Speaker 1: From UFOs to psychic powers and government conspiracies. History is
Speaker 1: riddled with unexplained events. You can turn back now or
Speaker 1: learn this stuff they don't want you to know. A
Speaker 1: production of iHeartRadio.
Speaker 2: Hello, welcome back to the show. My name is Matt,
Speaker 2: my name is Noel.
Speaker 3: They call me Ben.
Speaker 4: We're joined as always with our super producer Paul, Mission
Speaker 4: Control Decant. Most importantly, you are here. That makes this
Speaker 4: the stuff they don't want you to know. Big, big thanks.
Speaker 4: That's how we begin tonight's episode to all our fellow
Speaker 4: conspiracy realist in the trucking and shipping industry. We get
Speaker 4: a lot of amazing correspondence from people on the road.
Speaker 4: We hear a lot of crazy stories, and we want
Speaker 4: to begin by expressing our gratitude. We are mensely fortunate
Speaker 4: that you all have joined us this evening and now there.
Speaker 2: Are a lot of you out there right and it's
Speaker 2: a lonely road, and it's a long road, and we
Speaker 2: just we appreciate that you let us hang with you.
Speaker 4: So thank you, And Matt Nole, maybe we get into
Speaker 4: it this way with our with our thank yous put
Speaker 4: out there on the record. What's the last thing you guys,
Speaker 4: bought that got shipped to.
Speaker 2: You filters for my air unit that were the wrong
Speaker 2: size that I then ordered some more that were the
Speaker 2: right size. Just happened.
Speaker 5: Modular synthesizer piece component. It's a module. Yeah, that's That's
Speaker 5: mainly what I've been ordering these days. I don't know, guys,
Speaker 5: have you ever ran into a situation? I know, Amazon
Speaker 5: is it's a whole other thing, and like it's a
Speaker 5: whole other like questionable, potential ball of evil.
Speaker 6: I use it.
Speaker 5: I'm gonna gohead and cop to it now. And sometimes
Speaker 5: you'll order a thing and then it'll come the same day,
Speaker 5: and I'm like, why and how and.
Speaker 6: Who is being put out?
Speaker 5: And whose life is being made miserable so I can
Speaker 5: get my whatever the heck, you know, phone charger on
Speaker 5: the same day I place the order.
Speaker 2: Well, well, let's imagine though, so at least in my situation,
Speaker 2: the products that I ordered came from some distribution center somewhere,
Speaker 2: and then it was whatever that company's like standard shipping
Speaker 2: route would be or shipping company would be. So in
Speaker 2: this case, it was a FedEx package. So FedEx as
Speaker 2: a company shipped it to me. And there I think
Speaker 2: we have to just maybe as we're getting into this
Speaker 2: set up that FedEx and ups and the postal service
Speaker 2: are kind of one thing over here to the.
Speaker 4: Side asset based carriers or parcel carriers often.
Speaker 2: Exactly, but that's not really what we're talking about today, right.
Speaker 4: Yeah, yeah, And to answer that question, I was making
Speaker 4: this face because guys, I've been drinking from these plastic straws.
Speaker 4: You know, our other co host is coffee, and they're
Speaker 4: just not as good. I gotta say it, but those
Speaker 4: get shipped. So many things get shipped. These real life
Speaker 4: road warriors play this often unacknowledged role in without hyperbole,
Speaker 4: in keeping civilization going. Virtually every single industry that you
Speaker 4: will ever interact with relies in some way on trucking
Speaker 4: and shipping in one method or another. It's a hard life.
Speaker 4: A lot of truckers, a lot of people in the industry,
Speaker 4: as we know well, are increasingly squeezed by any number
Speaker 4: of factors. But our question is how deep does this
Speaker 4: squeeze go? Is there something they don't want you to know?
Speaker 4: This evening, fellow conspiracy realist, we ask what are freight brokers?
Speaker 4: Here are the facts, I guess guys to understand freight brokers,
Speaker 4: freight forwarders, and the related roles in this industry and
Speaker 4: the controversy surrounding them. We first have to talk about shipping,
Speaker 4: which is amazing, like that did. That was not a
Speaker 4: thing for a long time.
Speaker 5: So if you live anywhere near a you know, more
Speaker 5: of a metropolitan area, or even you know, a smaller city,
Speaker 5: you're gott to see tractor trailers and semi trucks every
Speaker 5: day on your roads or interstates or you know, highways
Speaker 5: and byways. Some of these are what are known as
Speaker 5: general carriers, and some of them are company.
Speaker 6: Or industry specific.
Speaker 5: These semi trucks you're talking about come in lots of
Speaker 5: different varieties, types and sizes. Shipments over one hundred and
Speaker 5: fifty pounds that's considered freight, which differentiates that shipment from
Speaker 5: the parcel services that we were talking about.
Speaker 6: Freight is ball goods.
Speaker 5: Freight is the stuff that's going to end up at
Speaker 5: that warehouse that Matt's talking about, which then gets filtered
Speaker 5: down into more regional, you know, localized carriers. And actually
Speaker 5: I answered my own question in my head, I think
Speaker 5: this is right when I said, how is it the
Speaker 5: thing that I ordered today gets delivered today is somehow
Speaker 5: through the infinite wisdom that is the logistics I guess
Speaker 5: department or whatever of Amazon, they figured out that the
Speaker 5: thing that I want, that toothbrush, already exists in a
Speaker 5: local shipping warehouse, a local one of these depots, and
Speaker 5: they then hire out more like the equivalent of an
Speaker 5: uber driver to go pick it up and bring it
Speaker 5: to me. Because I've noticed every time I get some
Speaker 5: in the day of it comes in a civilian vehicle.
Speaker 2: So there you go.
Speaker 3: Yeah, it's it's even.
Speaker 4: We can take it a step further and say that
Speaker 4: the logistics industry aims for a bit of prognostication, a
Speaker 4: bit of prescience. They're not specifically thinking about one person
Speaker 4: ordering a thing. They're saying data shows us the X
Speaker 4: amount of people will reliably order why product right or
Speaker 4: category thereof, And so with a little bit of planning,
Speaker 4: and this happens in every industry, grocery stores as well.
Speaker 4: With a little bit of planning. The idea is we
Speaker 4: can buy something in bulk or manufactured ourselves, we can
Speaker 4: sell it to someone at a markup, and we can
Speaker 4: pay the people who bring the physical object to the
Speaker 4: customer a little bit less than our entire profit margins,
Speaker 4: such that when it works, everybody wins. And this applies
Speaker 4: to cargo ships, it applies to aircraft, it applies to
Speaker 4: little like crazy story I was when I was living
Speaker 4: in a different part of the world, the most reliable
Speaker 4: way to ship stuff was just a bunch of crazy
Speaker 4: ass dudes on tiny motorbikes, like on tiny like dirt bikes,
Speaker 4: and they where they had made their peace with God
Speaker 4: the way they drove.
Speaker 2: I thought you were gonna say, buy tuck Tuck, But no, dude,
Speaker 2: that's even drones now are in that category, by the way,
Speaker 2: and on a lot of these websites we were looking
Speaker 2: at that just kind of teach you about what freight is,
Speaker 2: what logistics are, what brokers do. It's they're talking about
Speaker 2: drones more and more, which I honestly thought was an
Speaker 2: Amazon only thing, but it appears that that's becoming a
Speaker 2: part of logistics.
Speaker 4: You save so much money not needing to worry about
Speaker 4: the state of the pavement or the roads.
Speaker 6: Not to go too.
Speaker 5: Far a feel, I think this is appropriate if you're
Speaker 5: talking about buying in bulk, in terms of what consumers
Speaker 5: are able to do. You go to a place like
Speaker 5: Costco or you pay a membership for the privilege of
Speaker 5: shopping there and being able to buy things in bulk.
Speaker 5: But they don't have all the things. They just have
Speaker 5: some of the things, and they do a lot of
Speaker 5: research and logistics numbers running to figure out what those
Speaker 5: things are and how much much of them they're going
Speaker 5: to be able to successfully move.
Speaker 4: Yeah, I mean things can be transported domestically or international
Speaker 4: by internationally, i should say, by land, air, or sea.
Speaker 4: The best way to put it is that human civilization
Speaker 4: makes so much stuff every day, every hour, constantly you
Speaker 4: want a thing, can you imagine a thing, someone will
Speaker 4: sell it to you by legal or illegal means. And
Speaker 4: for those folks making that stuff, whatever that stuff may be,
Speaker 4: it is a waste of time for them if they
Speaker 4: can't get those products to the consumers. You know, you
Speaker 4: have a shoe factory, and of course you would save
Speaker 4: a lot of money if everybody in the world who
Speaker 4: wanted those shoes traveled to you and just bought your
Speaker 4: stuff where you made it. But that's not feasible. So
Speaker 4: we see a kind of meta industry, an uber industry,
Speaker 4: not related to the company Uber, but they're into freight
Speaker 4: as well, it's like a thing that is entirely designed
Speaker 4: to get all the stuff across the world from point
Speaker 4: A to point Z in theoretically the fastest, safest, most
Speaker 4: efficient manner. And it's huge. We all kind of know
Speaker 4: it's huge. Like we were saying earlier, if you are
Speaker 4: in an urban area, if you're in a metro area,
Speaker 4: you will always see some sort of freight truck on
Speaker 4: the road. They're going somewhere, they're doing something. But I
Speaker 4: think once we look at some of the statistics, we
Speaker 4: get an experiential sense of how massive this industry is,
Speaker 4: Like it is a sleeping giant. And without this industry,
Speaker 4: the world as we know it simply does not exist.
