When will freight markets turn? Part 2: Building business for trucking's down cycles

Gary Buchs: Where we're at right now and where's this market going? I think we've got so much, angst about the election that this is kind of holding companies back until they know, a little more about their future.

Todd Dills: The voice there was that of overdrive contributor and owner operator business coach Gary Buchs, responding to questions put to him by attendees of Overdrive’s “How to build business for trucking's down cycles” online roundtable in August. The question in particular had to do with whether and when the long freight rates slide we've seen over two years now might turn the corner, or at least stabilize since the late August time period of discussion. The march toward the presidential election, in a modicum of certainty on that front continues, of course, but perhaps more importantly, the Federal Reserve has cut benchmark interest rates by half point, the first such cut in quite some time after numerous hikes over the last few years meant to tamp down inflation. Buchs posted recently in his truck business network group about expectations of further cuts when the fed meets again late in the year and early next year, which could spell not only good news for borrowing costs to, say, finance a truck purchase down the line, it could also stimulate spending and moves in various sectors of the economy, generating freight. In essence, Buchs noted, get ready for potentially improved conditions, but not for a good while yet.

Here's how he put it. “Every trucker is waiting for the market to turn around, as so called experts keep predicting. These interest rate cuts are historically some of the things that will make this happen. But the increased opportunity for better rates doesn't happen overnight. Go into your phone and set an alarm for four to six months out from the date these interest rates make dramatic moves. Odds are, that, is about the time business will change. As it takes time for companies to have confidence to place more orders, then the companies manufacturing have the confidence to ramp up production and the cards begin to fall and make things move.”

He went on to compare running an owner operator business to an ultra marathon, as it were. The return on investment of hundreds, if not thousands of hours of intense commitment and training aimed at a goal is celebrated when one day we finally are able to cross that finish line.

I'm Todd Dills, and today on the podcast we hope to give you further opportunity to learn from Buchs and two other panelists who were part of our roundtable, namely Silver Creek Transportation founder and president Jason Cowan, Overdrive Small Fleet Champ for year 2021 and ICV Express owner operator Ilya Denisenko. In the previous part of this two part podcast panelists ran through a variety of customer management tactics aimed at preserving relationships, building new ones, and batting back those inevitable requests for a quote unquote discount from even long time customers.

Today they field a variety of live audience questions, from those about timing of a recovery Gary Buchs was responding to and what you heard at the top to special considerations for flatbedders when it comes to customers, what owner operators can do to combat brokers ever increasing insistence on roadside inspections on the record as a condition of doing business, and more after the break for a word from overdrive radio sponsor Howes. We’ll dive right in with a question directed to small fleet owner Jason Cowan about just how to compete when shipper customers are being solicited at cut rates by brokers.

Jason Cowan: Is it polite to say we throw them under the bus?

Todd Dills: Keep tuned.

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Todd Dills: That's h o w e s, howesproducts.com Here's that question about brokers put to Jason Cowan. As I summarized it during the roundtable, the next voice you'll hear after Cowan's and my own will be that of ICV Express owner operator Ilya Denisenko, headquartered in Chapel Hill, Tennessee, with owner op coach Gary Buchs following sometime after.

Here we go.

Do you have a particular way of competing with brokers that are, that are, that are coming to your direct customers? Because, I know that's sometimes a difficulty, and we've heard about a lot of that in this environment lately. Is there anything in particular that you do, or is it just the kind of things you've already talked about here?

Jason Cowan: Is it polite to say we throw them under the bus? Would that be.

What we understand is that every one of our direct customers also been solicited by a 3PL from somewhere. We just know that going in. And so what we have to do is sell. Why would you want to be with us instead of them? And one of the, one of the key tactics that, you know, he says, so if a trucking company has a load and you're our direct customer, and we have a load, that's a three Pl and we have to make a decision of whose load is priority. It's always the direct customer and, you know, that gets them to thinking, wow, you know, so, and then you lean back on the service.

