Freight Agent Finance: Red Flags, Margins, Taxes + AI That Actually Works

SPI Logistics CFO James Lemon joins to cut through the noise on agent and brokerage finances in a tough market. We cover the real signals your brokerage is in trouble, what healthy margins look like now, how to set up your money from day one as an agent, and where AI is actually paying off (hint: 42% of SPI invoices now auto-approve without a human).

You’ll learn:
 — The first red flag: carriers calling about late pay—what it really means for your book of business
 — How slipping “days to pay” crushes carrier trust on DAT/Truckstop and pushes you back to the spot market
 — Today’s margin reality (8–30%), why 15–18% is harder, and what to target
 — W2 vs. agent life: taxes, cash-flow risk, and the simple system to avoid the “surprise” tax bill
 — The overlooked first-year expenses (and the bare-minimum tech setup that won’t choke under load)
 — Why a 30–60 day cash cushion matters when customers and vendor onboarding drag
 — AI that’s worth it: document imaging, scheduling, and keeping a human in the loop
 — What shippers now expect: real-time visibility, API/EDI ties, and proof you’re fighting fraud
 — Conferences and ROI: how one five-minute tool can pay for the trip
 — 2026 outlook: why disruption favors prepared agents who keep relationships tight and processes sharp

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Transcript

SPEAKER_00: 0:43

Document imaging is that's the the biggest one we've had recently is starting to utilize AI for we we're up to like 42% of our all of our invoices are auto-approved by AI. A human never touches those documents, they get approved, sent to the customer, and everything goes smoothly.

SPEAKER_02: 1:09

All right, welcome into another episode of Everything Is Logistics, a podcast for the thinkers in Freedom. I'm your host, Blake Milligan, and we are proudly presented by SPI Logistics. And with us today, we have James Lemon, the CFO of SBI Logistics. And we're going to be talking about a very important topic around this time of the year and really like any time of the year, and that's financial literacy for agents and probably just brokers as a whole across the industry as we face a very challenging freight environment. And that's kind of to put it lightly because there's so many things that are affecting the current freight market. So this is the perfect opportunity to kind of get our own ducks in a line and control what we can control. And that's on the expensive side of things. And then also from a marketing and sales standpoint, because obviously SPI logistics is very good with their marketing and sales and creative outreaches and approaches. So we're going to get into all of that today. So but first, James, welcome to the show.

SPEAKER_00: 2:08

Thanks for having me. Really excited to uh be here and talk about all this fun stuff that bores the bores a lot of people, but is one of the most important things you can think about. And like you said, there's very there's very strong headwinds right now in the market and being able to ride that out and not uh be one of the uh unfortunately one of the statistics that are bound to come out of this potential freight recession is important.

SPEAKER_02: 2:37

Yeah, because I I think it's I was reading a lot of reports, especially over the last week, because a lot of movement has been made, especially on the carrier side of things, which is causing a lot of brokers to, you know, not rely, or maybe not rely, but they've been relying on the spot market. And so that's kind of you know proving to be a little bit more challenging for them and especially from geopolitical tensions and things you can't really control. But I think some of the best advice is that you can't what what's the quote? You can't control your revenue, but you can control your expenses. And so from that standpoint, I would like to just kind of sort of you know come out of the gate, uh, you know, with a I guess strong. And that is for the current market that we're in, what are some maybe red flags or green flags of that you're working for a company that is strong financially?

SPEAKER_00: 3:31

Well, I mean, the biggest thing, the the canary in the coal mine most of the times is when you start getting calls from your carriers saying they're not getting paid because the broker, they're gonna say, oh, we're having trouble with paperwork, or oh, we're having trouble with this and that, or well, we don't have an approver in house. But if it continues to happen, it's a sign of broader issues where they're trying to now stretch their payables to try and steal cash flow essentially from the future. Um, and I mean, if especially if you're an agent, an agent working for a broker and you start getting those phone calls, that's that's a sign that maybe something's happening. Your service levels might start to drop because all they're gonna have to lay off people, and then so now they don't have as many people to service all of your customers or even service you as an agent. And if you start seeing those things happening, it it's a sign that there could be a problem. And I mean, right now it's a very tight freight markets, rates are I mean, rates are supposed to come back, but they've been saying that for three years, and unfortunately, I think this just might be the new normal. So if that's the case and you're the companies are expecting it to come back or hoping it's gonna come back and it doesn't come back, there's gonna be some brokers that just all of a sudden go under because the freight market just doesn't bounce back like everybody has said it will for three years.

SPEAKER_02: 5:02

Yeah, I I I wish I would have heard that advice years ago. I I worked in-house at an asset-based brokerage, and you know, I was executive assistant, so I heard some sort of rumblings from you know, here and there. But I, you know, admittedly, I was very not strong in uh finances or even, you know, just acumen in in general. I'm I've gotten better at it with age, but I still feel like I'm I'm very much a novice. But I I do wonder, are there there probably are plenty of brokerages out there that, you know, maybe are going through this similar thing where they're having a lot of closed door meetings and you're not exactly sure. You're you're hearing from other people that you're running out of runway and you hear all these things, but you're you're saying one at one of the canaries in the coal mine is is the carriers calling and asking for for clarification on their payment terms. Is is are there any other things that maybe um would kind of signify that maybe something else is going on within this company?