Speaker 2: Okay, so let's say you're driving on a highway in
Speaker 2: these good old United States. You're going to see a
Speaker 2: lot of trucks on the road. They're pretty popular, and
Speaker 2: we're talking everything from like a Tacoma to what an
Speaker 2: F three fifth or you know, a giant consumer truck.
Speaker 3: But there are Yeah, man, I hate the environment. Let's
Speaker 3: get the trucks.
Speaker 2: Some of them are electric, sir. The rivian trucks an
Speaker 2: electric vehicle. Yeah, what about the cyber truck? Truck?
Speaker 6: Let's be honest. Well, that's something called a fronk. I mean,
Speaker 6: give me a break, that's right.
Speaker 2: But there are thirteen estimated thirteen million trucks of all
Speaker 2: shapes and sizes out on the road and in garages,
Speaker 2: and out of those, there are two point nine million
Speaker 2: of those semi trailer trucks, the huge ones. They can
Speaker 2: put an entire load of freight on them and ship
Speaker 2: it across the United States. And again, many of you
Speaker 2: listening right now are in one of those and just
Speaker 2: rolling down the road.
Speaker 5: I'll tell you what occurred to me when when we're
Speaker 5: looking at these numbers is just how powerful the Teamsters
Speaker 5: union is and always has been, and perhaps why it
Speaker 5: was such an interesting target for corruption and for infiltration
Speaker 5: by you know, criminal elements, because a strike from Teamsters,
Speaker 5: as you pointed out, Ben, would literally bring civilization grinding
Speaker 5: to a halt.
Speaker 6: Yeah, that's a.
Speaker 4: Rough one, and I'm glad you're making that point. Also
Speaker 4: a powerful union also, folks, Teamsters just for the etymology
Speaker 4: nerds in the crowd, Teamsters were named after like the
Speaker 4: idea of running a team of horses, right, Yeah, And
Speaker 4: you know, transit has always been oriented toward the idea
Speaker 4: of the best way to move stuff?
Speaker 3: I mean it is.
Speaker 4: Is it not kind of silly that the measure for
Speaker 4: the power of an engine is called horsepower?
Speaker 3: YEAHTI horses know about that.
Speaker 5: It's borderline one of those skewmorphs you were talking about.
Speaker 6: Ben.
Speaker 5: I'm sorry I've been hung up on that, but it's
Speaker 5: this idea of like keeping a little remnant of the
Speaker 5: past alive, either in a design feature or terminology I
Speaker 5: think applies here.
Speaker 2: Let's let's change it up, Ben, what I'm gonna pitch
Speaker 2: this to you? Ready? What if it's how many Porsche
Speaker 2: nine elevens? It is? So like? He would be like
Speaker 2: point one four port nine elevens.
Speaker 3: Rate America will love that.
Speaker 5: Explosions explosive this card.
Speaker 3: You can fit so many nine eleven.
Speaker 2: No, no, I was just trying to think of Okay,
Speaker 2: how about mustangs. How about instead of horse powers, it's
Speaker 2: a specifically Mustang, but it's a but it's enough Broncos Mustangs.
Speaker 2: It's like a standard Mustang. It's not a g T.
Speaker 2: It's just a Mustang. And that's your your rate of Like,
Speaker 2: I don't think so is Porsche a horse that's a
Speaker 2: new search term for me in our.
Speaker 5: Search history again, I think no, But there are a
Speaker 5: lot of car brands named after named after Hosses.
Speaker 2: The animal on the logo was a horse.
Speaker 4: Well sure, yeah, because you wanted to popularize and normalize
Speaker 4: the idea of an internal combustion engine.
Speaker 3: Right there you go, you know, and.
Speaker 4: Hit the market of people who could maybe afford a car,
Speaker 4: but probably couldn't afford a horse ranch. Anyway, that's a
Speaker 4: little ridiculous history. In twenty twenty two, just two years ago, now,
Speaker 4: the trucking industry in the United States did how was
Speaker 4: this even a real number? They did nine hundred and
Speaker 4: forty point eight billion US dollars in gross freight revenue.
Speaker 4: Not the same thing as profit, but that is so
Speaker 4: much money.
Speaker 2: That's all the money that went through the system to
Speaker 2: get stuff to other places.
Speaker 4: And as for where that money ended up, you know,
Speaker 4: that's part of tonight's question.
Speaker 5: We ended up Vegas, baby, where it goes?
Speaker 6: Yeah, I doesn't mean it built Vegas, you know, sure again,
Speaker 6: there's no question.
Speaker 4: Yeah, and there are you know, there are three point
Speaker 4: five million truck drivers in the United States alone. That's
Speaker 4: that counts employees of larger interest and it counts a
Speaker 4: lot of self employed drivers, you know, owner operators, and
Speaker 4: the numbers get even weirder when we look at the
Speaker 4: global scale. I think, okay, I think we're all surprised
Speaker 4: to find that this industry, despite the pandemic, has still
Speaker 4: been growing. Overall. It's growing at a rate of three
Speaker 4: point four percent per year until twenty fifty or so.
Speaker 4: And this means is where we have to introduce one
Speaker 4: metric not to get two into the weeds. But the
Speaker 4: boffins generally measure this stuff and what they call ton kilometers,
Speaker 4: which is how much money does it take to move
Speaker 4: a thing one kilometer to move a ton of a thing,
Speaker 4: whatever that thing will be, how much does that cost?
Speaker 4: And right now we're seeing that trend grow through. In
Speaker 4: twenty fifteen, one hundred and eight trillion ton kilometers moved
Speaker 4: through the world, and it just keeps growing. Most of
Speaker 4: it still happens by sea. And yes, folks, for the
Speaker 4: twelve people in the crowd wondering, you can travel as
Speaker 4: a civilian on a cargo ship, which'd be a very
Speaker 4: cool thing.
Speaker 2: Yeah, congratulations to you for choosing to do that.
Speaker 3: Congratulations to your schedule.
Speaker 2: It's nuts.
Speaker 3: Yeah, they're like we.
Speaker 4: Can get you to where you want to be within
Speaker 4: about three months, so when you want to be there.
Speaker 2: Yes, But as we talked about, part of this whole
Speaker 2: logistics thing and being what we're going to talk about here,
Speaker 2: this broker thing that's mythical, a morphous thing that we're
Speaker 2: talking about. It is about getting that freight usually across
Speaker 2: the sea or the ocean, as you're talking about ben
Speaker 2: to a hub, a port somewhere. Then it's got to
Speaker 2: go from there, and how does it get from there
Speaker 2: to the next place, and then how does it get
Speaker 2: from the distribution center to the end user. It's all
Speaker 2: of that stuff. And as you said before too, I
Speaker 2: never thought of about this until a friend of mine
Speaker 2: who was one of these people that we're talking about,
Speaker 2: freight broker was almost said froat breaker, but he kind
Speaker 2: of gave me some insight on this thing. And I
Speaker 2: didn't think about the raw materials that you'll see on
Speaker 2: like a train, like the coal train cars that we'll
Speaker 2: see right and by in Atlanta at least we'll see
Speaker 2: that a lot and other just raw materials that end
Speaker 2: up getting moved like this through a broker system.
Speaker 4: Oh yeah, dangerous chemicals, yes, Matt being a whole other
Speaker 4: bag of badgers exactly. We know that the global freight
Speaker 4: demand will apparently triple by twenty fifty. As you might
Speaker 4: imagine to Noel and Matt's earlier points, this becomes cartoonishly complicated.
Speaker 4: How do you like, Okay, there are billions of things moving?
Speaker 4: How do you figure out the best way to get
Speaker 4: your one thing from its origin point to another point
Speaker 4: without getting damaged while avoiding danger and delays and mistakes.
Speaker 4: That is where freight brokers come in. They are the
Speaker 4: fixers of the international it's redundant to say international global,
Speaker 4: but they're the fixers of the human trade system exactly.
Speaker 2: And it's really important to think that they are working
Speaker 2: on behalf of the person attempting to sell the thing, right,
Speaker 2: whatever the product is, they're working on that person or
Speaker 2: company's behalf. And that's where it gets really tricky and
Speaker 2: in the weeds, because they're trying to get a good
Speaker 2: deal for that person, but they're also trying to make
Speaker 2: money for themselves because they're in a middle position there
Speaker 2: between a buyer and a seller, right, so they they're
Speaker 2: money is going to come somewhere off the top from
Speaker 2: that transaction. Uh, and that's where that's why it's I
Speaker 2: think that's why it's such an interesting thing to discuss
Speaker 2: on this show because the motivation to make that, to
Speaker 2: skim that part off the top, and how much you
Speaker 2: get to skim per transaction it can it can be
Speaker 2: a real uh what what we say, attempting thing to
Speaker 2: maybe goose a little.
