rejection is a great teacher. Each rejection and challenge has within it a valuable lesson. Napoleon Hill, author of Think and Grow Rich says it best: Every adversity, every failure, every heartache, carries with it the seed of equal or greater opportunity.
  4. Nothing happens before it’s time:  Accept that it wasn’t right for you at that moment. There’s another saying: Whatever you resist persists. When you accept the rejection and don’t fight reality, the emotion disappears. For example, when it rains, you can resist it by saying: I’m so mad it’s raining. Can’t this rain stop? I’m going to get wet walking to work, which will make my clothes wet, which will make me look unprofessional for the meeting…blah…blah…blah. See how silly this is? By not resisting it, all you would say is: It’s just a little rain. When it rains, you just accept that it’s raining and get on with your day. With practice, you can become as emotionless about rejection as you are about rain.
  5.  Don’ttake it personally: Finally, and most importantly, don’t take rejection personally. You can’t take it personally because rejection isn’t about you! Rejection is not a measure of YOUR self-worth. When someone rejects you, they’re acting out of their own insecurities, doubts and fears. Maybe they’re busy. Maybe they have a lot of stress because their rent is late and the landlord is pressuring them. Maybe it’s raining outside and they just can’t stand the rain! The reality is, rejection has more to do with them, than you. Once any freight broker or freight agent gets their head around this, they’ll have no trouble picking up the phone and making those calls!

Where Is Your Motivation?

For every freight broker and freight agent, achieving your goal in this industry is going to take time.  One day of hard, focused effort isn’t going to be enough.  To get what you desire, you have to put in hard, focused work every single day, day after day, for a long and extended period of time – even months and years.

Like billionaire Warren Buffet says:

“It doesn’t matter how hard you try, it takes nine months to have a baby.”

Every day, you have to wake up and take the steps necessary to get what you desire.  To do this, you’ll have to tap into your motivation.  To have a successful freight broker agent business, it takes a tremendous amount of motivation to get out there every day and make calls, build relationships, and face objections when you ask for the order.  Motivation, however, is a skill you can learn.

Are you a Freight Broker willing to pay the price?

There was once a businessman who made a fortune in the cleaning industry.  On an interview for a TV show, he was once asked “What is the secret of success?”

His reply was:

To become successful, you have to first know what you want, and then determine the price you are willing to pay to achieve it.  If you pay the price, you will achieve your goal.”

Whether your desire is to become a millionaire, or just make a little extra money so you can go on vacation or pay your rent on time, there will be a price you’ll have to pay to accomplish this.

You’ll have to work hard and make sacrifices to keep learning and growing and changing.  Your goal will cost you time, effort and energy!

The question is:

“Are YOU a Freight Broker or Freight Agent willing to pay the price?”

No one else will do this for you.  It’s all on your shoulders and the success of your freight broker business depends on it.

If you’re willing to pay the price, you can accomplish anything you desire.  Most people are not willing to pay the price.  It’s too difficult.  It’s too intimidating and they don’t desire it bad enough.

Even if you aren’t very motivated right now, you can unlock your hunger when you follow these 3 Essentials of Business Success:

  1. Goals

All success in this industry and in life begins with a goal.  Set some compelling goals that light a fire under your belly and get them down on paper.  If you don’t have a written list of your goals, then all you have are just dreams.

  1. Systems

You must follow a proven system if you want to be successful in the logistics industry.  If you don’t take the actions that successful freight brokers take, then you can’t get the results that successful freight brokers get.  Your roadmap to selling more freight includes making 3 new contacts a day and following up with your list weekly via email and phone.

  1. Motivation

Last but most importantly is Motivation.  Motivation is the glue that holds everything together.  It’s your WHY.  As Nietzsche said, “A man with a strong enough WHY can endure any HOW!”.

In other words, it’s motivation that gives you the discipline to review your goals and it’s motivation that allows you to stick to the system.

As a Freight Broker or Freight Agent, if you follow these three steps – and pay the required price – then you can live out your dreams and create an amazing life for yourself and your family!

Best Practices for Renewing Your Freight Broker Bond

If you’re active in the freight broker business, you’ve probably had to renew your freight broker bond these last few summers in order to stay compliant with the Federal Motor Carrier Safety Administration’s (FMCSA) requirement for broker licensing.

Surety bond renewal is an important administrative step that freight broker agents need to take care of, usually on an annual basis. It guarantees that your business meets the legal requirements at all times so your license remains active. Without proper licensing, you risk having your freight broker license revoked and losing your credibility with shippers and carriers.