SPEAKER_00: 6:01

Well, I mean, it it's it's harder when you're you're especially for agent-based, it's harder because you're not in the root, you're not in like a bullpen area where you're gonna hear, like you said, you're you're seeing a lot of closed door meetings, all of a sudden the the staff list is getting smaller and smaller, and a lot of the times if you're not like in it, you won't notice those kinds of things. Uh I it's really just I think the carrier thing is the biggest thing that for an agent that you can just watch out for. You don't because having your carrier, like that's what you're selling. You're selling, hey, we're we're gonna pay you in 30 days. And if all of a sudden you're telling the carrier that you're gonna pay them in 30 days and it's now 40 days, 45 days, 50 days, and there's no real reason for it, they're gonna stop hauling your loads for you, and then now you're going up to the spot market, but then uh all those carriers are reporting to things like DAT and all these things, and they're seeing that broker, their days to pay is starting to increase, so less and less carriers are gonna want to haul for you because they're thinking, well, I can haul for broker X and get paid in 30 days, or I can haul for you and get paid in 50 days. So why am I hauling for you when I can haul for broker X and get paid in 30 days?

SPEAKER_02: 7:15

So it almost sounds like maybe like a snowball effect that that's going on with some of these issues where it starts at that maybe 10 to 15 days and then it evolves from there.

SPEAKER_00: 7:23

Well, absolutely. And I mean, now that what technology is more and more pervasive within the industry, it's a lot easier for those metrics to get to the reporting agencies because in the past it was only like the only people you would report to is like DB, and nobody reported D and B because they're so expensive. But now we have things like Insonia and DAT and truck stop, they're all tracking days to pay, and they're all now being or incorporated into financial technology companies like Tri of Pay and all these things. So it's a lot easier for them to know this information and disseminate the information to everybody within the network where that wasn't the case in the past.

SPEAKER_02: 8:04

So, so what would you suggest to be like maybe a plan of action or controlling what you can control when you you do start seeing you know these little canaries kind of start popping up? What should you start doing? Maybe you're you're in-house or maybe you're a freight agent working for another you know company, and obviously not you know, SBI. Um, but what would you suggest that they start doing to maybe start putting their ducks in a line?

SPEAKER_00: 8:28

I mean, the easiest thing, you just ask questions, like uh call call into your support staff and say, I'm getting all these calls, what is going on? Try and see if they'll get answers. And if they're not gonna give you answers, try and go up the chain, up the chain as far as you can to try and find out what's going on. Sometimes there is a reason. Maybe they switch billing systems and they're having like it happens all the time. Everybody thinks you're gonna just flip a new technology on and it's gonna work seamlessly, and it ends up being a disaster. And yeah, sometimes that'll happen, and that's why they're not getting paid. But if they start avoiding your calls or ducking your calls, or they're giving you blanket answers that don't actually have any substance, that's a bad sign. And then maybe you start to look at other avenues for what you could do. Because I mean, in logistics, there's a job free anywhere if you want it. So it it doesn't if you're if you're getting worried, it doesn't hurt to see what else is out there. Because you never know, it could be especially if you're an employee, one day you are an employee, the next day you're not, and then if you've already done your work and done a little bit of homework, you can bounce back right onto your feet. Uh but if you're you don't, you're a little bit behind the eight ball when something like that happens.

SPEAKER_02: 9:47

Now, for uh some of my former and even uh current uh broker friends, uh anytime I mention, you know, why haven't you gone out and just you know become your own agent or or worked for a freight agency? The first question that they typically ask is somewhere around taxes, like, oh, I don't want to, I like you know, being a W-2 employee, I like, you know, not having to worry about my tax bill at the end of the year. How do you, I guess, sort of talk through those types of people when they they have that initial concern? Are taxes like a huge issue that freight agents have to be worried about and occupied with?

SPEAKER_00: 10:23

Uh, I mean, I would suggest that if you are gonna do that, you find a good accountant. And I mean, it's gonna cost you a little bit of money, but in the end, you're gonna make more as an agent than you are as a W-2 employee because you're getting a way bigger split of the of the revenue. The biggest thing is taking the risk because I mean, I I personally I could not do it. I have a fam, I have a family with young kids. I'm obviously an accountant, so I'm very risk averse. I I I couldn't not know where my next paycheck's coming from. But if you are in the sales space, odds are you're a much bigger risk taker than I am. And yes, it is scary to go out onto becoming a broker and not knowing if your customers are gonna follow you or if you're gonna have the same sales levels as you had before, and maybe your pay might go down for a little bit. But in the long run, you're gonna you have unlimited potential because now you're not capped by any ceilings, you don't have only 10% commissions because you have a salary, you make what you you you kill, or you eat what you kill. So you are out there, you can make as much money as you want, you have a good tax accountant behind you who's handling all the other things for you, so that you that's not on your mind. Because you don't want you as an agent, you don't want to be thinking about oh god, I gotta pay my taxes next week. You want your accountant to be like, hey, here's here's what you need to pay, and this is the all you have to do, and you just send them a check and you're done.