Speaker 4: Yeah, the vigorous right, they exist in that liminal space.
Speaker 5: Yeah, and Yetta, you know, you always hear about it
Speaker 5: in the modern day of like apps for everything and
Speaker 5: trying to sell things directly the consumer more frequently, you're
Speaker 5: always hearing lines about removing the middle man. Let's get
Speaker 5: rid of the middle man, sell directly to you. It
Speaker 5: does feel like this idea of these go betweens, whether
Speaker 5: it be you know, even like in criminal activities you
Speaker 5: got the fence, right, the fence is the guy who
Speaker 5: sells the goods for you that are stolen. In regular
Speaker 5: legitimate business, you've got these brokers in these middle member.
Speaker 5: Is it kind of an anti equated formula? Is it
Speaker 5: still around because there are too many people that have
Speaker 5: things to gain to see the system maybe change to
Speaker 5: something more efficient.
Speaker 4: That's a great question, and it is the free brokerage
Speaker 4: industry is the result of technological innovation. It's also the
Speaker 4: result of increasing complication in a system. It is the
Speaker 4: result of people wanting to genuinely avoid organizational headaches. Let's
Speaker 4: find some folks to specialize in the best possible route,
Speaker 4: the best possible deal, and if they make it convenient enough,
Speaker 4: then we will pay them to do so. And then
Speaker 4: on the flip side of that, if we transport stuff
Speaker 4: for these freight brokers, right, if we're on the other
Speaker 4: side of the equation and we're moving product for them,
Speaker 4: they get their vigoroush they get their skim, and then
Speaker 4: event theoretically we the carriers get paid. However, that's where
Speaker 4: some problems arise. Before we continue, Uh, let's just say
Speaker 4: the following. Let's explain what a freight broker does and
Speaker 4: who oversees freight brokers in the United States.
Speaker 5: So, in general, brokers and forwarders both gather all of
Speaker 5: the pertinent information that they need about of given shipment.
Speaker 5: Then they go into their systems to figure out the
Speaker 5: best scheduling, confirming exact pickup and delivery times. And as
Speaker 5: long as everything goes according to the plan, this, you know,
Speaker 5: really does help I mean the word logistics kind of
Speaker 5: says it all right.
Speaker 2: Yeah, And the big part of that is that when
Speaker 2: when a broker receives a request right to to apply
Speaker 2: their logistics knowledge and find somebody who is going to
Speaker 2: ship their stuff, they put out almost like I'm trying
Speaker 2: I was trying to think of one to one guys.
Speaker 2: But it's a bit system. So the individual companies that
Speaker 2: have a fleet of trucks that can actually ship stuff
Speaker 2: like that or have you know, ships, boats, rail whatever
Speaker 2: it is, they then bid on they bid for the
Speaker 2: right to ship that thing, right because they're going to
Speaker 2: make money doing it as part of their service. That's
Speaker 2: what it is as a service industry. But it could
Speaker 2: be too expensive, it could not match up with the
Speaker 2: timing of their other shipments. You know, there's all these things.
Speaker 2: That's why a broker is important because they're the go
Speaker 2: between and the company that's selling in the company that's
Speaker 2: running it. They don't have to do all of the
Speaker 2: let's say logistics, they don't have to run through all
Speaker 2: those things. They can just say here are our openings
Speaker 2: as a shipper, here's the stuff coming in as this
Speaker 2: company ship trying to ship things, and here here's what
Speaker 2: we can provide to you as what a freight shipping company.
Speaker 4: Yeah, as a subcontractor, Yes, exactly this Matroshkadal of Services
Speaker 4: and Industry loves a subcontractor a specialization. So just quick
Speaker 4: made up mocktail math here. Let's say you are a broker.
Speaker 4: You are going to get a lump sum price fifteen
Speaker 4: hundred bucks to move a thing, right, the numbers are
Speaker 4: usually much higher, but you're game fifteen hundred bucks. So
Speaker 4: what you want to do is maximize your slice of
Speaker 4: that pie such that maybe you find somebody who will
Speaker 4: take stuff from Poughkeepsie to Albuquerque and they'll just do
Speaker 4: it for a percentage of that. They'll do it for
Speaker 4: a grand and then as long as you can keep
Speaker 4: up with the paperwork and make sure everything's above board,
Speaker 4: you walk away with five hundred bucks. This is generally
Speaker 4: the ideal way that it works.
Speaker 7: Well.
Speaker 2: Yeah, and there's a lot of undercutting that can occur, right,
Speaker 2: and then we're going to get in that when we
Speaker 2: get into some of the potentials for bad actors.
Speaker 4: And in these United States, the authority in charge of
Speaker 4: supervising this strange relationship is the super sexually named Federal
Speaker 4: Motor Carrier Safety Administration or folks. We'll see that brokers
Speaker 4: and another related field, freight forwarders. They play a crucial
Speaker 4: role in this unending game of logistics. But depending upon
Speaker 4: whom you ask, some of these folks may be up
Speaker 4: to no good. A lot of them seem to have
Speaker 4: gone bust in recent years as well. So our question
Speaker 4: what on earth is going on? Pause for a word
Speaker 4: from our sponsors. Here's where it gets crazy. So why
Speaker 4: did all these freight brokers get into such financial hot
Speaker 4: water in recent years? It looks like there were a
Speaker 4: number of interrelated factors, obviously the elephant in the room
Speaker 4: being a global pandemic that continues today. But also they
Speaker 4: had a crazy amount of growth, like a cartoonish amount
Speaker 4: of growth. I don't know about you, guys, but I
Speaker 4: was surprised to learn how recent freight brokerage was and
Speaker 4: how quickly it has grown.
Speaker 5: I guess maybe that's where my confusion was coming in,
Speaker 5: because it felt to me like a lot of this stuff.
Speaker 5: In the past, there would have been a department, you know,
Speaker 5: for various companies that would have handled this level of logistics.
Speaker 2: Well, think about the major huge manufacturers and sellers of
Speaker 2: goods that have grown since the year two thousand. So
Speaker 2: over the course of twenty four years, some of the
Speaker 2: biggest companies you can think of were not nearly as
Speaker 2: big as they were in the year two thousand. Sure, right,
Speaker 2: And as these huge companies build and build and build,
Speaker 2: and as more and more manufacturers exist, I think having
Speaker 2: that middle person, that middleman thing, so you don't have
Speaker 2: to have an internal department that does all of that stuff.
Speaker 2: You're just kind of getting it done, which is a
Speaker 2: bit weird to me because it feels like the bottom
Speaker 2: you would save a lot on the bottom line if
Speaker 2: you were doing direct shipping with some partner or something.
Speaker 6: That's what I was wondering about.
Speaker 4: A lot of the big dogs created their in house
Speaker 4: stuff and then they spun it out as a logistics
Speaker 4: service to other people because it was such a profit center.
Speaker 4: It kind of reminds me of since we've got our
Speaker 4: car stuff hats on this evening, it kind of reminds
Speaker 4: me of how Michelin, the tire manufacturer, became in charge
Speaker 4: of what constitutes a good restaurant.
Speaker 5: Yeah, just just from being first to market once again,
Speaker 5: they just figured it was a good promotion and they started,
Speaker 5: you know, doing these kind of little guides that they
Speaker 5: would pass out for travelers to sell tires.
Speaker 6: And the next thing, you know.
Speaker 5: They've been the oldest running game in town as far
Speaker 5: as like, you know, pointing out points of interest in
Speaker 5: good restaurants and stuff. I know this is sort of
Speaker 5: outside the scope of this episode, but I did just
Speaker 5: want to bring up or ask, we're not really talking
Speaker 5: about Amazon today because it is kind of its own
Speaker 5: universe in many ways. I was even just looking up
Speaker 5: freight you know, brokers, and one of the first links
Speaker 5: that came up was Amazon has their own kind of
Speaker 5: freight brokerage like Wing. And I was going to ask, maybe,
Speaker 5: at least for the purposes of this conversation, do they
Speaker 5: still use the same kind of like freight means of
Speaker 5: freight that other companies use or are they so big
Speaker 5: that they almost like have their own special fleets even
Speaker 5: in the larger, you know, bulk kind of area of shipping.
Speaker 4: It's a great question. I want to be careful how
Speaker 4: we answer this.
Speaker 3: One of the.
Speaker 4: Probably the most accurate way to put it is that
Speaker 4: an entity of Amazon's size will always attempt vertical and
Speaker 4: horizontal integration. To and beyond the letter of the law. Right,
Speaker 4: So they were.
Speaker 2: Talking yet circular integration, right exactly.
Speaker 6: Three DH y'all. No, I mean, I mean it's true.
Speaker 5: You know, I'm sure there are certain industries and types
Speaker 5: of products that they do business with or you know,
Speaker 5: large suppliers where they do have to go through those
Speaker 5: more traditional channels. But any chance they get, they're gonna
Speaker 5: circumvent that as well in favor of their own owned
Speaker 5: and operated stuff.
