Freight Tec Blog

Should Agents be 100% liable for their customer’s Bad Debts?

Imagine one of your largest customers going belly up… and they owe you and your Broker company $50,000.00…

You soon learn there is no hope of collecting any of the money owed…

Who should pay for that bad debt?

It should be split the same way your commission was paid out between you and your Broker. If you are on a 50% / 50% split with your Broker, then you should both pay $25,000.00 of the bad debt.  If you are on a 60%/40% split, you would pay $30,000, and the Broker would pay $20,000.

Why?

Its fair. Its ethical. And both parties always have great interest in doing business with customers who will pay you.

I’ve heard of Brokers paying 100% of any bad debts from their Agents… They are CRAZY !

Lets me share a story with you…

I know of a company who practiced the policy of paying 100% of any bad debts from their agents. They did it because they thought it would lure agents into their company, and you what? They were right! They did lure a lot of agents into their company!

A few years down the road, they were hit for a $400,000.00 bad debt from one customer, then another one for 109,000.00, then another one for $55,000.00. The agent (who’s customers they were) didn’t care… he didn’t have to pay any of that $500,000.00+ back. No worries for him…

But there was great pain and anguish for all the other agents, and the broker. The broker was not in position to handle these rapidly mounting bad debts (there were more that rolled in). The broker tried to work things out… but the hole they were in got deeper and deeper too fast.

The broker quit paying the carriers.

The carriers sued all of the customers (and I mean EVERY single customer).

The customers had to pay all the freight bills again. (after already paying the broker months ago).

The customers were very angry.

The customers no longer trusted the agents they had worked with for years.

Good agents and several other good people lost their customer base – and their jobs. They could no longer provide for their families.

Agents now had to start over – their previous customer relationships were ruined because their broker ended up going belly up and not paying the carriers.

The criminal thing behind it all was this: There was a rotten apple agent who PURPOSELY did business with companies he knew were at risk of not paying their freight bills for one reason or another. Because he was paid his commission each week – he knew he would be paid before the bad debts hit the broker.  One bad apple spoiled the bunch… Actually, he put them out of business.

Agents, Carriers, Freight Broker Agent, Freight Tec General, Freight Trucking Company, Legal General, Shipper Liability, Shippers, Top Brokers, Transportation Logistics, Trucking Brokers

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Technology can be a great asset to your business.  Take advantage of this technology today and sit back and let the updates come to you.  You don’t have time to browse the web, you’re running a business – so let the web come to you.

So, how do you sign up?  I’m glad you asked.

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If you have any troubles at all, please Contact Freight Tec and we will be happy to help.

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Capacity is rapidly tightening up on ocean containers from China. How will this affect the U.S. domestic market in 2010? How will these containers be utilized in the supply chain?

Fast-paced change buoyed by surge in demand, shortage of containers.

Ocean container spot freight rates on the key export trades out of China to Europe and the U.S. east and west coasts soared by an average of 24 percent in the past three months.

The rate of recovery is much faster than expected, buoyed by a surge in demand this month, according to Alphaliner, the Paris-based container shipping consultant.

Continued high vessel utilization rates on certain trades, especially on services to Europe since Christmas, have also created shortages of empty containers in a number of locations, which in turn, has underpinned the higher freight rates.

The Far East-Europe trade posted the strongest performance with spot freight rates surging by 50 percent since October from $2,500 per 40-foot container to $3,700 based on rates filed with the Shanghai Shipping Exchange.

The steep rise in rates resulted from successive rounds of rate increases imposed by ocean carriers since October and the extension of the peak season surcharge until February.

“It remains to be seen if the rates are sustainable as the Lunar New Year holidays in China in mid-February could lead to some weakening in freight rates,” Alphaliner said.

Spot rates from Shanghai to the U.S. West Coast have risen by 26 percent in the past three months and are 17 percent higher on shipments to the U.S. East Coast.

Asia-Australia and Asia-Africa spot rates also have risen over the past three months, but rates to the Middle East, especially to the Gulf region, remain under pressure.