SPEAKER_02: 11:59

Yeah, I think I think it's more about avoiding also the the surprise expenses because uh especially in the first year of business that I really did well, when that tax bill comes due and you are surprised.

SPEAKER_00: 12:13

It can be a shock, it's and it's always gonna be a little bit higher than you think at first, because you think, oh yeah, my like I have all these extra expenses that I can now deduct. But when you're not paying any tax, like because you don't have it just coming straight off of your paycheck, it can be a big surprise, especially if you don't have an account that's telling you to.

SPEAKER_02: 13:27

Oh, absolutely.

SPEAKER_00: 13:28

And and in reality, like for me personally, I would be setting aside every time I got a commission check, I would send just open up a separate account that's just there for taxes. And you transfer 10, 15, 20, whatever you feel comfortable with, transfer it into an account, make sure it's a savings account so you get a little bit of interest on it, and just let it sit there. And then that way when your tax bill comes, it's not like, oh man, I gotta come up with$15,000,$20,000. It's like, oh, yeah, I have this account. Maybe you put a little bit more in there, and like, hey, now I have a bonus five thousand dollars I wasn't expecting.

SPEAKER_02: 14:04

Yeah, that that's definitely the strategy to take because when that first unexpected tax bill comes in, which I guess technically it should be expected, but it is still a a real shock when you get it and you didn't expect it. I am curious, what's the first when when someone decides to become an agent, what's the first big oh wow expense that they might see coming?

SPEAKER_00: 14:28

I mean, the biggest thing is probably just you don't realize like you you might have a laptop that you think is is good for just like surfing the internet, and then all of a sudden when it's now your primary driver of your work, it pays to have good technology and it pays to have good hardware. So you might be surprised like that$500 computer that you thought was great isn't necessarily the best when you now have like 15 different tabs open and you're talking with carriers and you're trying to look at rates here and rates there, and all of a sudden your computer's bogging down and you can't have quick decisions because you're being hurt by your hard work. You don't you don't realize these things and like when you're working because now you're probably working from home, you're gonna want to conduce some space to work, so you might spend a little bit of money on that kind of stuff. Depending obviously depends on how people work. Some people can sit at their kitchen table and just work all day, and some people need like a structured area to actually do their work. It all it really just comes down to the person and knowing how you work best and doing what you can to make yourself the most ready for going out there and just making money.

SPEAKER_02: 15:47

So you want to be thinking about getting an accountant, you want to think about you know having some some good, you know, laptop or a good desktop, a good work area to get work done. So you want to think about those two big things. And so what uh is there maybe like a savings that you should maybe be thinking about too if you're an in-house like brokerage or and you want to go independent?

SPEAKER_00: 16:09

It definitely doesn't hurt, especially because the ramp up time is always longer than you expect. You you expect your customers are just gonna like be able to come over right away every time we have a new agent or uh when we have a new agent, they come on board, they expect everything to just go smoothly, but you got all the paperwork that needs to be filled out, you got all the the the customer now needs to change all of their processes and set up because they're setting setting up a new vendor on their side too, so they got to go through all their checks and balances to make sure everything meets their criteria. So, like you said, it's it's smart to have to plan that maybe the first month you might not make any money because you're gonna be going through all the setup process. So have have a little bit of a rainy day fund so that if that does happen, you aren't all of a sudden scrambling because we've we've seen it time and time again where an agent will come on board thinking everything's gonna go smoothly, doesn't get a paycheck for three weeks and just goes back to being a W-2 employee because they were too afraid to keep going, which I don't blame them. Like I said, I could never do it myself. It takes a brave person to do it. But the ones that are successful, I like we've seen agents who were W-2 employees making good money, and then they come on board, they have a couple of hiccups at the beginning, and now they're making like a million dollars a year, which you couldn't do as an employee making a minimal commission.

SPEAKER_02: 17:41

So, what does that look like? So, say I I am bought and sold, I'm I'm ready to dive in, I'm ready to become a freight agent for SBI. Uh, what does that process, I guess, look like from a financial lens on that first sort of maybe 60 days? Is is that when you can realistically expect to be fully onboarded, have your customers onboarded, and then already move in freight within 60 days?

SPEAKER_00: 18:05

Well, I it should be a lot faster than that. I mean, in most in most cases, we can have people up and running within a week on our side. Obviously, all brokers are different, and then it also comes down to your customers. If your customers, if you're dealing with large, large companies, that onboarding process, it's kind of faster for us because they're a well-known quantity, but them onboarding us as a vendor can take more time because they have certain quality standards and everything that needs to be met. And it's a lot harder to get on the phone with people who can actually help you because they're a large corporation, so they have lots of lots of middlemen in between. So but if you're a smaller company or you have smaller customers who can onboard quickly, like yeah, you can we we've had agents who onboard and are moving loads the same day. Oh wow. It really just comes down to making sure you have everything ready to go. Like if you have customers that you're porting over from somewhere else, make sure they know what you're doing. Tell them, like, hey, just a heads up, I'm planning and tell them ahead of time. Let them know a week in advance. Like, hey, I'm planning on doing this. You're gonna be receiving some paperwork, you're gonna be receiving some new stuff. Can you help me expedite this so that we can keep our relationship going smoothly?