Speaker 4: Henry Ford was so pissed about having about having to
Speaker 4: buy rubber from other companies that he started an ill
Speaker 4: fated outpost in Brazil, which kind of continues today just
Speaker 4: to make rubber. So like, corporate greed is anything but original.
Speaker 4: I think it's also this was hand over fist money.
Speaker 4: This was I think the technical economist term would be
Speaker 4: stupid money. This is like, of course, like Uber has
Speaker 4: a freight arm still Amazon of course once won because
Speaker 4: they're saving money every time they take stuff in house
Speaker 4: and freight brokerage industries. At first, like they were six
Speaker 4: percent of trucking, as we said in two thousand, you
Speaker 4: could call him a cottage industry. Just a year ago
Speaker 4: they were twenty percent of all trucking freight. This is
Speaker 4: bonker's money.
Speaker 2: Yeah, and it's just it's going to people that are
Speaker 2: that have really good software and connections, right.
Speaker 3: Deep bilodexes, that's what it is.
Speaker 2: Gosh, it's so interesting. Again. We have a few friends
Speaker 2: of the show and of our lives that have done
Speaker 2: this before. And I would say one of my friends
Speaker 2: in particular, made the most money he's ever made. And
Speaker 2: he has degrees and he's extremely intelligent, and he just
Speaker 2: went and made bank for several years and then just
Speaker 2: kind of stopped working for a while after being a
Speaker 2: freight broker.
Speaker 6: Yeah.
Speaker 3: Yeah, it happens.
Speaker 4: And that is not this enterprise like finding the opportunity
Speaker 4: in the complex logistics involved. This is not inherently a
Speaker 4: bad thing. We can argue it is a necessary thing.
Speaker 2: Yeah, and it could be great. I'd love to retire
Speaker 2: after work in like four years.
Speaker 3: We have to keep doing our show, though, I do
Speaker 3: just say it. Wow, yeah, yeah, I think.
Speaker 6: Man.
Speaker 4: Well, we know also that a great like if we
Speaker 4: were to trace the origin point of the freight broker
Speaker 4: industry in the US, it would go all the way
Speaker 4: back to deregulation in nineteen eighty and a lot of times.
Speaker 4: When people hear the phrase deregulation, because it's been weaponized,
Speaker 4: we associate it with corrupt politicians. Right, it may surprise
Speaker 4: some of us to learn that this deregulation was championed
Speaker 4: by more of the political left wing, and this idea
Speaker 4: removing it, removing the industry from the supervision of the
Speaker 4: Interstate Commerce Commission, which had run things since nineteen thirty five.
Speaker 4: Removing it made things much more competitive. It led to
Speaker 4: more reliable shipping, It led to lower prices for consumers.
Speaker 4: And yeah, some businesses went under, good businesses, but other
Speaker 4: businesses sprang up in their wake, just like trying to
Speaker 4: kill a hydra, you know what I mean, the money moves.
Speaker 2: Oh yeah, Well, it's theoretically a way to break up
Speaker 2: some organized crime, right that become these monolithic things that
Speaker 2: were in place for a long time, that could just
Speaker 2: control it and that's it, And doesn't matter how many
Speaker 2: other trucking businesses there are out there. You're never going
Speaker 2: to get a piece of pie because it's already baked in.
Speaker 2: So I mean, I could see why there was motivation
Speaker 2: to break out from that older system.
Speaker 4: Oh yeah, yeah, because otherwise you're going up against totally
Speaker 4: legitimate truck is out of Jersey. You know, no questions asked,
Speaker 4: no questions answered. That's I guarantee, that's funny.
Speaker 6: There's a sketch on old school sidel called.
Speaker 5: Jay Z Guy, and I can't remember what it was.
Speaker 5: I think it was, you know, it was on a
Speaker 5: Curb your Enthusiasm. Larry was talking about jay Z Guide
Speaker 5: to this dude from Jersey and he goes, yeah, we
Speaker 5: over in Jersey didn't really care for that sketch very much.
Speaker 3: Right.
Speaker 4: This also shows us there were levels of growth. So
Speaker 4: the growth of the industry in terms of number of
Speaker 4: companies or individuals working as freight brokers, that growth exploded,
Speaker 4: but also the nature of what a freight broker does exploded.
Speaker 4: It grew in step because back in the day, freight
Speaker 4: brokers were kind of like the last resort for shipping.
Speaker 4: There was someone who couldn't make money through their usual routes,
Speaker 4: and they literally called some guy or some group who
Speaker 4: was like, I will find I know a dude named Darren.
Speaker 4: He's probably already driving out to Seattle. So we're gonna
Speaker 4: get Darren to take this load of stuff, and you
Speaker 4: owe me money.
Speaker 2: Well, yeah, because think about it. You're losing money. If
Speaker 2: you're the person make manufacturing or shipping the stuff initially
Speaker 2: and you go to a broker, they are definitely taking
Speaker 2: stuff off the top. That's the nature of the business, right, Well,
Speaker 2: not definitely, okay, not definitely, but probably most likely you
Speaker 2: are going to be paying more to go that route.
Speaker 2: So it doesn't maybe objectively it doesn't seem to make
Speaker 2: that much sense until you think about time as a
Speaker 2: as an expense, right, or as something you have to
Speaker 2: factor into the price. And especially, as you said, Ben,
Speaker 2: if you don't have that internal system already in place,
Speaker 2: or those relationships in place, then why not just okay,
Speaker 2: this is part of our business plan. We use brokers.
Speaker 4: It's kind of the thing where you start the day
Speaker 4: wanting to make ten dollars and then you know you
Speaker 4: need to make six dollars. So if you can get
Speaker 4: a deal that nets use seven bucks, then you have
Speaker 4: to do it.
Speaker 3: Yep, which might sound boring.
Speaker 4: I know we're being very loose with the math, but
Speaker 4: in essence, that is the calculus.
Speaker 6: I mean.
Speaker 4: Also, when these things started to go belly up, it
Speaker 4: affected the world in a butterfly, what's the name of
Speaker 4: that butterfly effect.
Speaker 6: You kind of got it in the resort A butterfly.
Speaker 2: What's that thing?
Speaker 3: So it's amazing.
Speaker 6: I love it. You got there, buddy.
Speaker 3: Thanks man. Still learning this language.
Speaker 4: But we know that there were widespread consequences for all
Speaker 4: of the world's global trade when freight brokers, when these
Speaker 4: great sort of fixers of money and relationship, when they
Speaker 4: ran into problems. It affected everything beyond the semi trucks,
Speaker 4: beyond the tractor trailers. It affected the cargo ships, It
Speaker 4: affected the air freight, It affected you know, even even
Speaker 4: those weird dudes on those motorbikes. To be honest with you, well.
Speaker 5: I guess that's one of my questions too, Ben. Is
Speaker 5: all of this stuff in the same logistical network, Like
Speaker 5: do they take into account ships and air freight or
Speaker 5: are there like webs within webs of all of this
Speaker 5: kind of stuff. Are there freight brokers per medium of transport?
Speaker 4: Yeah, yeah, there are specializations. Just like some freight companies
Speaker 4: or freight carriers will say we primarily have flatbed trucks.
Speaker 4: We carry stuff that would go on a flatbed. There'll
Speaker 4: be freight brokers who say, well, we make deals for
Speaker 4: the cargo chips.
Speaker 3: You know what I mean.
Speaker 2: My friend I keep talking about was primarily reil. So
Speaker 2: like trains, rail rail is huge.
Speaker 4: Yeah, And because of these consequences, these knock on, these
Speaker 4: ripple effects, a lot of people who maybe didn't expect
Speaker 4: to get hit got smacked pretty hard. These broker companies,
Speaker 4: we'll talk about this in just a second, they became insolvent,
Speaker 4: which meant that they The way their billing cycle works
Speaker 4: is that the carrier will send an invoice after doing
Speaker 4: the work, right after delivering the thing and driving it
Speaker 4: or transporting it all the way over, and then the
Speaker 4: carrier will have a window of time in which they
Speaker 4: will pay their invoice. They will make good on the
Speaker 4: work and the compensation. But when the brokers go belly up,
Speaker 4: who gets left holding the bag? You know, how do
Speaker 4: these peopleeople get paid? If you are if like if
Speaker 4: we went into stuff, they don't want you to freight
Speaker 4: or whatever, and we all had a you know, trucks
Speaker 4: that we're moving stuff.
Speaker 3: On and stuff.
Speaker 2: They don't want you to ship stuff.
Speaker 4: They want you to ship there is thank you, yes
Speaker 4: that one. If we did that and a broker that
Speaker 4: we had worked with went bankrupt, then they would do
Speaker 4: so before we got paid, and if we were to
Speaker 4: achieve the compensation to be as the teamsters would say,
Speaker 4: made whole, then we would have to go through this
Speaker 4: byzantine level of bureaucracy. It's stupid, especially considering that every
Speaker 4: moment we're doing that paperwork instead of moving other stuff,
Speaker 4: we're losing money.
Speaker 3: We're paying to get paid at that point, weird.