To make sure this year’s renewal process goes smoothly, here are three best practices that help freight broker agents stay compliant and pay less for their bonding.

Start your freight broker bond renewal on time

Having to stop brokering because you’ve missed the renewal deadline would be a real pain. That’s why it’s a good idea to make sure you stay on top of administrative requirements – and stay in business, unhampered by legal problems.

If you were already brokering two years ago, you went through the FMCSA broker bond increase in October 2013. The BMC-84 freight broker bond was increased from $10,000 to $75,000, a significant raise that changed a lot in the industry. Back then, all freight broker businesses had to either get a new bond with the higher amount or upgrade their bond limits.

As a result, a large percentage of freight agents have to renew their bonds around autumn of each year. If you’re one of them, starting the process in summer is the best approach. With thousands of freight brokers undergoing the renewal process around the same time, delays in renewal are likely, which can jeopardize your license and compliance.

Keep in mind also that even if your deadline seems far away, the bond payment has to be processed a month before the actual expiration of the bond. The FMCSA requires surety companies to send written notices for bond cancellations 30 days in advance. This means that if you haven’t taken steps to renew the bond by then, you might end up with an expired bond. Usually you’ll get a renewal invoice from your surety 60 to 90 days before the expiration, so you have enough time to react and avoid the unpleasant consequences of losing the right to broker.

Fix your financials to get a lower bond cost

Who wouldn’t like to pay less for the freight broker bond renewal? It is definitely possible to reduce your bond cost over the years, and there are a few useful practices in this respect that can save you a lot.

It all starts with understanding how your bond premium is formed. When you apply for a bond, the surety needs to assess the risk associated with providing backing for your business. The more solid your brokerage is, the less you will pay for the bond because you will not be considered a problematic applicant.

That’s why, if you have the chance, it’s a wise step to take care of your financial stats before the renewal. Clearing up old negative items from your credit history, such as liens and judgments, will definitely help to improve the image of your brokerage in front of sureties.

Boosting your credit score is probably the most powerful way to reduce the bond cost. And of course, make sure to showcase the strength of your business in terms of management and finances in general and to stress on the improvements you’ve made.

Look for the best bonding rates – with care

The price you will pay for your freight broker bond renewal is formed on the basis of your credit score and overall finances, but it also depends on the surety agency you will choose to work with. So what are some good practices in this respect?

First of all, if you’re tempted to file bond applications with ten agencies to get a comparison on the prices, think twice. Usually when you apply for a bond, the surety makes an inquiry on your credit. Due to credit card company policies, if you suddenly get multiple inquiries, your personal credit might be penalized permanently and without notice.

Instead of going through all the effort of multiple applications and putting your credit at risk, it’s wiser to avoid shopping around too much, but to focus on making good research of the surety agencies on the market.

The most important tip is to choose a surety provider with years of experience in the field and with a solid reputation. It’s crucial that the agency works only with A-rated and T-listed surety companies because this guarantees the solid backing of your freight broker bond.

Plus, a trustable surety agency would work with numerous bond underwriters, which would mean it has access to the best bonding markets.  Thus, it can shop around for you and find the right bonding rate for your specific case.

With a few handy tips in mind, this year’s freight broker bond renewal should run more smoothly for your business. Best of luck on your renewal journey!

A special thanks to guest blogger, Todd Bryant, president and founder of Bryant Surety Bonds. He is a surety bonds expert with years of experience in helping freight brokers and forwarders get bonded and start their business.

Want to work under LDI’s surety bond? Apply for our authorized freight agent program now!

Apply to be an LDi freight broker agent today!

Recipe For Success To Move More Freight

Just as there are recipes for success, there are recipes for failure.  As a freight broker agent, you’ve done your homework and you’ve tested things during the course of your business that have helped you determine what works and what does not.  For a freight broker agent, a typical day almost always involves having several balls in the air at once.  And when things get busy or you get caught up in the day-to-day minutia of things, it’s all too easy to slip into low gear or take your eye off the prize.  For instance, how many of you have lost sight of obtaining new contacts, emails or phone numbers?  How many of you stopped building your contact list?  Or only send emails rather than use the phone, if you DO make any contacts?  Do you believe that your customers will stay loyal and always work with you?  Do you only service the current customers that you have?  Or maybe you’ve decided to coast and rest on the current flow of business that you have.  These behaviors sound pretty harmless and might even be acceptable to you.  But know this:  If you continue on this path for your business, you are most definitely creating a Recipe for Failure.