SPEAKER_02: 19:31

Yeah, because I would almost imagine that I would be maybe a little bit nervous about telling my customer that maybe I am moving, but then it's almost like a level of reassurance that the agent has to provide and SBI has to provide to some of these customers. Or are they, are you guys more making the sales pitch of this is going to actually be better for you as a customer to come with us on this journey versus maybe exploring other options? Is is is the sell to the customer uh that important too?

SPEAKER_00: 20:05

I I would absolutely say so because I mean it is a lot of work for them to get set up with new cut companies. And I mean, some of them won't care. And like you said, it is it is a little bit of a risk because maybe they don't know. So maybe you're working for somebody, a big brokerage, and you're going to maybe a little bit of a smaller brokerage, and they've never heard of it before. So they might have some apprehension. But the biggest thing is if you have a good relationship with your customer, they're gonna bet on you, they're not gonna bet on your broker.

SPEAKER_02: 20:36

Yeah, that makes sense. What about as far as like the current market conditions? You know, we we've been hearing about a uh you know, a freight recession for a little while. We've probably been in one for for we just haven't exactly defined it because everybody's afraid to say the word.

SPEAKER_00: 20:50

Uh but nobody wants to admit it.

unknown: 20:52

Right.

SPEAKER_02: 20:54

Well, I think once once uh like the big government entities can agree on like what an actual recession is, I think it maybe it could trickle down to other industries properly defining it as well. But I am curious, you know, when I was working in-house at a brokerage, you know, the health, healthy margins were, you know, 15 to 18%. Are those days gone? And is it, you know, maybe like 10% margins of what we're looking at of HERD as you know, as low as 8%? What does a healthy margin look like in in brokerage right now?

SPEAKER_00: 21:26

I mean, it really comes down to like everybody's different. Like we have some agents who do 10, 12% margins, we have some agents doing 25, 30% margin.

SPEAKER_01: 21:35

Oh, wow.

SPEAKER_00: 21:36

It depends on it depends on what your load mix is, what what kind of commodities you're moving, what value, like what value levels you're moving at. Uh, I still think the 15 to 18% is where you want to be, but it's definitely getting harder to achieve that. Like rates are lower. And I mean, it's because rates are so low, it is easy to go out there and you just try and find cheaper mar or lower freight costs for the customers because everybody's trying to move stuff because everybody's terrified of the potential recession. So everybody's just trying to grab market share where you're seeing, like you said, eight to ten percent margins, which is insane. Like, how is how is a broker working on eight percent margins, especially if you're an agent-based broker and now your portion of that is very, very small, and the cost of running a brokerage is really, really high right now with all the technology costs and insurance costs and everything that just keeps going up and up and up and up. So, like if you're working for a broker who is fine with eight to ten percent margins, I mean, maybe they're super lean in the back, but also that could be a sign that that something could be wrong or could happen really quickly because if they're only getting two, two and a half percent of the total gross profit on that to fund all of the stuff that they need to fund, that's not a lot of money.

SPEAKER_02: 23:02

Well, that that brings me into my my next sort of group of questions, and that's around just sort of like what does a a freight agent PL look like? Uh, you know, the profit and loss statement, what are some of maybe like the those top you know expenses versus those top revenue items? I mean, obviously revenue is going to come from their their customers, but are they dealing with you know 10 customers or two customers, or is it kind of just varies agent to agent?

SPEAKER_00: 23:26

Varies agent to agent. Some have one customer who's their primary source of revenue. Some have like we have a few agents who are in the hundreds of customers who they're dealing with, I mean, that the but those people also have big teams, so they have big expenses for covering the teams, having an office space. But those are good problems to have because that means you're being very successful.

SPEAKER_02: 23:50

Is it for expenses? Is it more on like the insurance side of things? Is it technology, or do they even have to worry about that with being with SPI?

SPEAKER_00: 24:00

With SPI, you don't have to worry about any of that. We cover all the technology, we cover all of the insurance, we cover everything. Uh the only expense they have is where they're working and what they're working on. They just as long as they have an internet connection, a computer and a cell phone, they're good to go to work for us.

SPEAKER_02: 24:19

That's why I don't I I just speaking at you know, at it at a turn, but that's why I just I don't understand why people are freight brokers and not a freight agent.

SPEAKER_00: 24:27

I it kind of maybe goes back to what your earlier comment was, you know, risk averse and absolutely like it it is it is a scary jump to make, but like like our CRO says all the time, being a freight agent is a like license to print money.

SPEAKER_02: 24:41

So I just don't get it. I feel like it's the best like entrepreneurial opportunity for you know a lot of the freight brokers that I've known throughout my career. I'm like, why didn't you just start this earlier? Um, so it's it's it is cool to see maybe you know more of the the market shifting in that direction. I guess maybe that's sort of a high-level question. I I'd love to hear your perspective on. Like, what do you think sort of the the state of freight brokerage looks like right now? And do you see it evolving into mostly an aging game?