Speaker 2: I just imagined taxes as like paying to get paid.
Speaker 2: I don't know why that's shot in my.
Speaker 3: Mind, because that's absolutely correct.
Speaker 5: It's also kind of like what, yeah, that's part of it.
Speaker 5: Or also not to mention like bank fees or if
Speaker 5: you ever like, oh, let me transfer my Venmo balance
Speaker 5: to my bank account, well you can do it.
Speaker 3: Today for a dollar ninety nine a wait four.
Speaker 6: To six businesses. Hey guys, here's the trick, though.
Speaker 5: It always happens instantly whether you pay or not. Just
Speaker 5: like wait and save on Uber, it's all a trick.
Speaker 5: If you do wait and save nine times out of ten,
Speaker 5: it comes just as quick as as the regular one
Speaker 5: that's twice as expensive.
Speaker 2: Can we do a whole episode on those specific fees
Speaker 2: like transaction fees or something, Yeah.
Speaker 3: Let's do it.
Speaker 4: Yeah, let's do that, because that is rent seeking, right. Also,
Speaker 4: I love that you're giving these tips, these life tips
Speaker 4: to sorry life hack tips.
Speaker 3: No, they're true.
Speaker 6: I agree with you.
Speaker 4: Also, Also, folks, if you are a fellow cheapskate, the
Speaker 4: secret with ride share apps is to open it, put
Speaker 4: in the address, and then close the app for five
Speaker 4: minutes and then open it back up. Well, I'm thinking
Speaker 4: about it.
Speaker 5: Well, yeah, even if that's an illusion or a placebo effect,
Speaker 5: it certainly will make you less on edge. But I
Speaker 5: think to your point, Ben, if it knows you're looking
Speaker 5: at it, doesn't they game you a little bit and
Speaker 5: show you some stuff and kind of string you along
Speaker 5: in a certain way.
Speaker 4: Yeah, this is all part of again, this crazy system
Speaker 4: of logistics that humans have built. The shipping industry overall
Speaker 4: is in a crisis point. You know, if you are
Speaker 4: an owner operator in the freight industry right now, you
Speaker 4: know full well that costs have gone up, margins of
Speaker 4: profit have gone down. Automation is becoming increasingly expected and normalized.
Speaker 4: So a lot of people in the industry are going
Speaker 4: to lose their jobs to so called artificial intelligence.
Speaker 5: Isn't this a system though, that is sort of built
Speaker 5: on antiquated infrastructure, Like a lot of these like legacy
Speaker 5: shipping and receiving kind of companies, freight companies whatever, they've
Speaker 5: got these fleets that are kind of aging, so they're
Speaker 5: not buying brand new whatever vehicles that are outfitted with
Speaker 5: the latest technology or the latest like tracking or what.
Speaker 5: I'm sure you can install things, but I would imagine
Speaker 5: in the same way that certain airlines you know, are
Speaker 5: dealing with kind of aged fleets, that a lot of
Speaker 5: this stuff is limited by those factors.
Speaker 2: Yeah, I mean, how do you get all of those
Speaker 2: disparate Boeing parts from all those different factories to that
Speaker 2: one place to put them all together and slam all
Speaker 2: the pieces in there that don't fit just.
Speaker 5: Jam in there like an ill fitting puzzle piece.
Speaker 4: Yeah, but we are not spending money on parachutes.
Speaker 2: No, we will not never have Well I get I
Speaker 2: have thirty thousand feet or whatever.
Speaker 3: Yeah, I got with that attitude.
Speaker 5: Remember if it was a land Tunes gag, but it
Speaker 5: was this idea of the parachute and it's actually just
Speaker 5: filled with like cutlery and like picknick stuff. You know,
Speaker 5: that's it there too. Just throw all the leftover forks
Speaker 5: in there will be fine.
Speaker 2: I would love it if every passenger on an American
Speaker 2: Airlines flight gets their own rocket suit capable of taking
Speaker 2: you all the way to the ground from forty thousand four.
Speaker 5: Wait a minute, the one we need the plane for
Speaker 5: if we got the rocket suits.
Speaker 2: Matt, Well, I guess that's true. I think it's more
Speaker 2: of the I'm imagining the suit that you could do.
Speaker 2: What's the high jump that has been achieved, I don't know,
Speaker 2: make a decade ago or somebody. Yeah, and they just dropped,
Speaker 2: but they had to have a specialized suit with oxygen
Speaker 2: and everything to do. Yes, it's one of those.
Speaker 4: Well, also, the real answer put plane. We can't have
Speaker 4: parachutes on commercial aircraft because it is statistically inevitable that
Speaker 4: some dumbass will try to open the parachute course in
Speaker 4: the place.
Speaker 5: Yeah, and that's bad luck.
Speaker 3: It might be us. You might be the one two years.
Speaker 6: It's way worse than opening an umbrella indoors. Yeah.
Speaker 2: I just got an image of you know those planes
Speaker 2: that do the paro or parabola, what is it parabolic
Speaker 2: flight that caused you to have the almost.
Speaker 3: Or near zero G Yeah, yeah, yeah, yeah.
Speaker 2: I'm imagining a bunch of airbags on one of those
Speaker 2: that get deployed at once while they're like mid.
Speaker 5: Just well, you guys, all this talk of like, you know,
Speaker 5: contingency rocket suits really reminds me of this kind of
Speaker 5: easter eggy thing. And I want to say it's fallout
Speaker 5: New Vegas where you come to a point. I believe
Speaker 5: it's in one of the DLCs where there are just
Speaker 5: these like weird super soldiers that are clearly skeletons and
Speaker 5: like they just have like exposed skulls under these helmets.
Speaker 5: And what it is was a technology that if a
Speaker 5: soldier was injured, the suit came to life and just
Speaker 5: walked them home. But then the suit's malfunctioned, and then
Speaker 5: eventually the soldiers just died of natural causes from being
Speaker 5: walked around. And then now they're just being their corpses
Speaker 5: being walked around inside these suits.
Speaker 6: So I'm picturing a.
Speaker 5: Potential problem with a bunch of like you know, emaciated
Speaker 5: skeleton flying around space in these rocket suits.
Speaker 3: Love it.
Speaker 2: I'm sorry we went this far, guys, as much.
Speaker 4: It close to mine the earlier thought experiment of the
Speaker 4: dead Internet theory. Oh yeah, a haunted house automation continues, robots,
Speaker 4: and so there are still brokers that remain. If you
Speaker 4: are listening to this and you work in a freight brokerage,
Speaker 4: we have your back. We understand that there's a lot
Speaker 4: of difficulty. There's a lot of sensitivity, as Corporate America
Speaker 4: would say, in the industry right now. And of the
Speaker 4: brokerages that remain, several have been allegedly involved in crime,
Speaker 4: both as victims and perhaps as perpetrators. We're going to
Speaker 4: take a break for word from our sponsors and we'll
Speaker 4: get into some examples. All right, There are too many
Speaker 4: examples to name, but maybe it'll be helpful to walk
Speaker 4: through a few of them so people can get the
Speaker 4: non truckers in the crowd can get the sense of
Speaker 4: the gravity.
Speaker 6: Here.
Speaker 2: Oh, here's one from that same website we mentioned before,
Speaker 2: Freight Waves Wave s. This is a company out of
Speaker 2: Texas that had some bad luck with gambling machines.
Speaker 6: Yeah.
Speaker 4: I also like that you say bad luck with gambling
Speaker 4: machines is nice.
Speaker 5: Even if your luck out once, it's it's not gonna
Speaker 5: last forever. Speaking from experience, No, it's true. It was
Speaker 5: video poker machines, specifically in twenty twenty three, a guy
Speaker 5: by the name of Dennis Martin's, the CEO of sel
Speaker 5: Supply Chain Solutions also Selsks, Yeah sc sounds Selks of
Speaker 5: Fort Worth, Texas, announced a bit of a going out
Speaker 5: of business sale.
Speaker 6: He had a terrible year, really bad.
Speaker 5: Started off with a seven hundred K purchase of a
Speaker 5: load of video poker machines that.
Speaker 6: Were stolen in Vegas.
Speaker 5: That is a layer of irony that I find delightful
Speaker 5: and maybe ironic isn't the right word, but I don't know.
Speaker 5: Doing a heist of machines that are intended to hoist
Speaker 5: the money from, you know, kind of rubes. I think
Speaker 5: it's pretty funny, poetic justice perhaps. Then Martin said, everything
Speaker 5: just went downhill from there, and I do want to
Speaker 5: take this as an opportunity to make sure everyone is clear.
Speaker 5: I'm clearing this up for myself. Going downhill from here
Speaker 5: is bad.
Speaker 6: It's bad.
Speaker 5: Oh. I sometimes get it confused. Well, if it's downhill,
Speaker 5: doesn't that mean it's easy, breezy, you know, uphill? It
Speaker 5: seems like it would be bad. That would be hard
Speaker 5: if it's all uphill. But no, maybe I don't know.