The billionaire Charlie Munger has a strategy to discover how to be successful called “Inversion”.  Basically, this strategy means that in order to figure out how to BE successful, you must first ask what it would take to be UNsuccessful.  Freight broker agents  can apply this principle to moving freight as well.  So, according to Munger’s strategy, the following actionables would be a Freight Broker’s Recipe for Success:

  • Obtain three new email contacts and three new phone numbers every day.
  • Call 10 prospects every day.
  • Add to your contact list every day.
  • Use the telephone as much as possible rather than just sending emails.
  • Be aware that your customers will eventually leave at some point, so prepare by adding to and diversifying your contact list.

Remember, this is a minimum.  Following this Recipe for Success isn’t just for when you’re not doing as well or not moving as much freight as you would like.  A successful freight broker would continue following this Recipe for Success even when they don’t have to.  So when the down cycle comes, for example in December which is typically a slow month in the freight sales industry, you’ll be so well prepared with your large and prosperous contact list that you won’t feel any strain.  It’s just like Sun Tzu said, “Plan for what is difficult while it is easy, do what is great while it is small”.

Ten calls a day and 3 new contacts a day is a minimum. Want to get ahead FASTER, then:

  1. Make more calls.
  2. Contact more new prospects.
  3. Diversify your contact list.

When you’re in a down cycle, it’s just as important to keep following this recipe.  During these times, diversify your contact list.  Just as you wouldn’t invest all your money in the stock market in just one stock or bond, don’t put all your hopes of moving freight on just a few prospects.

Getting three new contacts a day is increasing the investment you have in this industry.  When you do this, the result is simple: you make more sales and achieve your goals faster, building an ongoing successful freight agent business.

15 Must-Know Questions Freight Brokers Ask To Move More Freight

The life of a freight broker agent can be very rewarding but not without some challenges.  Calling to find freight is definitely one of those challenges of the business.  Freight agents need to find freight – so you need to make the calls.  Every freight broker knows this.  To add to this…you may be a freight broker agent, but you aren’t really a salesperson.  Your real job is to solve your customer’s freight and shipping challenges.
In order to solve challenges for our customers, we must first figure out:

  1. What are the customers challenges?
  2. What frustrates them?
  3. What do they wish other freight brokers would do that they don’t?
  4. What causes the customer stress?

The answers to these questions can’t be discovered when we do 90% of the talking.  Instead, we MUST ask great questions, and then close our mouths and write down the answers we’re given.  Once we know what their challenges are, and we know that we can assist them to solve these challenges; we can start talking about us.

What Questions Freight Brokers Must Ask The Shipping Decision-Makers To Build A Relationship With Them:

  1.  Tell Me About Your Business?

First off, you should have already googled the company you’re calling.  Ask this question to break the ice.  Good companies love to talk about what they’re doing.  Join in the conversation from the information you already have with them.

  1.  What Are Your Main Responsibilities?

The answer you want to hear is “I’m the Shipping Manager/ Shipping Decision Maker/ in charge of freight here”.  If they’re director of purchasing, simply ask for the name of the shipping manager.  After asking for the shipping manager’s name, ask if you can speak to them.  Once you get to the shipping decision maker, listen carefully to their responsibilities.

  1.  Who Else, Besides You, Makes Your Shipping Decisions?

Your goal is to talk to the person with the power.  Everybody else has problems you can potentially solve, but the person who makes the shipping decisions is the only one who has the authority to let you assist him/her.

  1.  What’s Your Biggest Challenge Shipping Your _______________?

Ask for the biggest challenge shipping their products.  Ensure you write down the answer to this question.

  1.  What Happens When ________________________________ Happens?

This is for locating their challenges beforehand, so you can solve them when they happen.

  1.  What Are Your Main Priorities While Moving Your Freight?

(IE. Price, transit time etc.) Another question you must write down the answer to.

  1.  What Qualities Do You Look For In A Great Transportation Partner?

Your goal is to be excellent in this profession.  Excellent results only come to excellent people with excellent work ethics.  When you know what’s important to them, you’ll ensure them that you’ll fulfil their requirements.

  1.  What Do You Like Most About Your Current Freight Broker?

This question shows that you have class and that you don’t speak poorly of your competition.