SPEAKER_00: 25:16

There's always gonna be people who want the dependability of a paycheck. So I don't think the employee model is ever gonna go away. Uh, and I mean the employee side does have the benefits of like a we're a cradle to grave shop. So, but when you're an employee based, you could have carrier sales reps, you can have customer sales reps, you can have all that other stuff. Where when you're agent-based, odds are you're all cradle to grave because you can't really provide those services for them. So I don't, I don't, I think there's always going to be a healthy mix, but I definitely think more and more people are going to see the benefits of being an agent, and it's gonna become more and more of an option that people take because I mean it has the potential to make you a lot more money.

SPEAKER_02: 26:06

Now what we're looking at, you know, this is uh October just ended. We're recording this at the beginning of November. So a lot of folks have either already finalized their 2026 budgets or are currently working on them right now. What does I guess a typical freight agent budget look like? Is it you know just uh office space? Is it equipment, employees, and then you don't necessarily have to worry about any other expenses?

SPEAKER_00: 26:32

Or is it I mean if you especially especially if you're just the one man, one man show, you don't you don't you're not really thinking about any of that. You're you don't need to because all like I said, all you need is your laptop, your cell phone, and an internet connection. And you can you can literally work from anywhere. We we have some agents who they like they'll go on vacation and they're working at like they're taking phone calls at the beach. That's awesome because they they have Wi-Fi and they they can do that. Uh I mean the biggest thing is just making sure that you're you're forecasting like your custom, like you need to you need to know what your customers are, what your customers' budgets are because sometimes like we do they have somebody new in transportation who's now looking to change their freight budget and lower their freight costs, and you need to be cognizant of those things because if that happens and they go to an RFP and you you're one of those agents who are doing the 20-25% margins, and now all of a sudden they're looking at their freight spend. If you go in at 20-25%, you might lose some of those lanes because you didn't make the connection that hey, they're doing this for a reason, they're doing this to potentially lower freight costs, and because they have somebody new in-house that you don't necessarily have the relationship with where maybe you had it with the old person, which is why you were able to charge those kinds of margins. Now you're if you're not keeping up with what your customer is doing, you have the potential to lower your revenue on that customer because you might lose the lane. You might lose, you might lose the customer because you come in too high. It's just being cognizant of those things.

SPEAKER_02: 28:11

Now, with with your role, you you have also been heavily involved in the technology side of things. We were recording this on a Monday right before TIA, Technovations, um, which is a conference I believe that you you go to each year or try to anyways in every single year. And so I'm curious what your your take on the overall sort of technology aspect side of things is where are people maybe over investing or underinvesting when it comes to freight tech?

SPEAKER_00: 28:42

Well, I mean, if you're gonna talk about freight tech, you gotta talk about AI because I mean at technovation, that's gonna be every every session is gonna be a drink every time you hear the word. I mean, so I mean technology is that's one of the reasons to like transportation is so fun right now is because it's a technology gold gold rush because transportation went from everybody hating technology to the last seven, eight years. Now all of a sudden technology is booming and there's new tools left, right, and center. And the the biggest thing is don't just like all the presentations are gonna look amazing. But when you're going into demos and you're going into see these tools, make sure you're asking questions about how it will work with your business processes because every broker does things differently. And they're like, especially for us as an agent-based model, we go into a lot of these tools and they say, Oh, it's gonna work great, it's gonna work great. And then we say, Well, we're agent-based, so we can't mandate that our agents use any technology because they're their own independent entities. We can't say you must use this or else because then they'll say, Okay, bye-bye. So a lot of companies they don't think like that. They they just assume everybody's employee-based and it'll work for everybody, but that's not always the case. And then, I mean, if you're gonna talk about AI, I think there's been a big change in AI because before like two years ago when the AI boom started, AI was gonna do everything. Like every tool AI was trying to replace the entire process. But I've seen in the last like 18 months, everything's now being crunched down to it's only taking tiny slices of processes to because in reality, like AI is never gonna replace agents, it's never gonna replace brokers because AI can't handle when things go wrong. It works great when everything is it's a standard shipment, everything goes smoothly. But as soon as something goes wrong, the I the AI can't handle that. So using AI, but AI is a necessary thing for any broker, but you you gotta like if if you're afraid of AI and you're afraid of technology and you're afraid of what it's gonna do, you're gonna get left behind. But the most important thing is that you use the AI to help make. You better. That's what, like at SBI, that's what we're trying to do. We we do have a few AI tools that we're using, but we use it to empower our people. We're not replacing people with AI. We're empowering people so that they're not necessarily doing all the mundane tasks that don't take any brain power. Why are we spending their time and efforts on those kinds of things when they can be doing much more complex things that are more interesting for them and also more revenue generating or expense saving on our side?

SPEAKER_02: 32:05

Where are you seeing you mentioned um when AI is involved in like some of the the you know, I guess uh smaller processes are built into the business processes. Are there any specific examples of where you're seeing it actually make some real impact?