Speaker 5: Maybe it's up to the interpreter. But yeah, bad times
Speaker 5: ahead on. This is him speaking, by the way, I
Speaker 5: would describe this year as being the year of fraud, theft,
Speaker 5: and abuse, starting out with that seven hundred thousand dollars
Speaker 5: load stolen. Then insurance goes up and costs go up.
Speaker 5: After a solid year in twenty twenty two where we
Speaker 5: generated sixty four million dollars in gross revenue, we lost
Speaker 5: forty percent of our business this year for whatever reason.
Speaker 6: I like that, he said, for whatever reason. We got
Speaker 6: to know the reasons, at least some of them.
Speaker 2: But well, yeah, if you're if you're okay, just imagine
Speaker 2: that scenario, right. The seller trusts you to make this
Speaker 2: deal work, and it's going to be a good deal.
Speaker 2: So your goods actually get shipped to the endpoint right,
Speaker 2: and then everybody gets to make money. But if somebody
Speaker 2: steals all the stuff that you were kind of tasked
Speaker 2: with getting from point A to point B, nobody gets paid.
Speaker 5: Uh, And I guess there's shipment of that scale that
Speaker 5: could cause a ripple effect, right, I mean.
Speaker 6: Yes, it is ensured.
Speaker 3: We all know that.
Speaker 5: We always hear the justification of oh, bank robbery is
Speaker 5: no big deal, or these kind of highest to No
Speaker 5: big deal because everyone's got good insurance. But what happens
Speaker 5: when you actually have to make a claim like that
Speaker 5: of that amount the rates code through the roof, and
Speaker 5: that can affect people downstream as well.
Speaker 2: What about when word gets out, oh, don't use selks.
Speaker 2: You heard about them gambling machines.
Speaker 4: Right exactly, Someone's like, yeah, that's not a gamble I
Speaker 4: want to take. But also if the insurance works, you know,
Speaker 4: privatized insurance is an amazing grift ethics aside. It's one
Speaker 4: of the few products that becomes more expensive when you
Speaker 4: use it, and so like that's.
Speaker 3: I mean, that's a way to put it.
Speaker 5: And so the insurance I'm just going through a bit
Speaker 5: of an insurance like irritation right now, and I'm absolutely
Speaker 5: met up with the industry as a whole.
Speaker 4: Oh don't worry, it'll get worse. So the the the idea,
Speaker 4: you know, we see another comparison in home insurance or
Speaker 4: flood insurance in Florida. You don't have to pass a law.
Speaker 4: You simply increase the amount that it costs to play
Speaker 4: the game, and then you price people out sort of
Speaker 4: like yahowe in Gattica, they never made a law that
Speaker 4: said you have to be genetically modified. They just made
Speaker 4: it very expensive to not be genetically modified.
Speaker 6: Exactly.
Speaker 5: While we're on the subject of insurance, just really quickly,
Speaker 5: please allow me to take a micro diversion. What my
Speaker 5: situation is is, like my homeowner's insurance policy got canceled
Speaker 5: without me knowing it, because I guess I did it,
Speaker 5: like I don't know, check up on them and make
Speaker 5: sure that it like continued. And now all of a sudden,
Speaker 5: I get my mortgage and it's like way more than
Speaker 5: it was. And it's because my mortgage company signed up
Speaker 5: for an insurance policy that they chose and it's a
Speaker 5: lot more expensive than the previous one. So the moment
Speaker 5: I started looking into a new insurance policy, I literally
Speaker 5: make one phone call and fill out one form on
Speaker 5: the internet. I am flooded with fifty different calls within
Speaker 5: an hour and a half of people trying to sell
Speaker 5: me an insurance policy. And yet the company that I'd
Speaker 5: been using for a year didn't call me once to
Speaker 5: tell me they were going to cancel it. I just
Speaker 5: think the insurance industry is very confusing, perplexing, and it's
Speaker 5: a bit of a black box.
Speaker 6: And I just don't trust it.
Speaker 5: I just think it's absolutely inherently obfuscating and kind of
Speaker 5: meant to be mystifying.
Speaker 4: Yeah, by design, it's on purpose, right, because consider the
Speaker 4: way it works in so many other countries. Kid, you
Speaker 4: not folks. And this is not obviously just speaking for myself.
Speaker 4: I am a patriot of the United States. I believe
Speaker 4: in the experiment. Even though it gets a lot of
Speaker 4: things wrong. It is not unpatriotic to point out that
Speaker 4: pretty much every other developed country as we call them,
Speaker 4: is doing a better job with insurance. They're making the
Speaker 4: prime industries active. There are making less money, but the
Speaker 4: average quality of life is much higher as a result.
Speaker 4: So it goes down to what you as a government
Speaker 4: want to prioritize. Off my soapbox here, Martin, this guy,
Speaker 4: the CEO, we noted that he had to he had
Speaker 4: to fold the business, and he said he could have
Speaker 4: kept continuing if he were able to reach a financial
Speaker 4: agreement with his bank. And what we have to consider
Speaker 4: is that if you are a if you're a freight broker,
Speaker 4: in many ways, your financial cycle is like that of
Speaker 4: a farmer. You are gambling on the idea that you
Speaker 4: can accurately predict future profits and you need that liquidity,
Speaker 4: You need that money to play the game, and you
Speaker 4: start off owing money and if you don't, if you
Speaker 4: don't make your if you don't make your threshold, then
Speaker 4: you're asked out.
Speaker 5: Well, Ben, do you think that they've cracked that code
Speaker 5: or is there still a bit of throwing spaghetti at
Speaker 5: the wall? Like I just I get the sense. You know,
Speaker 5: it is all about predicting stuff. We know, there's a
Speaker 5: whole market of investment called futures, and so you're rewarded
Speaker 5: if you get it right, you know, But is there
Speaker 5: really I mean, I know the algorithms have gotten better
Speaker 5: and better and to your point of a lot of
Speaker 5: these processes being I guess enhanced or replaced by you know,
Speaker 5: machine learning. Where do we stand, Like, is are these
Speaker 5: systems pretty good or not?
Speaker 3: Stuff?
Speaker 4: Honestly, it's tough because it's not one predictive system that's evolving.
Speaker 4: There are multiple predictive systems, sometimes betting against one another,
Speaker 4: and each one is becoming more sophisticated in response to
Speaker 4: the patterns of its rivals.
Speaker 3: Right, So, like just the.
Speaker 4: Systems theory of it alone dictates that the problems we're
Speaker 4: outelining will continue you as long as there's more than
Speaker 4: one fish in the poland, which sounds a little academic.
Speaker 4: I don't know if that makes sense, but it's like
Speaker 4: everybody is becoming more sophisticated.
Speaker 2: Yeah, and I do not understand anybody out there who
Speaker 2: is a free broker. The difference between application programming interfaces
Speaker 2: and electronic data interchanges, I don't know what that is.
Speaker 2: I don't understand. I've read articles about this. An application
Speaker 2: seems the same as an electronic data exchange. I just
Speaker 2: don't get it. But innovations like that are changing how
Speaker 2: much human intervention you need, because it really does seem
Speaker 2: as though the functionality of a broker is connect A
Speaker 2: to B successfully, right, make sure all of those humans
Speaker 2: on either side of that equation are good to go
Speaker 2: with the transaction, and then that's it. And you don't
Speaker 2: have to pay an algorithm.
Speaker 4: No, I mean you have to pay the people who
Speaker 4: make it or license it.
Speaker 2: Oh my god, can you imagine? And like the big
Speaker 2: what they would call an AI broker like this is
Speaker 2: like what that's going to do, because you they would
Speaker 2: take a much smaller amount of money, probably than any
Speaker 2: human brokerage and they would just do it in bulk, right,
Speaker 2: they would make their money the way McDonald's does on
Speaker 2: their fries.
Speaker 4: M hm, we see it this way, or their real
Speaker 4: estate right. Oh, is McDonald's is a real estate company.
Speaker 2: I just mean like selling you. Yeah, maybe it's not fries.
Speaker 2: Was on the burgers. You make a tiny, tiny bit
Speaker 2: of profit on the burger. You make it somewhere else.
Speaker 2: But in this case, you've got so many burgers being
Speaker 2: sold that you're the most profitable broker ever.
Speaker 4: Yeah, like a lost leader philosophy, the strategy. Right, you
Speaker 4: sell the console for less than it takes to make
Speaker 4: the console, and you know that you will sell fifty games.
Speaker 5: Right, It's like Red Lobster and all those endless shrimp.
Speaker 5: Oh wait, no, it didn't actually work out for them
Speaker 5: here that there are a billion dollars in debt earlier.
Speaker 4: Uh, it's too close to home for a code named
Speaker 4: Doc Holliday and myself. Because I love the absurdity of
Speaker 4: I love the absurdity of Red Lobbs.
Speaker 3: No, one just always Lobster the shrimp.
Speaker 5: We gotta stop this, We gotta turn the strip.
Speaker 4: Just just have a regular day. It doesn't always have
Speaker 4: to be a festival. Sometimes it can just be Wednesday.
Speaker 2: I'm telling you, if you're listening, big Lobster out there
Speaker 2: wherever you are, big big Red, Big.