  1.  What Would You Change About Your Current Freight Broker?

If they say “I wish they would get their rates to me faster”, then you ensure them that you’ll get your rates to them fast!  With all of the information your prospects give you, write everything down.  By taking action and giving them what their current agent doesn’t, you’ll stand out and be seen as both better and different than their current agent.

  1.  Do You Keep Your Options Open For Transportation Partners?

This is one of the main questions you MUST ask.  This question qualifies your prospect.

  1.  What’s Your Criteria for Bringing in a New Freight Broker?

Some may have criteria, some don’t.  Overall, their criteria is for you to solve their challenges.  When you go to them with your solutions, you break their autopilot and comfort zone and they won’t be able to help but listen to you.

  1.  How Do You Measure Success With Current Freight Brokers?

The main way is that their freight broker gets their freight picked up, transported and delivered on time.  But always see if you can go deeper for other answers and insights.

  1.  How Would I Win Your “Freight Broker Of The Year” Award?

They might be reluctant to answer or tell you they don’t have an award like this.  Use the phrase “But if you did have an award, how would I win it” to give them permission to open up and tell you what is most important to them.

  1.  What Lanes Are You Shipping Right Now?

Remember, success on the telephone goes to the person with the best notes.

  1.  What’s Your Email Address So I Can Send You My Information?

You MUST ask this question every time.  We’ve already shown we’re interested in them and gotten to know their requirements.  Don’t forget this final step where you capitalize on all the work you’ve already done.

There are countless other questions a freight broker agents could ask a customer/prospect.  The above questions are a great starting point to engage them and find the answers that will not only serve to develop a relationship but help you be THE freight broker agent they choose to solve their freight and shipping challenges.  Now, it’s up to you to ensure they’ve made the right choice and turn them from a good prospect into a great customer!

10 Ways Freight Brokers Can Generate Leads

Lead generation is a difficult and time-consuming task but the success of your business hinges on identifying new prospects and attracting them to what you have to offer.  The ultimate goal for your freight broker business (or any business) is to generate more leads to convert into customers so your business will grow.  The suggestions below are designed to help freight brokers fill their sales lead pipeline.  The more leads you have in your pipeline, the more prospects can be converted to customers which means more money for you and your freight broker business to grow and prosper.

Here are 10 places freight broker agents can generate leads to grow their business:

1. Start with people that you know – your current contacts:  Ask friends and family where they work.  Not every company requires shipping, but many do.  A freight agent’s current contacts are a great source for leads, and once you get a lead inside an industry you can prospect other companies in the same industry.

2. Keep a notebook in your car/truck:  You can write down names of companies you see on the road.  Write down the company, any nearby landmarks, and any other information you can use to establish rapport during your conversation.

3. Referrals:  As you get more customers and build a reputation, they will refer other customers to you.  Companies that you’ve picked up from and shipped to are another good source, but wait until after the shipping is complete to contact them so you have success under your belt.

4. Companies in the same industry or companies you work with:  When freight brokers tell companies they specialize in produce or lumber, they will establish expertise in the client’s eyes.  Check shipping labels on produce or food for information on how they are shipped.

5. Check customers’ credit reference sheets for new leads:  Mention that you were referred to them by the customer.

6. Go to Thomasnet.com:  Start calling the customers on their list.  There are 10’s of thousands of them.  If you’re not comfortable with this, pick an industry you are familiar with and start there.

7. Look at where current loads are picked up or dropped off:  Call these places.  Usually they will tell you they do not have any loads that need to be moved, but if you are persistent, you will find they have loads that need to be moved.

8. Research the destination of your current loads:  Companies in these cities will have loads to be moved, and know that they will get a better rate if you are already shipping to their city.

9. USDA produces a valuable resource at MarketNews.usda.gov:  This can be a great resource for freight brokers and the prices and freight information are updated every Wednesday.

10. Go to ProduceMarketGuide.com:  This has regularly updated information on produce.  CareersInFood.com also has resources about food manufacturing.  Manta.com gives in-depth information about companies, including email contacts.

These are just a few ways that freight agents can find new prospects but the ultimate success of your business depends on your actions.  To be a successful freight broker agent, you must continue to put in the hard work of introducing yourself, your freight broker business and your services to new prospects regularly then continue that momentum by building relationships, stimulating referrals and finding additional opportunities when possible.  Your reward will be a thriving pipeline that will skyrocket your business at high-times and help to carry you through slower times.  Just like solidifying any good habit…lead generation cannot be a one-time activity but rather a way of life.