SPEAKER_00: 32:20

Well, I mean, document imaging is that's the the biggest one we've had recently is starting to utilize AI for we we're up to like 42% of our all of our invoices are auto-approved by AI. Wow. So we I a human never touches those documents, they get approved, sent to the customer, and everything goes smoothly. Uh I mean it's in scheduling assistance and all those kinds of things. It's just utilizing the tasks that like take time but don't necessarily provide any value, and trying to find a tool that can replace that time and make it so that you can do something much more valuable with your time rather than trying to schedule appointments or all those kinds of things.

SPEAKER_02: 33:14

Yeah, because I I would definitely, especially in in my business, there are instances where it has made a dramatic impact. The perfect one I use every time is uh transcribing like social media clips. I I used to have to do it. I used to pause, play the video, pause it, play it, pause it, and then in between, I'm typing out exactly what the person is saying. That the fact that it does it automatically now has saved me so many hours. And you know, for a lot of the the people out there who sort of poo-poo on the benefits of AI um or the the lack thereof, and that it's not actually proving anything. I said, well, and first I think you have to kind of adjust your definition of AI. Yes. Uh, and then from there, you can uh attack certain business processes to your point um where it's going to make a dramatic impact. I do not want to be sitting around and hand transcribing podcast episodes in order to make the podcast a little bit more.

SPEAKER_00: 34:12

Like but AI isn't infallible. So make sure that you're actually like all of these processes, make sure that you're still spot checking.

SPEAKER_02: 34:20

Yes.

SPEAKER_00: 34:20

Like, especially like in your transcribing thing, make sure you're actually reading what it's transcribing because especially when you have people who have slight accents and all those kinds of things, like it can think it said something that it did not like the person did not say, and it can look really bad if you actually put that out there. So always make sure that you have a human in the loop.

SPEAKER_02: 34:42

Yeah, definitely uh check on those because especially when it comes to like names and companies, uh we we still hand verify those or manually verify uh those. But the the perfect explanation that I've heard is that AI can do great at the messy middle, but you have to be the one to start it, you have to be the one to to sort of reprompt it and and reprogram it. But if you're as long as you're involved at the start and at the end and let AI kind of take over that messy middle, then that's where you'll find like the, I guess, the the sweet spot when it comes to to using technology. Um I'm I'm curious with on the shipper side of things, because we've heard like more shippers starting to become uh more cognizant of the shipping process. Uh, you know, they they want to know more about you know driver qualification and who's hauling their freight and you know, important questions like that. Um, but I I've also heard you talk about shippers becoming more tech savvy too, or freight tech savvy. What are the I guess maybe the tech solutions that shippers care about that maybe are a little surprising?

SPEAKER_00: 35:49

Well, I mean, visibility is obviously first and foremost. Uh, we've seen a lot of a bit a large increase in the number of customers who, when we sign their agreements, require visibility for all of their loads. Where five years ago, that never happened. Like we wouldn't, we would never sign a contract that had a requirement for visibility. And I mean, because technology is becoming so much more pervasive, there's a lot of requests for EDI and API connections, which I think are awesome. Like the more the more interconnected you can get with your customers, the harder it is for them to leave. Because now you have all of that work already done. And in order to move to another provider, they now have to do all of that setup again with somebody else. So it can help keep your foot in the door on those kinds of things. And I mean, so yeah, we've seen a lot of connections with that visibility, like I said. And I mean load uh we're seeing it more and more companies go to load boards on their own internal side. Where I mean, there's there's benefits and there's downsides depending on how you like to bid on your freight. And I mean, with RFPs, those are starting to get more and more sophisticated because there's more tools now to ingest that data and analyze that data. And now because they are happening so much more frequently, uh I shippers have started to invest in those sorts of technologies because they're doing so many more like what used to be a once-a-year RFP. There's some customers now doing them quarterly because rates are so in flux. I mean, now, like I said, we're sort of starting to see where everybody's expecting like nobody wants to lock in for a year because they're the rates are gonna go up. But I don't know, are they?

SPEAKER_02: 37:56

Yeah, who knows? I mean, it just feels like you you mentioned earlier in the show about, you know, maybe we are just in a new normal, but I feel like ever since 2020, we've been kind of wondering like what does even normal look like? And I don't know that anybody knows. And obviously those purchasing habits right after, you know, sort of some of the lockdowns started to end, where you know, you saw this interesting, I guess, move from uh people spending in the goods economy to more the services economy. And then I think everybody expected that pendulum to swing back to goods, but uh maybe we are, like you said, kind of evening out with it with goods and services alike. It do you maybe see that as far as the, I guess, the habits of the population for you know the next couple of quarters.

SPEAKER_00: 38:43

Uh it's definitely possible. I I think service might go down a bit only because of all the fear out there of a recession. And so people are gonna stop spending on experiences so much because they're gonna get wary of potential downside of. I mean, when you look at the debt ratio of all of both sides of the border, obviously I'm in Canada, so ours is not the same as down south, but the debt ratios that like in households are now carrying are so high that there's they're a lot more sensitive to all of this talk now and of a potential recession because you're worried that okay, now how am I gonna pay off my credit cards because I can't maybe I can't go do that trip to Disneyland because I don't know where my uh I don't know what's gonna happen with the economy. I don't know what's gonna happen with interest rates.

