The Secret Sauce - Logistics Agent

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Are Chick-fil-A’s and McDonald's Big Mac sauces still a secret these days? If not there is no secret sauce.

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You hear it at conferences, acquisition meetings, sales seminars and the like. What is your secret sauce? What differentiates you from competitors? Pst, the only real answer is our level of effort and our integrity. individually and as company.

In transportation, more specifically in the freight brokerage arena, we find more similarities than differences, much like fast-food restaurant menus (burger, fries, chicken nuggets, and pop).  Sure, we have varying policies, procedures, practices and proprietary data, but we also use many of the same resources and base processes to source and cover freight. I truly believe it is our level of effort and the integrity within our actions that determine our level of success.

So, here I am, ready to offer up some insight into my super-secret recipe. I have bought into Jordan Reber and Mike Ceravolo, understanding we all win when we raise the bar collectively across the industry. This inaugural article is written with that spirit of collaboration. Over the last 15 years, I have successfully started multiple agent programs, recruited and worked with successful agents and built many close relationships, giving me insight into the great entrepreneurial minds of freight broker agents. I hope to share useful information through this series of articles.

So, with that introduction out of the way, what is the first secret in growing a freight brokerage agent program? It is knowing what makes a good agent. Anyone with enough drive can achieve anything, but in this article I am going to highlight three profiles that tend to make excellent agents. For each profile, I will share two points on why that profile is a good fit, and for good measure, one challenge. Some of this will seem obvious. It will be in general terms and could be applied to all, or nearly all, agent offerings. You may find you are reading about yourself or your company at times.

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Profile 1 – The Lateral
The most obvious profile would be an existing agent. They have direct experience operating as agencies and will have existing customers and a carrier following. Typically, an agent is not going to make a move as there will be a loss of revenue, not to mention the time and effort a transition takes. When they do make a change, you will find 2 common reasons.

Reason 1: You will see an agent make a change when there are significant and/or continual failures on part of the current brokerage they are partnered with. When these failures limit, or worse, negatively affect their business it is an opportunity to provide solutions that will remove the limitations and increase their net profits. Obviously, you will need to avoid adding new limitations and challenges. The following are issues that are severe enough to cause a change. When prospecting for agents, you want to look for these. If you have an agent program, avoid them.

• drop in credit rating

• change in commission structure

• mergers that change the status quo

• reduced safety score

• change in access to clients

Reason 2: This first reason is dependent upon another company’s failures, but the second reason we have control over. When existing agents contemplate a change, they consider the time, hassle, and potential customer loss that comes with transitioning to a new partnership. Simply put, you must offer enough value to leap over those hurdles. Here are some areas that can add value to your agency partners.

• maintain exceptional credit with the shortest pay terms you can manage

• create as large of a market and carrier base as possible for your agents

• provide technological advantages to decrease man-hours and increase coverage/sales (proprietary or third-party tools)

•build a relationship that goes beyond the transaction and towards their success

A Challenge: From time to time, an agency looking to make a move may be trying to avoid repercussions from an issue it has. It may be that they carried credit risk and a customer defaulted, or that they signed a customer contract that placed liability on the agent and there was a carrier failure, or maybe they did not maintain good documentation and amassed a large chargeback amount. Regardless, careful vetting and understanding of the agency’s motivation is always paramount.

Profile 2 – The Boiler Room

The next profile, I have often thought of as ripe fruit, ready to go (different than low-hanging fruit). These persons are working as freight brokers within call-centers, “smile and dial”, “boiler room” settings. They are handling cradle-to-grave brokerage services from prospecting for the client to check calling the delivery. They can directly convert that skill set to running an agency as a single person working from a home office or growing a team in an office space. For those that are self-motivated with an entrepreneurial spirit, there are two clear advantages, each having different weight for different people.

Advantage 1: Increased income! We all want to earn more money and it is the easiest message to convey as it is directly quantifiable. Those working in a call center often receive compensation comprised of base and/or commission amounting to about 1/3 of the gross an agent would receive. When making a direct comparison of pay structures, taking into account the operational costs to run an agency, the net income is greater as an agency. The good-ol’ greenback is still one of the greatest motivators.

Advantage 2: Greater Control. This point is harder to put a value on, but for those that it matters to, it is invaluable. Being an agent gives an individual greater control of his or her career, income and day-to-day activities. Agents target the markets they want (mode, commodity, region), plan and execute sales and operations, and grow as much or as little as they desire. This is a freedom, many yearn for. Finding those individuals and helping them tap into that desire can be drastically successful for both parties in the partnership.

The Challenge: Greater Control. (Hmm, sounds familiar!) The advantage of having greater control, can also be a challenge. This profile has typically never worked outside of a structured office space that comes with many benefits. It takes incredible drive to set and reach goals without a sales manager "encouraging" you for the first time in your career. Many agents from this profile start as a one-person operation, losing the support of a team around them to help with surges, to cover on sick days or vacation, and to simply have office banter with. These issues can be solved several ways but the challenges need to be known by both sides to move forward with a successful new agency situation.

Just like fast-food sauce, there is no secret.  As I mentioned earlier, the key is the effort put forth and the integrity we have, in this case specifically, with our agent partners.

I wanted to keep this article, and subsequent articles, quick reads. Let's hope I do better next time with more targeted and specific topics. I hope these three profile types give you a good starting point in your prospecting. If you fit one of these three profiles, I hope you see a couple of advantages and a challenge when considering an agency partnership. If you read this far, please comment and let me know what you found useful or what you’d like to see next time. Feel free to message me for greater detail.  

Thanks for reading.

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j.reid@arlnetwork.com

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