This is what we've been able to do for you, in the past. And you know, with us, you know, another one of the things that we said with our leadership team, you know, you have our phone number in your phone and we answer the phone at 02:00 in the morning, you know, and with a free pl, they may answer the phone but they have no idea who's your freights on whose truck. And so all of these things in mind, you know, we're the better choice. And as you know, m Italy has said, you know, we can track, you know, where your load is, we can send you emails and you know, there's so many of those things that, that make your life easier because, you know, I think that all that, the one that, well not all, but one of the main things that 3PL offers, it was price.

And they realized with that there probably could be some service interruptions and service interruptions lead to phone calls and emails and things that you don't want and you know, we're all in the same thing. We just, we would love to have a nice quiet day where all the work gets done and I, nobody calls, nobody's fussing and if you want that, then that's why you want to choose us.

Because that's what's going to happen, right?

Todd Dills: We’ve got another question in the chat has to do with you know, what always tends to happen during during a down market, is that, you know, those that would prey upon carriers come into the, into the picture. Identity, a lot of identity theft. A lot of people coming in, pretending to be carriers, double brokering loads and doing that kind of thing. And a lot of cargo theft happening too. It's happening all around us. And I mean, the question has to do with, what load boards you trust in that regard or is it more a matter of, you know, looking at the entity you're dealing with a little more closely and just, I don't know, how do you come to a situation of trust? I mean, Ilya, you're probably the one that's been on boards the most. Jason, you, you've probably worked off of some boards yourself, but any thoughts in that regard on just kind of avoiding getting involved with the crooks?

Ilya Denisenko: I guess from what I see online and what all the load boards themselves are even doing because they're kind of like the middle person between us and the brokers. It seems that truck stop is doing quite a bit more than the rest to prevent fraud on both sides and they're actively documenting it. Obviously there's going to be some that fall through the cracks just from numbers. You know, if it's like one in a thousand, there's still thousands and thousands, you know, so it's going to happen. But they seem to be extremely active to prevent fraud and all that stuff. But I mean like I said, my goal is to work with a few smaller to mid sized brokers, not with load boards. I actually still haven't booked a single load off a load board and that's one of the benefits.

It's the quality of the broker, it's the quality of their clients and for them also it's the quality of the service that I provide other than the random person that's going to call them if they post that load somewhere.

Todd Dills: It's establishing a relationship with your freight partner rather than just scattershot, picking up where you can pick up freight wherever you can kind of thing. I mean that's exactly what, what what you did to build your business, Jason, I believe, yeah.

Jason Cowan: It's a unique situation with the brokers. A lot of times it, your, your senses kick up real quick when you begin to talk to a broker that you think oh, something's not right here. They ask you a lot of times if you give them a rate and they don't even negotiate. Yep, I'll take that. And you know, go and you know, that's just typically not how that's worked. You know, different things and so we're nothing afraid to, once we find out some information to do some background checking on you know, so the very first thing is we want to deal with brokers that we know are reputable and that we deal with day in day out. And so we try that. That's I think the first step to avoiding anything, that's going to get you in trouble is dealing with guys that are reputable. Second thing is if you think something's going on, check it out, you know, it's not, we're not beyond maybe calling the shipper and go, who did you sell this load to? You know, and you know, they go, what do you mean you know? Or a lot of times they will tell you the answer, hey, this load belongs to this certain, you know, three pl does all of our freight, or this one? And you say, well, you know, where's this? You can find sometimes these loads are more than double brokered. You may be three or four down the line, you know, but usually there's things that give them away while you're in negotiation with them that you can pick up on and go, that's not right. And best thing that we have done is we tracked a, who we're dealing with and the loads that we have and there again build those relationships with.

Todd Dills: We talked about this a little bit, I suppose, when we were preparing for this, but does anybody have any sense of whether and when, this kind of slide that we've been on is going to stabilize it all? And you know, if so, what, what kind of, I don't know, what kind of things are you looking at in terms of the data that's out there available to tell you that? There's so much out there, a lot of, a lot of the freight analysts we see talking about, well, it's probably going to get better in 2025 after the election's over. But then does that depend on who wins or is it just the certainty of the election being finished? Gary what's your thought there? You clearly got a response.