Speaker 5: Red, you're picturing the CEO Red Lobster as a giant
Speaker 5: anthropomorphic lobster in a suit.
Speaker 2: Yes, yes, just listen here, listen. This is this is
Speaker 2: your idea. You can you can get out of debt tomorrow.
Speaker 2: You scrap all of the brick and mortars that you
Speaker 2: own right now, start buying up tiny, tiny little brick
Speaker 2: and mortars in you know those uh live, laugh, love
Speaker 2: places where you like eat, work and where the apartments
Speaker 2: are and all the restaurants and all that stuff by
Speaker 2: tiny little boutique spaces. Just sell the biscuits. That's it.
Speaker 2: Nothing else, No other products. The biscuits.
Speaker 6: Baby.
Speaker 5: Well you know they sell it as a mix that
Speaker 5: you can buy at the grocery store.
Speaker 2: That's not what I'm saying. I'm saying. They got to
Speaker 2: come to you.
Speaker 6: Still, fig.
Speaker 5: There was an amazing story on the Onion many years
Speaker 5: ago where it was like cheddar Bay and desperate trouble
Speaker 5: over overfishing of biscuits or something like that. Oh no,
Speaker 5: the ecosystem of Cheddar Bay at risk overfishing of biscuits, and.
Speaker 4: Biscuit biodiversity is of course one of the key interests
Speaker 4: of stuff they'll want you, so that's why we got
Speaker 4: into this.
Speaker 2: And extra terrestrials.
Speaker 4: Yes, yeah, and supply chain story is sadly far from unique.
Speaker 4: There are multiple other cases of supply chain or freight
Speaker 4: brokerage outfits closing down or laying off tons of people,
Speaker 4: especially last year, and part of it is because a
Speaker 4: lot of other people got in the game. There was
Speaker 4: new capacity flooding the trucking industry. You could be a
Speaker 4: quote unquote freight broker and you would just be running
Speaker 4: an algorithm, right. You never leave your desk, you know,
Speaker 4: you might not even need to call the actual driver. Historically,
Speaker 4: freight brokers kept a line open from pickup to drop
Speaker 4: off or delivery. In twenty twenty three alone, we saw
Speaker 4: so many companies either closed down entirely or lay off
Speaker 4: a ton of people. There was a freight forwarder called
Speaker 4: flex Port which laid off twenty percent of its staff.
Speaker 4: Uber Freight cut three percent of their workforce. Outfit called
Speaker 4: Convoy had their ass hit the f they closed their
Speaker 4: Atlanta office. We still don't know how many people they
Speaker 4: fired in October twenty twenty three.
Speaker 2: And Convoy was huge, convoys huge. I think we had
Speaker 2: a few, I don't know, you guys. I had a few
Speaker 2: friends that ended up working at Convoy, and it was
Speaker 2: because of the boom, the all everybody shipping everything everywhere
Speaker 2: as the pandemic was occurring. They hired up like crazy.
Speaker 2: They were doing business like gangbusters, and then all of
Speaker 2: a sudden it started to slope down and they're like,
Speaker 2: oh, oh uh oh, this is It's the same thing that
Speaker 2: was happening with silks, right, same exact thing. We're making
Speaker 2: a crapload of money, but it's not enough to cash
Speaker 2: back up to that initial investment.
Speaker 4: Especially when the demand changes again. The comparison to farming
Speaker 4: is surprisingly apt because there are variables that the farmer
Speaker 4: and the freight broker simply cannot control. And it also
Speaker 4: it also makes me remember something we're far overdue for.
Speaker 4: In this episode, Paul, as you know well, one of
Speaker 4: my favorite songs is JW.
Speaker 3: McCall's Convoy. Could we play a clip.
Speaker 2: Franker on nine this year is a rubber duck? You've
Speaker 2: got a copy on me?
Speaker 6: Come on there, it is?
Speaker 3: Do you guys, remember Convoy, Yeah, Darko.
Speaker 6: There's a movie right with the kid.
Speaker 3: Yeah, there's a movie based on the all that's right.
Speaker 5: Yeah, yeah, okay, so that's what I was. I'm sorry
Speaker 5: I was getting confused there. Yeah, that's too meta. And guys,
Speaker 5: Uber frate is definitely not associated with Uber the ride
Speaker 5: share definitely is. It is, yes, but it's confusing because
Speaker 5: it says nowhere on their logistics portion anything about the
Speaker 5: ride share thing.
Speaker 6: But I swear the logo is the same.
Speaker 5: And for some reason, I thought earlier you had said
Speaker 5: not to be confused with, so I just wanted to
Speaker 5: make sure that's clear.
Speaker 4: But it is a total Yeah, they're definitely the sad
Speaker 4: as wild.
Speaker 5: And again you type in freight broker, the top two
Speaker 5: that come up or Uber Freight and Amazon and then
Speaker 5: and then you go and look into their details and
Speaker 5: they talk about all of their end to end logistical
Speaker 5: you know, proprietary algorithmic software that nobody else has.
Speaker 2: Because why why didn't we make this connection yet? And
Speaker 2: I'm sorry that I'm just doing right now. Stockbrokers the
Speaker 2: go between when somebody wants to sell a stock and
Speaker 2: somebody wants to buy a stock. It's the exact same thing.
Speaker 2: I'm thinking about Wolf of Wall Street. I'm thinking about
Speaker 2: the collapse. I think this is I'm scared, now.
Speaker 3: Get them out of here. But people, you're absolutely correct.
Speaker 5: Use stockbrokers anymore. Isn't like the idea of a stockbroker
Speaker 5: almost anachronistic, Like everyone's using.
Speaker 6: You know, h E trade or what have you. And
Speaker 6: maybe you might have a money manager.
Speaker 5: But I don't even think people call themselves stockbrokers anymore,
Speaker 5: do they?
Speaker 4: I mean, if they're on enough cocaine, all sorts of
Speaker 4: that part little Little Tootski that scene of.
Speaker 5: Wall Street when he's like he does oozy woozy whatever.
Speaker 4: Anyway, automation came for the financial markets, you know, very
Speaker 4: early on, right, So the function of a stockbroker still exists,
Speaker 4: it's simply increasingly automated, right, movie in microseconds because again,
Speaker 4: speed is very very much a priority, right when you're
Speaker 4: trying to get in front of someone in the market.
Speaker 4: And you're absolutely right, the broker thing, the weird middleman industry. Again,
Speaker 4: it's not inherently bad at all, but it is becoming
Speaker 4: increasingly complicated because of the technology that is entering the theater,
Speaker 4: you know, and there's so much money to be made.
Speaker 4: Just like with stockbrokers, freight brokers have the ability to
Speaker 4: dip into a great deal of cash, so of course
Speaker 4: there are going to be bad faith actors in this industry.
Speaker 4: It leads us to the ideas of things like freight fraud,
Speaker 4: which is I'll say there was a thing, and then
Speaker 4: I'll say it's lost, aka, stuff falls off the truck.
Speaker 4: And then there's the idea of double broker n which
Speaker 4: is like a complicated shell game of subcontracting stuff. It's like,
Speaker 4: how would we explain that and why is it bad?
Speaker 5: Well, it typically involves a fraudulent broker posing as a
Speaker 5: legitimate operator or carrier and offering to arrange kind of
Speaker 5: lays this shipping service for a customer at a discounted rate.
Speaker 5: The fraudulent broker then, I guess hires out a subcontractor
Speaker 5: for the job to another.
Speaker 6: Carrier or broker.
Speaker 5: But this is outside of the knowledge of the customer
Speaker 5: they're dealing with in the first place. So this is
Speaker 5: classic double dealing. I would argue if that expression exists,
Speaker 5: it is to describe this where I'm not being straight
Speaker 5: with you, I'm going to use you're thinking I'm the
Speaker 5: one doing the deal, and I've got someone else on
Speaker 5: the side doing it, and that's benefiting me, not you.
Speaker 5: So in this situation, the fraudulent broker subcontract that job out,
Speaker 5: as we said, the double dealer to another carrier. So
Speaker 5: then once this has happened, the fraudulent broker pockets the difference.
Speaker 5: So basically he gives himself a deal while saying the
Speaker 5: price as the X for the original customer, and then
Speaker 5: you know, pockets the difference in the in the price
Speaker 5: or the savings. It gets passed right on to him.
Speaker 4: So they don't actually do anything rather than take money
Speaker 4: and forward the email.
Speaker 3: Exactly way to think about.
Speaker 2: It, And I would speculate they do not make as
Speaker 2: much money as any legitimate broker because they can't. Right,
Speaker 2: they are paying somebody to do the actual work, but
Speaker 2: they don't.
Speaker 8: Do any of the actual work, so therefore it's all profit. Right,
Speaker 8: it's a numbers game, so it's a numbers grift. Yeah,
Speaker 8: it's a grift, and a broker. A broker is already
Speaker 8: a bit like a currency speculator. Right, we get a
Speaker 8: couple of friends of the show who have worked extensively
Speaker 8: in global currency speculation, which is again not an inherently
Speaker 8: sinister job. But you're saying, oh, the euro or the
Speaker 8: yen is at x amount versus the US dollar, So
Speaker 8: let me make a transfer switch that do a switch
Speaker 8: aoo on that stuff real quick, and then hope that
Speaker 8: circumstances change in an advantageous way. So all of a sudden,
Speaker 8: my fifteen hundred bucks that I turned into yen or whatever,
Speaker 8: now they are k tall.