The high spot market rates on the major trades from China to Europe and the United States have come at a key period as contract rates for 2010 have also strengthened, Alphaliner said.

Twelve-month contract rates for the Far East-Europe trades starting in January or February 2010 are reported to be about 200 percent higher than last year, reflecting renewed optimism about trade prospects.

by Bruce Barnard

The Journal of Commerce Online

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Freight Tec would like to wish you a very Merry Christmas and a Happy New Year!

- Best Wishes to you and your family, from Freight Tec’s corporate office.

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Excellent article taken from Transport Topics, Aug. 11, 2009.

Opinion: The Customer Service, Dispatch Dilemma -

By Greg Shelton, Dispatch Consultant

As the recession deepens, there is growing awareness in the transportation industry of the role dispatchers play in keeping third-party logistics firms and freight brokerages competitive, particularly in the areas where dispatch and customer service collide.

This article reviews the fierce competition that exists in today’s market.  More and more Brokerages and 3PLs are striving for higher levels of customer service standards to keep customers.  Let’s face it – “keeping customers happy is a matter of corporate life or death”, states Shelton.

Think of it as the evolution of dispatch, in which basic survival depends on a company establishing and observing customer service standards. In a normal economy, hiring more customer service staff might solve the problem, but that’s difficult during a belt-tightening recession. It’s a dilemma that has caused some companies to reach outside the transportation industry and hire customer service and call center managers to help them make do with existing staff.

An experienced manager from another industry could help a company become more efficient by instituting phone upgrades, call accounting and service standards and by creating clear guidelines for various problem-escalation situations. An outside manager also could optimize staffing models by examining call volume spikes and pinpointing scheduling needs by means of forecasts.

But there is a caveat: Bringing in a manager from another industry might sound good to a company in this chaotic environment, but it also might prove to be counterproductive.

Look at this way: Hockey and lacrosse are somewhat similar sports. They both use sticks, have face-offs and use goalies. A hockey coach, while unfamiliar with lacrosse, could use the same techniques to motivate players and evaluate talent on the field, but that is where his effectiveness would end. Shooting a puck off a stick while on skates is radically different than running full speed and launching a ball out of a net.

This is the potential problem with managers from nontransportation backgrounds. Their intentions are good, but relying solely on their previous experience and knowledge will block any chance of success.

Customer service’s focus is on the individual caller and on never giving that caller cause to consider the experience negatively. Call center managers are trained to promote efficiency and work inside statistical models — calls should be answered in so many rings, resolved in so many seconds and agents should answer a predetermined number of calls per shift.

But one cannot assume these methods will translate effectively in a dispatch environment. A dispatcher’s job is to keep freight moving, and as a result there are countless situations encountered on a daily basis that may require excessive time or a firm hand. A manager has to realize that.

There is a real danger in companies becoming so dazzled with call reports and efficiency upgrades that they fail to see the department actually is regressing. Dispatchers become less self-reliant, less diligent and less focused on the overall goal.

Should dispatchers be evaluated using negative feedback, efficiency and call totals? Of course, but letting these philosophies be the only criteria in defining the position will undermine the department’s effectiveness.

My favorite point that Shelton makes is “Can one learn to swim by watching someone or by reading a book?  Perhaps, but without getting wet, you’ll never know what it’s like.”  This means that in order for a company to be successful, those that manager dispatchers need to know exactly what it’s like by doing it.  They won’t learn or understand how to fully motivate, teach, inspire, or otherwise manage a dispatch team if they have no idea what it is really like. 

The Question, as Shelton puts it, is “Which service did your customer pay for?”  Are they paying you for dispatching their loads, or are they paying you for your customer service abilities, which will inevitably become, empty promises.

During this downward trend in the economy, focus on what you do best.  Focus your efforts on your company’s Core Goal.  And strive for that goal in everything you do.  It’s time to simplify processes, re-think programs, and get back to the basics of customer satisfaction.