Gary Buchs: I've got some thoughts on this that I try to be real practical with it. I take a very broad view of things like the economy, investments, the trucking, customer base. And I think it's important to realize that we have different segments of the industry and many of them are seasonal, for example. And I, so you as an owner operator and how you plan, you know, I talked about, you know, being a little bit diverse, but in a region and so on. So things like, in the springtime agricultural work or moving chemicals or fireworks, for, you know, the holidays. But where we're at right now and where's this market going, I think we've got so much, angst about the election that this is kind of holding companies back until they know, a little more about their future in some cases. and once the election is over, they will begin putting in place things for the first, you know, and particularly the second quarter of next year. I really do think.

Let me throw out, ah, another cost free, strategy for you when you're looking or trying to negotiate on loads. And I learned to do this when you call Orlando, email or however you communicate about a load you're interested in, no matter who it is, try not to lead them to give you answers you want about the load. So I would, I developed a strategy where I'd say, do you have this load? Yes. well, would you tell me everything you can about the load? And you either get details. Yeah, I do this every Tuesday, or I ship it every day, whatever, once a quarter, once a month. And, and you know that it's real. They know their customer, they know their load. But then I got a call, I had a call and the guy says, well, it weighs 45,000 pounds and pays this. What else would you need to know? He didn't know anything about the load. And I just politely said, I know that it's not the right load for me, and I didn't have to give him a reason, and you don't have to. So be the leader in the control. Use that. And then your spidey senses when you, when you listen to that. But if they say no, or if that load doesn't work, don't be afraid to ask, hey, do you have anything else? Or, you know, do you have this load coming up in the future? I like what I'm hearing. You know, how could I maybe help you, as has been stated here, be that customer service person to go the extra mile?

Todd Dills: Got a question coming from our chat from one of our attendees about, you mentioned specialized work, Gary. And the questioner is looking to do flatbed work and is wondering about the, viability of, utilizing, brokers. Let's see, is it better to be, to use a broker for flatbed freight or, is it better to be on your own, working with shippers directly and, are load boards a viable option for flatbed?

I know there's a lot of flatbed loads out on load boards. You see them all the time, but you've got flat, you've got some flatbeds in your operation, Jason.

Jason Cowan: We do. I think you're always better if you can have a direct freight, a direct customer have that direct relationship that's going to pay you a better dividend in the end because you're building that relationship with that customer. they're going to be more willing to work with you and show you the lanes they have and you find a lane that you can work with. So anytime you can make the direct relationship, always do that. of course, there again, we see many customers who are using the three pl to move their freight. Sometimes that's the relationship you have to make. but that just, I don't know, in this economy, I'd want to just be cold calling off the load board.

Gary Buchs: You know, when we talk about direct customers, often we think about actually the shipper receiver, but that three pl or that broker like Ilya, they can be your direct customer. So don't, don't confuse, that in a lot of companies use the three pl or broker to manage their traffic. Now, they don't have in house traffic management, and that's why you're going to have to learn to work with them. And it's, don't consider every broker, every three pl a negative. They have a job. Sell yourself. Be the person again that they trust.

Todd Dills: We had another comment about folks getting calls all day long, right? Like, how do you actually establish that relationship? We've heard from Ilya about, what he did to sort of make direct contact with brokers. How do you get your foot in the door with anybody, I guess is the question. Everybody's getting calls, getting solicited in a market like this all day long.

There's some other things we maybe haven't talked about yet. Gary, you've talked about this very particular subject, in terms of how you get comfortable being the salesman, you know, and that extends not only to, you know, the person that actually is making the decision, but the people that you encounter on the docs get to getting to learn the places that you go to, getting to know, I should say, everything about the places that you go to and making sure they know you and what you can do, right?