Speaker 4: It doesn't matter. Now it's turned into twenty five hundred dollars. Right,
Speaker 4: It's it's interesting. People are finding the margins, they're finding
Speaker 4: that gray liminal space.
Speaker 2: And what's put it all in bitcoin?
Speaker 3: Put us all in bitcoin.
Speaker 5: Scenes Tom Brady said a lot of things.
Speaker 4: Man, Yeah, Tom Brady's got a great roast out recently,
Speaker 4: so what.
Speaker 6: I'm talking about. He regretted some of the things that
Speaker 6: he said at that.
Speaker 4: Rose And congratulations to Kevin Hart on the Mark Twain
Speaker 4: Prize for Humor. I'm just thinking of that because he
Speaker 4: I think e mc the Brady roast I'm remembering correctly anyway,
Speaker 4: So all right, it all goes back to the paperwork.
Speaker 4: If all the paperwork look legit and passes these governmental
Speaker 4: oversight systems and processes, then there's a very good chance
Speaker 4: that a nefarious or even nonexistent shipment can make it through.
Speaker 4: I'm doing air quotes so hard right now, you know,
Speaker 4: because you can just pay off the inspectors in some cases.
Speaker 2: Yeah, theoretically you could, right, It's it's kind of a
Speaker 2: long shot that you could get it to work. Right,
Speaker 2: But if you had all the paperwork, you looked like
Speaker 2: a legitimate broker and it was a bad actor on
Speaker 2: the seller's part, then the uh, you know, there's there's
Speaker 2: a huge process. By the way, if you want to
Speaker 2: look at some of this stuff, Ben, where would you
Speaker 2: say freight waves is pretty good? There are so many
Speaker 2: logistics websites that are like a part of a logistics
Speaker 2: company that are trying to be an explainer and under
Speaker 2: give you an understanding of what the company does and
Speaker 2: how it all functions. Some of it's a little self survey, yeah, yeah,
Speaker 2: a little bit. But again just this idea of it's
Speaker 2: a complicated system. You have to get through with some
Speaker 2: of the regulations with whenever you're shipping anything, right, there's
Speaker 2: supposed to be a record of exactly what is inside
Speaker 2: that truck or ship right, whatever it is inside that
Speaker 2: train car, and you're not even supposed to open that
Speaker 2: sucker until it gets to its end to location, so
Speaker 2: that there's this security and chain of custody of what
Speaker 2: actually was shipped, and there are inspectors who go through
Speaker 2: at different points that could actually catch something like this
Speaker 2: if it's let's say, AAK forty seven's instead of refrigerators
Speaker 2: or refrigerators filled with AK forty sevens like that. But
Speaker 2: what I mean is, if you've got somebody who fills
Speaker 2: everything out and everything looks above board, you probably won't
Speaker 2: ever even have an inspector go into that shipping container
Speaker 2: to look at it.
Speaker 4: Quite often, yeah, because the private industry will. It is
Speaker 4: not unusual for private industry bad faith actors to have
Speaker 4: advantages over the public industry watchdogs that are meant to
Speaker 4: keep an eye on stuff. I mean, also, this industry
Speaker 4: does have to exist. It cannot collapse. Civilization will not
Speaker 4: work without it. So again, if you are in the
Speaker 4: shipping industry, if you are a trucker, if you are
Speaker 4: a freight broker, thank you for keeping the lights on
Speaker 4: and keeping stuff running. We know that the shipping industry
Speaker 4: and freight in general overall is increasingly vulnerable to compromise.
Speaker 4: What we could really say, without hyperbole, is that the
Speaker 4: humans have built a complex system that they do not
Speaker 4: fully understand, and that same system is growing ever more
Speaker 4: sophisticated year over year. Legislation is trying to address some
Speaker 4: of these issues. It's kind of at a crisis point.
Speaker 4: There's something in the wind. We have to ask what
Speaker 4: happens next. I was surprised to find that are super
Speaker 4: sexy bureaucracy, the Federal Motor Carrier Safety Administration. They just
Speaker 4: put out a rule earlier this year to try to
Speaker 4: crack down on unscrupulous or fraudulent freight brokers.
Speaker 3: Did you guys hear about this?
Speaker 6: Do tell.
Speaker 4: That's the log and short of it. And I know
Speaker 4: we're going over time. We don't have to go with
Speaker 4: the weeds. But you can you can see this. You
Speaker 4: can find it on their website. You can find public
Speaker 4: statements about.
Speaker 5: It as unscrupulous freight brokers. Though I'll tell you that
Speaker 5: right now.
Speaker 4: Yeah, they said you got to stop ripping off these
Speaker 4: folks who are actually driving the trucks, right They because
Speaker 4: they're at a disadvantage because often they've already done the work.
Speaker 4: They've transported the thing, you know, so they have to
Speaker 4: be able to be paid for their time.
Speaker 5: It says FMSCA, but les that most brokers operate with
Speaker 5: integrity and uphold the contracts made with motor carriers and shippers. However,
Speaker 5: a minority of brokers with unscrupulous business practices can create
Speaker 5: unnecessary financial hardship for unsuspecting motor carriers. Tight, that'll fix it, right, yeah, sure,
Speaker 5: no one will figure out another more elaborate grift.
Speaker 6: That's that's harder to track.
Speaker 4: Yeah, and nobody will ever automate the legislative process, right, Oh.
Speaker 6: Jeez, can you imagine? I mean, that's the thing, would you.
Speaker 5: Well, that's a whole other conversation. I guess right, I
Speaker 5: know what you're doing that. But whatever, there are tons.
Speaker 5: It's the same with like you know, nickel and diming
Speaker 5: bank customers with these fees. Whenever there are tons of
Speaker 5: transactions taking place and a ton of things moving, a
Speaker 5: ton of products moving whatever, it's really easy for these
Speaker 5: things to go unnoticed.
Speaker 6: That's it. It's it's just a breeding ground for.
Speaker 5: This type of like kind of what a single tre
Speaker 5: actions super small time, but you add them up, it
Speaker 5: makes a lot of money for these individuals that are
Speaker 5: trying to rip.
Speaker 6: People off, and it loses a lot of money.
Speaker 5: Death by a thousand cuts kind of stuff.
Speaker 2: You know, I would just say, there is that philosophy,
Speaker 2: and is there for a reason that, Hey, I don't
Speaker 2: ask any questions. We're all making money here, just getting
Speaker 2: whatever this is to where it's supposed to go. Does
Speaker 2: that make sense? And I'm not saying that's what's happening
Speaker 2: or that's the way everybody thinks. I'm not trying to generalize.
Speaker 2: I just mean there's a reason that exists because if
Speaker 2: you don't ask questions, if you kind of just let
Speaker 2: the system run, it's highly highly profitable.
Speaker 4: Sure, yeah, as long as you're not the one left
Speaker 4: holding the bag of consequences, as long as you are
Speaker 4: at the very least the second last person. And that
Speaker 4: great game of hot potato, and we've got some We've
Speaker 4: got some cats coming in. This show is brought to
Speaker 4: you by a pnopoly of Pets. We hope your pets
Speaker 4: are well. If you are on the road right now,
Speaker 4: we want to get and thank you for your time,
Speaker 4: thank you for tuning into the show, and we want
Speaker 4: to hear your thoughts, folks, if you are a trucker,
Speaker 4: a long haul driver, a short haul driver, a hotshot driver,
Speaker 4: if you are in the shipping that's a true thing.
Speaker 4: If you are in the shipping industry at all, in
Speaker 4: any capacity, we would love to hear your strangest stories.
Speaker 4: Give us your tales of war. One thing that's always
Speaker 4: rewarding is I swear every time we ask our fellow
Speaker 4: conspiracy realist to send us tales of the strangest stuff
Speaker 4: they've seen driving in the middle of nowhere, we get
Speaker 4: these astonishing, astonishing narratives. So we'd love your take on
Speaker 4: free brokers other potential trucking conspiracies. We try to be
Speaker 4: easy to find online.
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Speaker 2: Hey, we have a phone number. You can call it
Speaker 2: right now. We would say, if you are on one
Speaker 2: of those long haul road trips in your truck, do
Speaker 2: wait a little bit of time until you maybe hit
Speaker 2: a loves or another you know, a little stop there
Speaker 2: to give us a call. Yes, that's it, just.
Speaker 7: Bullin's just just wait till you hit one of those areas,
Speaker 7: just to give us a quick call, because sometimes the
Speaker 7: road noise really is overwhelming and we just physically cannot
Speaker 7: use your message, uh, because it's just too noisy.
Speaker 3: So pilot, there we go in all right, just naming them.
Speaker 2: I just I had when I think about a truck stop,
Speaker 2: I see loves. I don't know why, that's just what
Speaker 2: I see. But yeah, do give us a call. Our
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