3 Techniques for Freight Broker & Freight Agent Goal Setting

Don’t have a “goal”, have a PLAN!  Most of us have goals–whether personal or professional.  But just having a goal won’t make it happen.  What makes youachieve your goal…is planning.  How many times have you told yourself you’d change something but it never really stuck?  How many times have you promised yourself you’d make a point to do (or not do) something?  As a freight broker, I’m sure you’ve thought about maybe expanding your office, reactivating old customers, shipping some LTL instead of all FTL, learning a new language, etc.  Only to watch days, even months slip by and you’ve had zero progress in the areas you wanted to make changes. It happens to all of us.  But, it doesn’t mean you weren’t serious about your goals or that they became unimportant – most of the time it’s because of poor planning.  It’s because we didn’t really fully define the goal, set objectives or put actions into place to help us achieve the necessary results by a certain time…because there was no PLAN!

Different things work for different people.  To achieve…actually ACHIEVE a goal you need to have a plan in place.  It’s the plan that breaks down the goal into workable parts and it’s those parts (when applied or tracked) that help you define your goal(s), gives you a list of actionables and makes you set a timeframe.  Here are some basic guidelines to help you create a PLAN to achieve your GOAL:

1. SET A GOAL:  I know you just rolled your eyes and this may seem a bit obvious but without a clearly defined goal it’s easy to lose sight of whether what you want to achieve is along-term vision or for short-term motivation.  If you’re not putting serious thought or consideration into your goal, chances are you won’t be successful achieving results.  When setting a goal, try using the What, Why and How Approach.  The “What” stands for what you’re looking to achieve in your business or personal life.  Defining a goal makes it tangible and therefore more likely to be achieved.  Second, the “Why” is the reason you want to attain the goal you set.  Let’s face it; we all get caught up in the day-to-day minutia of things.  So, to stay on track and keep our goals in sight, we need to regularly remember why we are doing the task and the meaning behind it.  And last, the “How”.  These are the new skills we need to practice, the classes we need to take, the new habits or the breaking of old ones that will get us to where we need to be.

2. SET SMALLER GOALS:  Once you’ve firmly defined your goal (personal or professional, long or short term), you need to set smaller goals.  For a professional goal, this might involve crafting a company mission statement.  For a personal goal this might involve making a daily “To-Do” list.  If you’re committing to a long-term goal like a 5-year plan, try breaking that down into yearly plans and then maybe into a 6-month or even monthly plan.  Just be sure to review your plan regularly to make sure you’re keeping on course and in-line with your overall goal and adjust as needed.

3. STAY ON COURSE:  Your success in achieving your goal lies mostly in this area.  Like the saying goes, “You have to have skin in the game”.  The “skin” of it lies in your efforts of day-to-day reviewing and managing of your progress and doing so will help you stick to your plan.  Although it can seem daunting or tedious, tracking these individual steps are a definite necessity.  To make this part of the process easier, you can use a journal or diary to record your progress.  Even if you’re always on the go, yep…there’s an App for that!  There are countless apps out there for you to use to keep you on track, whether it’s losing weight, getting more active, setting reminders and even digital diaries!  Another way to stay on track is to schedule time for yourself like you would for a meeting.  Use that time to track your progress, review notes, and make necessary adjustments as needed.  It’s very important to view your progress so you can see how far you’ve come and reward yourself as you hit certain milestones that will help keep you motivated.

One final note…If you prefer to track your progress digitally over the traditional pen-to-paper method, there are numerous apps out there that you can use to help you achieve what matters to you most.  Here are some of the more popular apps for you to check out and download so you can log your progress while on the go – NO EXCUSES:

MyFitnessPal – A free calorie-counting food journal that integrates with fitness tracking devices that allows you to connect with others for accountability and motivation.

Wunderlist – A to-do app favored by entrepreneurs for its beautiful, minimalist design; great for long-term or short-term to-do lists that you can access from all your devices and share with others.

Evernote – A note-taking app with multiple uses, one of which allows you to keep track of goals by organizing a notebook with different goals and ideas.

Habitica – A habit building app that gamifies the process. A little avatar gains strength and points as you hit your set goals for the day. Take your avatar on quests, join battles, and enjoy some lite video gaming while achieving your goals.

Nozbe – A paid, task management app where you set up a project and then the goals, habits and daily tasks to reach your goal; available on nearly every platform.