SPEAKER_02: 39:42

Yeah, because they I mean, especially on the Disney side of things, they're not getting any cheaper.

SPEAKER_00: 39:48

Definitely not. That and that and groceries, like the two things you know are always gonna get more expensive.

SPEAKER_02: 39:55

They mentioned that. I feel like that's a social media clip right there. Uh switching gears a little bit to the marketing and sales side of things. How are you seeing agents adapt to all of the turmoil or you know, potential of turmoil that exists in the market? Are you seeing them marketing themselves more, uh, you know, selling themselves more, doing more cold outbound? What we're talking to ages, how are you seeing them adjust to the current market?

SPEAKER_00: 40:22

Well, I think the biggest thing is their focus on their existing customers, making sure that they're making essentially reselling themselves to their existing customer base, so that because there is all this turmoil out there and all this talk of rates and all this customers are being bombarded every day by 15 to 20 other brokers trying to get their business. So it's important that the customers you have make sure you have good relationships with them. And if if you your customer base is starting to go down, pick up the phone call, pick pick up the phone, make do the cold calling, send out emails, send out anything you can do to try and get more business because there's no time like today, and there's with the looming potential of a recession and all this other stuff, there's gonna be companies that unfortunately don't come out of this alive. So be ready to when that happens, be ready to pounce on because all of that business needs to go somewhere. And it's up to you to be able to go get it.

SPEAKER_02: 41:34

No, that that's a great point, especially when there is so much turmoil that's going on, seemingly, especially uh surrounding us, you know, with grocery prices and then geopolitical issues and things you cannot control, but you can control the relationship that you have with your own people, and then also maybe alleviating or taking some stress off of your customer's plate where they don't have to worry about moving their freight, the security of their freight, uh, you know, even all of the change management that would have to become involved if they were to, you know, go with another provider, you know, reminding them of that comfort of uh the worry-freeness of working with you, I think is a really smart angle to think right now.

SPEAKER_00: 42:15

I mean, the other another strong thing, like fraud, unfortunately, is a massive part of our industry currently. So sell up the tools you're using to try and alleviate fraud. If you're using an onboarding process, I don't want to name any names, but if you're using onboarding processes that monitor those kinds of things, sell your customer on that. Teach your customer that they should be monitoring the carriers coming in and out of their facility. If you tell them ABC trucking is gonna be picking up the load, the person on the dock who's loading that should be confirming that ABC trucking is the actual trucking company picking up your load. Because we've seen it time and time again where our agent sets up ABC trucking, DF trucking comes in to pick up the load because they have the pickup number somehow, some way. The person on the dock doesn't pay attention to that because they got a reference number. They they said they're picking up the load to Ohio, and they have a load to Ohio, so they're like, all right, here you go. And all of a sudden now that load is gone.

SPEAKER_02: 43:27

Yeah, because I remember back as you were talking, I was remembering back at uh the TMSA Transportation Marketing and Sales conference that I went to back in June. Mike was there too, of SBI as well. And there was a talk that was going on about fraud. And Cassandra Gaines, uh, she asked the audience who in here is marketing their fraud prevention to their customers. And out of a room with close to 200 people, two people raise their hand. So there it's it's prevalent among this industry that the the brokers of the ages, they're not telling their customers about what all of the work that they're doing to help their freight move uh smoothly and and quickly. And so I think that that's such an important marketing lesson to hit home on is show the work of what you're doing in the background so your customer has less to worry about. So they're not going to make a change in the future, and that they're gonna trust you more and rely on you more and see you as more of the educational resource in this, you know, sort of fraud-driven environment that we we find ourselves in. Um last couple of questions here, you know, as someone who who goes to you know a lot of conferences, I am curious from you know, the I guess the the agent lens, how would you, or maybe even like the profit and loss statement, you know, how do you justify, you know, what does ROI look like whenever you're going to a conference? And how can you kind of justify that from like a business standpoint?

SPEAKER_00: 44:55

I mean, the biggest thing is well, a especially like an industry conference like TIA, it's important to at least have a somewhat of a presence just because I mean it is it is our industry, it's all our peers, and it's a good place just to go and connect. But to get that ROI, you need to be making connections with people there who can potentially help you down the road and seeing all like all of the technology, because like I said before, it's a technology boom right now. So you need to be up to date on everything that's coming out there, and if you can get a tool that saves five minutes a day, that's probably worth the investment you just spent to go out there for a few days to go to see the conference. So it's just making sure that you're you have your ears and eyes open for any potential possibilities that can help you down the road.

SPEAKER_02: 45:51

And then I think too, from uh even like SBI standpoint, you guys are always investing in new technology. And so even if you have a current tech stack or you're thinking about adding something else to your to your tech stack, we've had you know a VP of tech or VP of IT, I believe is his title, Eze Peralta on the show. And he's talked about how he integrates all kinds of different technology for all of the agents. And so, you know, having a partner like SPI to be able to help you with that financial burden, but also to help increase you know processes or productivity, you know, things like that, like the these kinds of decision making and the the network effect that you can get by by working as a freight agent for SPI, I think it's just you don't really realize that in the bottom of your you know profit and loss statement, but well, you probably do because your expenses are a lot less than what you know a traditional brokerage or if you were running a traditional brokerage would be. Um but I would love for you to be able to sort of speak to the I guess the investment that you make in your agents in the in the tools and the processes that they prefer as well.