Agents, Carriers, Flatbed Freight, Flatbed Trucking, Freight Broker Agent, Freight Forwarder, Freight Shipping Rate, Freight Tec General, Freight Trucking Company, Owner Operator, Shippers, Top Brokers, Transportation Logistics, Truck Loads, Trucking Brokers

If you didn’t catch it yet, be sure to check out Freight Tec on the cover of Internet Truckstop Magazine for the Sept/Oct 2009 Issue.

Visit Truckstop.com for more information or go right to the full magazine by clicking Here.

Be sure to check it out and let us know what you think by commenting below.

Agents, Carriers, Flatbed Freight, Flatbed Trucking, Freight Broker Agent, Freight Forwarder, Freight Shipping Rate, Freight Tec General, Freight Trucking Company, Owner Operator, Shipper Liability, Shippers, Top Brokers, Transportation Logistics, Truck Loads, Trucking Brokers, Trucking Quick Pay

Freight Tec was recently featured on IT Magazine by Internet Truckstop.

“Techology is the wave of the future and those not riding it will be left in the surf paddling”

- Jeff Graves, CFO Freight Tec.

Here is the cover -

“We’re early adopters of technology.  We’re always testing it, checking it out and keeping tabs on it.  If it’s technology that’s going to help in any facet of the business, we’re out there and using it.”

- Steve Van Otten

Other highlights of Freight Tec and this article:

• Freight Tec is ranked in the Top 100 of all Freight Brokers nationwide – by Inc. Magazine.
• Freight Tec carries Error and Omissions Insurance and guarantees qualified carriers
• 24 years in business (since 1985) with strong Back Office Support
• Member of the Transportation Intermediaries Association (T.I.A.)
• Platinum Performance Program (P3) Member of T.I.A. & $100,000 GPP Bond
• Qualified & approved to haul Military freight
• Contracts with 21,000 different Carriers in the U.S. and Canada
• Quick-Pay Programs to keep the Carrier coming back to haul your freight
• FREE Auto-Marketing System for you to use to grow your Customer base
• Bonus / Incentive Program

Please contact us with any questions, and don’t forget to read the full article in IT Magazine.

Agents, Carriers, Freight Broker Agent, Freight Tec General, Freight Trucking Company, Shipper Liability, Shippers, Top Brokers, Transportation Logistics, Truck Loads, Trucking Brokers, Trucking Quick Pay

Am I being paid a “fair” commission split for the kind of business I’m doing?

What is a “fair” split?

A “fair” split is one that takes many things into consideration. Here are a few of them:
What Freight Tec takes into consideration:

• Trustworthiness of the Agent / Prospective Agent
• revenue level
• gross profit
• credit risk of your Shippers
• ease of doing business with your Shippers
• (the list goes on, and for simplicy’s sake – I’ll stop here)

I notice when prospective Agents call me to find out about Freight Tec’s Agency program – the first, and most popular question they ask is “… what is your commission split?” While a fair and reasonable commision split is important to have, it is not the most important thing to have.

If a company offered you a radically high commission split, would you take it?

Would it raise any red flags to you?

What are some potential risks for you?

Here is a list of some critical issues You need to know before signing on with ANY Broker:

• Trustworthiness of the Broker
• Financial stability
• Back office support
• Hours of operation
• Reputation in the industry
• Policies and Procedures of the Broker

Companies in the industry offer commission splits that range from 25% - 70% being paid to the Agent. The Industry average being paid out is 50% – 60% to the Agent.

More to come on each of those topics listed above…   If you have questions or comments – please email them to: steve@freight-tec.com

Thank you

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Freight Tec was recently named as one of the Top Brokers in the Nation by Inc. Magazine.

What it does: A freight broker matching shippers materials with carriers in need of loads to transport.

Why it’s growing: Investment in technology that provides its customers with live tracking, logistics integration, customizable pick and supply chain management.

What’s noteworthy: The company’s revenue numbers for 2006 have put it in the top 100–out of an industry of 14,000 in the United States.

Read the Article here

Agents, Carriers, Freight Broker Agent, Freight Tec General, Shippers, Top Brokers, Transportation Logistics, Trucking Brokers