HabitBull – A multiplatform companion to help build routines and keep track of your day to day habits. It displays graphs and charts of your progress and offers different ways to organize and set up your new habit building or habit breaking goals.

Some Tips on Goal Setting:

–       Set Priorities: Rate your tasks (A-most important, B-moderately important and so on).  This helps you to better focus on your priorities and directs your attention (and time) to the more important ones and also keeps you from feeling overwhelmed by having too many goals.

–       Write Goals Down: Whether you write your goals down on paper or on a digital device, it tends to make them more “concrete” and therefore makes them become more forceful and have more weight than just a thought.  Because it’s in print – you HAVE to act on it!

–       Be Realistic: Make sure to set achievable goals.  Setting yourself up for failure from the onset is a definite motivation killer and will most likely hinder you from setting any future goals.  Strive to reach things that are attainable as these will help to build your confidence and continue you on a path of improvement and continued successes.

–       Reward Yourself: You don’t have to wait until your goal is reached to celebrate.  Reward yourself along the way with mini victories as you reach mini milestones in your progress.  This will help keep you motivated, committed to succeeding and continually moving towards your ultimate goal.  Good Luck!…err..I mean, Good Planning!

Red Flags that Alert Freight Brokers of Transportation Fraud

Ahh March…that time of year when winter finally loosens its bone-chilling grip and thoughts turn to those of spring, warmer temps and…fraud??  Yes, March is Fraud Prevention Month.  And as the thermometer gauge rises so do your chances increase for becoming a victim of fraud.  With that being said, this blog post is designed to share some facts and red flags that can help alert freight brokers or anyone else involved in the transportation or logistics industry of transportation fraud and hopefully keeps you from becoming a victim.

The truth is, no matter what industry you are in, chances are you either know someone or have personally been a victim of fraud.  Because when money’s involved, there is always a scam artist out there eager to separate you from your hard-earned cash.  And it’s no surprise that the transportation industry seems to be a favorite for thieves and scam artists.

In fact, the 2014 Global Economic Crime Survey reports that 39% of survey respondents reported transportation and logistics fraud specifically – far more than the 29% across all industries.  That number is most likely higher because many owners may be fearful to report fraud due to the impact it can have on a company’s reputation, employee morale, and relationships with its business partners.

The good news we don’t have to fall victim to fraud or theft.  Since awareness is the first step in prevention, let’s take a look at two of the most common types of fraud in our industry:

  1. Cargo Theft is probably the most straightforward example of fraud. It’s a multi-billion dollar enterprise that tends to take place during truck and/or container transportation, usually when vehicles are being loaded or unloaded.  Inbound Logistics reports that, “In the United States, the most highly sought after shipments are pharmaceuticals, consumer electronics, apparel, and food.  Any product can be stolen, of course, but these commodities are reported stolen most consistently”.

CargoNet recently released its Q3 2014 United States Theft Report and their top five findings were:

  1. There were 214 reported incidents of cargo theft this quarter, down 22% from Q3 2013 and up 28%from Q2 2014.
  2. The most costly theft was a $15 million burglary of processors.
  3. Washington State experienced a cargo theft crime wave this quarter, going from 0 reported cargo theft incidents in Q3 2013 to 7 in Q3 2014.
  4. Cargo theft decreased 52% on Friday.
  5. Truck stops were the most common theft location of Q3 2014.
  1. Fuel Advance Fraud is also known as a “double brokering scam.”  Logistics industry officials say it’s a rampant crime that’s hard to prosecute.  This type of fraud takes place when a criminal passes himself off as a carrier and accepts freight from an unsuspecting freight broker or freight agent.  He then turns around and brokers the freight to an actual carrier, in many cases for a higher price than the original customer agreed to pay!  He is able to do this because he has obtained documents from actual carriers and brokers and has altered them to convince his victims that he is part of a legitimate company.  Once the load is picked up, the scammer gets the BOL from the actual carrier and then faxes it to the original broker, requesting a fuel advance on the load.  He receives the money and then disappears with the money, never paying the actual carrier.  The money he makes from this sort of con typically range from $500 up to $2,000.  But it quickly adds up when he repeats the con again and again, each time using another name, a new phone number, and more phony paperwork.

What are the red flags of a possible scam? Rates that seem too high or too low – A scammer posing as a carrier may accept a load for less than the going rate in an effort to entice the freight broker or agent into doing the deal.  On the other hand the same scammer may offer a carrier more money than what the broker agreed to pay them, in order to motivate the carrier to take the deal and not ask too many questions.  Bottom line, if the rate “seems to be too good to be true,” it probably is so ask more questions and be sure who you are doing business with.