SPEAKER_00: 47:02

Absolutely. Like so we're we're always open to new technologies, like you said. We have agents coming to us all the time, like, hey, we have this new tool, or we we found this new tool. Can we can we put it onto the network? Can we put it onto the TMS? And we evaluate all of those things. Some of them we're gonna say yes, some of them we're gonna say no, because maybe they only are good for you and not for everybody else. But we're gonna evaluate it nonetheless, and like you like going to these conferences, you never know what new tools are out there because a lot of the times, like I get a hundred emails a day from vendors trying to sell me some new tool, and all of those I just ignore and delete because I get them all the time every day. But when you can actually go and touch and feel and see what these tools do, and you you realize, hey, I I've seen their name like 15 times in my inbox. I've never actually looked at it, but now I see what they do, and yeah, maybe I can schedule a demo to see if that'll work for everybody. And most technology, it's never gonna work for everybody, especially in an agent-based model, because everybody does their does their thing a little bit differently. But we're going to invest in our technology to make sure that our agents have the best tools at their disposal so that they're not getting told no because the technology can't do something that the customer needs.

SPEAKER_02: 48:26

All right, James. We have talked about we've talked about taxes, we've talked about technology, marketing, sales conferences, all of that good stuff. Uh, what would be maybe some end of 2025, uh going into 2026 advice that you would give to prospective freight agents out there that are thinking about m taking the leap?

SPEAKER_00: 48:49

I mean, there's a lot, there's a lot of turmoil out there. There's a lot of unknown. So if you have the wherewithal to make the jump, make the leap, now is as good a time as any because there is so much turmoil out there. Your customer might be more willing to open up to another vendor because it's happening all the time right now. And so now might be before everything does turn, now might be the best time to do it. You're gonna you have the potential to make a lot more money. Not everybody's gonna make more money. There's some people, it it just won't work. Your customers don't come over, something happens, you're maybe you can't get credit on that customer from the new broker. But if you if you're willing to take the risk, I think it's a super valuable risk you can take. And it's just it just has the potential to completely change your life because you're now you work for yourself. You're you're you're not you're your own boss. You don't have somebody telling you what to do every day. I mean, that sounds real, real nice to me.

SPEAKER_02: 50:04

Well, I think too with with everything that you you've talked about, especially with with building the relationships with your customers and having them see you as you know the the trustworthy, knowledgeable person within this industry, if you are proactive in those conversations, then they're gonna trust you to continue making the best decisions for not only for themselves, but also in in turn for your freight as well. So I think this is all, you know, just it's it's kind of the the time of the year for like the housekeeping of looking at wherever your all where all your money went and where it's maybe gonna go and where it's coming from and uh you know making those adjustments and and getting ahead of some of those you know new year's resolutions. So I guess a final piece of of you know, maybe advice or where folks can connect with you, maybe connect with you at you know upcoming conferences, um, all that good stuff. Where can they find you, James?

SPEAKER_00: 50:55

Yeah, so like I said, I'm gonna be at Technovations uh later in this week. I'm on LinkedIn. You can find me there. You can email me, JLemon at spi3pl.com. Uh if you're a vendor, I'm probably gonna ignore your email.

SPEAKER_02: 51:09

But unless they find you at a conference.

SPEAKER_00: 51:13

But you find me at a conference, I'm always willing to have a conversation. I like I surprisingly like to talk. So I mean, yeah, and like I said, I'm on LinkedIn. You can connect with me there. I accept pretty much every connection on there, so yeah, same.

SPEAKER_02: 51:29

I just accept everybody, and then all of a sudden I have no followers and I'm like, what the heck? Oh, wait, they're all in the connections tab, not the following tab. So LinkedIn is a little weird in that regard, but it is the best networking platform, a digital networking platform um that our industry has to offer. So, James, this is great. This is uh very eye-opening as far as like the financial lens is is concerned. So I am excited to kind of like dive into my books now and and and see what we have planned for for 2026. So appreciate you and your time and and the relationship, obviously, with SBI and being big supporters of the show. And so finally glad to get you on, and I can't wait to get this conversation out to folks.

SPEAKER_00: 52:08

Sounds good. Thank you.

SPEAKER_01: 52:14

Thanks for tuning in to another episode of Everything Is Logistics where we talk about things supply chain for the thinkers in the freight. If you like this episode, there's plenty more where that came from. Be sure to follow or subscribe on your favorite podcast app so you never miss a conversation. The show is also available in video format over on YouTube just by searching Everything is Logistics. And if you're working in freight logistics or supply chain marketing, check out my company Digital Dispatch. We help you build smarter websites and marketing systems that actually drive results, not just vanity metrics. Additionally, if you're trying to find the right freight tech tools or partners without getting buried in buzzwords, head on over to CargoRex.io where we're building the largest database of logistics services and solutions. All the links you need are in the show notes. I'll catch you in the next episode and go check.