Gary Buchs: Handing them that business card, attaching to that bill of lading before you get there, when you sign out a load you printed, sign your name with your cell phone number, and you say, look, when I leave here, if there's an issue, call me direct, because it could take an hour or more to get through the chain of brokerage and agents and so on. And true story, I had pulled out of a dock and I was securing the load and getting everything in order, and I got a call from the dock and they said, oh, my gosh, where are you? And I said, well, I'm out in the parking lot right now. They said, you got to be kidding. I said, no. They said, you didn't fly off the lot? I go, no, I'm, I'm getting ready, but I'm not gone. They said, we forgot a pallet, could you back in? And I did that if they wouldn't have had my direct number. They told me flat out said, this could have cost us $2,000. You know, that kind of value, they never forget. it's so simple, and so many truckers think they want to get in their truck and hide. You don't want to hide from your customer. It's like Ilya said, hey, you want to track me, track me. I don't care if you're that bored. And you track me and follow me around, people act like it's a severe invasion of privacy. But if I got a half million dollars of their product, if they've got a half million dollars of my product, I want to know where that sucker is every minute of the day, you know, especially today's market. And that's another thing to realize that when you get ready to book a loan or you're looking at a loan, don't be afraid to ask the, the broker or the customer, what is that load valued at? What is the value of it? What is the commodity? You never haul a load without knowing the commodity, and things like that. Because I've talked to truckers that they had a problem with something, and I said, well, what are you hauling? They go, well, I don't know. How do you not know what you're calling? But it does, it happens. So we got it. These are all no cost things. Almost everything we've talked about. These aren't going to suck money out of your budget or your revenue. That's the thing that's so exciting about this discussion to me a little bit.

Jason Cowan: you know, Todd, you're selling yourself to the, to the gentleman that wanted the flatbed. you know, know about what to do with the flatbed. One of the things that we did when we were little, which our smaller carrier was, you know, if a shipper didn't want to deal with us because we didn't have enough trucks, we, instead of just ducking our head and leaving, we would say, okay, here's my card. If something happens, somebody drops a load, somebody misses something, you know, give me a shot, let me cover it, and, you know, wow, boom, there's that card on his desk. And I promise you that's going to happen. And then as you begin to do, you know, some different loads and different things, and they see your service, then the other things tend to go away because the end of the day, everybody just wants their problem solved so they can go home. That's, you know, we want, when we're done with our load, we want to go home and, you know, spend time with our families. And do that. And, and so I really think the whole process is building the relationship, finding out what people want, what's going to make their life better, and how you can sell that. So, yeah, maybe our policy is you have to have ten trucks before we will give you a load. But, you know, that would change if it's 05:00 on a Friday afternoon and they have nobody and they have your car.

Todd Dills: You got to be the emergency solutions provider. And that gets you. That's the way to get your foot in the door for sure, right? Yep. And it leads to bigger and bigger and better things to come.

Ilya, question for you. do you have an inspection yet?

Ilya Denisenko: yeah, actually.

Todd Dills: Oh, you do? Okay. We've got a question about how to get around, how to convince a broker to use you if you don't have any inspections and you can't get one.

Ilya Denisenko: Well, actually, I got my inspection, I think the third or fourth day after I got my, like, in the first week, it was a full inspection with everything. And I even had a violation. My only violation was on the side of the truck where it says dot. And then the number. I didn't print USDot. The missing was my only thing. But I spoke to the brokers at the broker carrier summit and I was like, what's this inspection thing? Like, why do you guys care about that? And they said, just the more events that are on your dot, on your authority, like, list, whatever, like, it just shows them that you're an actual truck driving. They don't care about the results. Right. So if you're a newer carrier, what you could do is when you're doing your new, your new entrant, audit, you can speak to the officer, which is what I did. And I said, hey, by the way, is there any way to get another inspection? Like, I'm a new carrier? This is what the brokers want. And he was happy to help. He said, hey, if you're ever in my area, I'm out of so and so, give me a call, I'll go out to this way station, I'll give you an inspection. If not, these are the other way stations in the area that'll be happy to give you an inspection. Just show up, like, wouldn't probably when it's not busy, if you're ever rolling through, just go into the parking area and ask them and I'll do it for you. So there's ways to do it. Just communicate. Don't, don't assume that they don't like you don't assume that they just want to find you. They're just doing their job. And ask them, like, same as brokers, same as shippers or any customer, over communicate, like, what you think, what you might need, ask them what they might need, and stuff will work out a lot better.