Schemed timing – Fuel advance scams occur more often later in the week and at the end of the day. Why? Because scammers know that freight brokers and carriers will many times become careless when they are faced with the possibility of not being able to cover a load with the day or week drawing near.  Scammers also like to make believe their driver has no money and will not be delivered on time unless they get a fuel advance.  Any time anyone you are dealing with is in too much of a rush, slow down, look in the mirror and make sure the word “sucker” or “victim” is not written across your forehead.

Unrecognized phone numbers – Scammers posing as a representative of a legitimate company will provide supposedly valid paperwork, counting on the fact that many will fail to check the telephone numbers to verify the person’s identity.  While having a different phone number from a company’s main office doesn’t always mean a broker or carrier is a scam artist, it still should be considered a red flag and a reminder to perform additional due diligence before moving forward.

Before issuing a fuel advance, take these precautionary steps…

  • Check the FMCSA’s Safety and Fitness Electronic Records (SAFER) system website and make sure the DOT/MC number match with what the carrier has submitted.
  • Verify the phone number the carrier provides matches what is listed in his DOT registration.  You should also verify the carrier’s address and fax number matches, if it does not, make sure to address it with the carrier.
  • TIA members should always check the TIA WatchDog site to see if there have been any complaints about the carrier.

This may seem like a lot of work but consider how much is at stake financially.  Not only is the fuel advance amount on the line, your reputation with the shipper is as well and any future earnings.

Like it or not, this is the world we live in!  The fact is, if you are in any business long enough someone will likely try to scam you.  Below are some tips for freight brokers and freight agents on how to avoid being scammed.

  • If something seems too good to be true, it probably is!
  • Listen to your gut.  If something seems shady, proceed with caution.
  • Whenever someone you’re dealing with is in a rush and money is involved…just slow down.

Freight Broker Deductions & Tax Tips

After settling down after the busy holiday season, another season is already here – tax season!  Before you know it, April 15th will be upon us but the good news is there are certain business expense write-offs that can reduce the final amount due on your taxes as most freight agents and brokers are considered independent contractors.  Keep in mind that while these deductions can be subtracted from both your regular income tax and your self-employment tax, you first need to determine which expenses are necessary business expenses and exactly how much can be deducted.  Seeking a tax accountant for assistance is definitely wise and recommended.

If an expense is considered ordinary or necessary for your business, it is fully deductible. These expenses may include:

  • Accounting fees
  • Advertising
  • Bank charges
  • Commissions and sales expenses
  • Continuing professional education
  • Contract labor
  • Credit and collection fees
  • Delivery charges
  • Dues and subscriptions
  • Employee benefit programs
  • Insurance
  • Interest paid
  • Internet subscriptions, domain names, and hosting
  • Laundry
  • Legal fees
  • Licenses
  • Maintenance and repairs
  • Office expenses and supplies
  • Pension and profit-sharing plans
  • Postage
  • Print and copy
  • Professional development and training
  • Professional fees
  • Promotion
  • Rent
  • Salaries, wages, and other compensation
  • Security
  • Small tools and equipment
  • Software
  • Supplies
  • Taxes
  • Telephone
  • Trade discounts
  • Travel
  • Utilities

If expenses come from both personal and business usage, they are only partially deductible. Such as:

  • Home office
  • Automobile and transportation expenses
  • Meals and entertainment – only 50% is deductible
  • Gifts -up to $25 per person

Some expenses, even when they are directly related to your business, are never tax-deductible. These include:

  • Kickbacks or bribes
  • Political party or candidate contributions
  • Social club memberships fees and dues
  • Penalties and fines

Keeping good expense records can be a struggle for any small business owner.  One easy solution for freight brokers and freight agents to better manage their business expenses is to create a simple filing system with a folder for each month of the year.  Every month, store the receipts in their respective folder and at the end of the year just hand the box over to your accountant and he does the rest!

It’s simple: The more tax deductions your business can legitimately take, the lower its taxable profit will be which means more money in your pocket to help grow your business.

The above post is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

What does “Courting” have to do with Freight Brokering? EVERYTHING!

I recently had the pleasure of sharing my time with an older married couple. After learning that they had been married over 50 years and were clearly still in the honeymoon phase of their marriage, I couldn’t help but ask them what their secret was for maintaining a long and happy marriage. Which I found to be quite the accomplishment in a society where over 50% of marriages end in divorce. The gentleman’s answer came quick and was simple:  Never stop courting each other.