Todd Dills: Seems to be rare anymore. that's good to hear. That there are states, inspectors out there that will, that are willing to, to perform inspection voluntarily, because anymore it seems like this is going the other way. And, and, you know, that's, that's not the priority for folks, but, yeah, man, you know, there's different people. Do you mind if I ask where, where was that inspector based?

Ilya Denisenko: by the Knoxville area.

Todd Dills: Oh, this is in Tennessee. Okay.

Well, anyway, we're getting close to the end here. I just wanted to put a little, a little call out to all three of you guys. We're planning for the year ahead, elections coming up. we'll have some certainty after that about, in the business community out there, about what folks can expect. I think what we, what should owner operators be doing plan ahead for the rest of this year? Gary?

Gary Buchs: Well, I, thought about and what I'm seeing both personally and I, and reading the biggest risks. We've talked about solving problems here and we talked a little bit about, but the major risks that I'm seeing owners are dealing with are healthcare and health issues where they are, that's worse than being put in a shop for repair, because we have drivers who are losing, you know, they're losing their businesses because they, their health has deteriorated and they haven't planned for it. So being prepared, not only financially, but taking care of yourself, healthcare, and then that equipment repair, and the way to really kind of offset that is get into the shop and do that preventive, predictable maintenance and repairs. Beat, beat the, beat the problem, beforehand. and those are, those are a couple of things that will actually, I think, pay you back quite well.

Todd Dills: Ilya, what are you thinking about, planning out for the year ahead, the rest of the year, I should say.

Ilya Denisenko: Just work smooth and steady. Don't overspend. See, like what you can do yourself versus outsourcing, for example, like paperwork, accounting, what Gary was saying. Maintenance, preventative maintenance. But there's also the repairs. Anything, any of that kind of stuff. You might be able to do that yourself without knowing too much about the truck. You got YouTube these days. You could go on there, you could see detailed videos. I had to like take stuff apart, put it back together, and it's pretty simple. and that'll save you so much money versus going to the dealer, or if you really don't want to do that kind of stuff, go to a smaller private shop versus the dealer. The rates are a lot better and their work is better.

Todd Dills: Jason, thinking toward the end of the year?

Jason Cowan: I think the one thing that you can do is realize that Christmas comes the same time every year. Get your calendar out and say, okay, in reality, this is how many working days I have left this year. These are the weeks we're going to be slow. These are the weeks that my customers going to be gone for the week. So, you know, if I need things I need done preventive wise, maintenance wise, can I schedule it around? Those times are going to be off. I know this is times my revenue is going to be down. So what do I need to do here to get through those while we bring up Christmas is good because you know, you're always going to lose some revenue if you're businesses closed between Christmas and new year. So I need to plan for that. And I can look now and say, okay, I have these many days left for the year and, you know, now we're closing it on September 1. You know, we all be able to look at that and go, okay, how am I going to maneuver these days and and how am I going to plan for things that I need? You know, maybe like Gary said, how can I take care of my health? I'm going to be, you know, this is going to be a slow week for me. So can I go get my physicals, my checkups, dental stuff, you know, and plan for all that.

Todd Dills: As we wrap things up. I do want to make note of this. This is a resource that we have at over, we at overdrive have available to you, I think you heard me reference, reference, it near the top of the seminar, the seminar that we did mid America trucking show. You heard me reference that. Ah, that's our partners in business program. It's co produced with ATBS. And the centerpiece of it is a more than 100 page book here, essentially, that you'll find @overdriveonline.com/pib that's overdriveonline.com/pib. I encourage you to go there, not only download the book, which is a kind of start to finish manual running and growing an owner operator business. But also there you'll find a variety of other content highlighted on the page. All of it deals directly with pertinent business topics for owner operators, and small fleets, some involving or even written by the men that you've heard speaking here today. again, that page is overdrive online.com pib, and, I'll encourage all of you with any further questions to, network with Jason, Gary, and Ilya here. I know they'd be happy to talk with you about what they're doing.