Being in the logistics industry, that message hit me like a freight train! Immediately, I could envision how freight brokers and freight agents could apply this principle towards their freight broker business to never stop courting.

What’s more is that this advice could be applied to the freight business or any business. For instance, when you meet the one you want to spend your whole life, do you treat them well or poorly? Do you court them or do you ignore them? The answer to both is obvious.

Just as a couple puts their best foot forward during the initial dating period, overall happiness and the desire to continue in the relationship depends on certain “needs” to be consistently met. The same principle can be applied to the freight broker/customer relationship.

Courting the Marketplace

For freight sales agents, building your book of business is no picnic but it is a necessity. If you’re doing it right, a LOT needs to happen even before that initial phone call is even made; researching prospects, building sales intelligence, getting past the gatekeeper, even creating the perfect voicemail message. And this process needs to happen each and every day. Like they say, if you’re not growing – you’re shrinking. But, after a while of courting the marketplace, you may feel the urge to stop. To stop building your contact lists. To stop reaching out to new prospects. To stop making calls. You begin to just coast along. (The-not-so) funny thing is, the problem with coasting is that you can only coast downhill! Freight brokers must continuously court the marketplace.

Courting Prospects

Industry success is similar to high school dating. Remember this guys? Seeing a girl who caught your eye and made your heart jump a little? Then, eventually, you’d gain enough courage to ask her out on a date. If she said yes, you took her out and courted her. If you wanted her to be your girlfriend, you courted her even more. The same process can be applied to your freight broker business by reaching out to three new contacts each day; you’re actually courting your prospects.

When turning a prospect into a customer, the challenge for most freight brokers is they don’t court their prospects the way they court the love of their lives, thus hindering the probability of success in the process. Most freight agents will court a prospect once and then stop. This is the equivalent of going on a first date and never calling the person again. If you want a long and lasting relationship with your customers, this isn’t going to cut it.

Courting Your Customers

When it comes to your customers, if you desire to have a long and lasting business relationship, you must court them. You must treat them like they’re someone you want to stay in your life forever. The more you court your customers by continually solving their problems and being relentlessly positive, the more freight you’ll move for them – period!

Continue applying that process to your customers by regularly following up and continuing to court them, year after year. A good habit to get into is to ask yourself these questions every day:  What have you done today to court your customers? Whose problems and drama can you solve? Whose day could you light up by taking a large load off their hands? How could you surprise and delight your customers today?

Court the marketplace, court your prospects and court your customers continually. Your success as a freight broker in this industry demands it!

Bonus Tools and Tips on Courting:

Be Appreciative – Always remember to say thank you, take your customers out to lunch, send a pizza to their office, mail a handwritten thank you note (or Birthday/Holiday card), invite customers to company events (like a golf outing or cookout), give away some company swag, pay them a visit – a little face-to-face goes a long way.

Be Attentive – Regularly follow up with your customers (via email, phone, visits), give your full attention during conversations (people know when you’re not paying attention), ask if they’d like to get the company newsletter, call back when you say you’re going to, if they reach out to you and you don’t have the time – make the time! Remember, if you stay at the forefront of their mind, you’ll stay miles ahead of your competition.

Be Helpful/Solve Problems – Check-in with your customers often and listen for issues, be proactive in keeping your customers (it’s easier to keep a customer than obtain a new one or gain one back), be genuine in your interest when following up (people can sense a feigned interest), offer additional services (i.e. different shipping modes), follow through (ex. even if their problem is accounting-related, stay with them on the issue until resolution).

Be Positive – Whether in person, on the phone or in email – keep the tone upbeat and positive, always. Attitude is everything and despite “good intentions”, if they don’t like your tone, demeanor or attitude, they’ll go elsewhere. Take the call and sound happy (smiling actually does come through over the phone). If it pertains, say Happy Birthday, congratulations, etc. Be human – crack a joke (keep it tasteful), talk about their interests (sports/hobbies, etc.), make small talk (not to add ‘filler’ but to create a bonding effect – such as recent crazy weather, weekend plans, an article or industry news they might find interesting, etc.)

Be Consistent – Consistency builds trust and speaks volumes about your character. Whatever you start doing (a weekly phone call, sending birthday cards/newsletter, yearly visit, etc.) continue doing. There isn’t the saying, “Consistency is everything” for no reason.