The Leader in Gen 2 Transportation Management Software, Port TMS, is proud to announce its newest, strategic integration with Denim. Mutual customers can now easily export jobs from inside their Port TMS dashboard to Denim for payment or factoring. The file exchange minimizes double data entry by aligning job details exactly between the two systems.
“We are excited to team up with Denim," stated Mark Groves, VP of Port TMS. "Their offering of a low cost and easy-to-use payment system is appealing to Ports' customer base. The easy-to-use file exchange will increase efficiency and processes for any accounting team. Denim has reset the cost for paying factors and carriers directly and it’s great how they have put the newest technologies to work for their customers."
"Our collaboration with Port TMS has enhanced the efficiency and experience for our shared clientele. This integration simplifies back-office tasks and drives operational ease," said Sean Smith, VP of Product at Denim. "Collaborations like this are reshaping the supply chain, dissolving data barriers, and introducing cohesive solutions."
Cash flow is the headwind all logistics companies face at some point.
Imagine a situation: shippers are on net 30 to 60-day payment terms, yet carriers must pay their fuel bills immediately. This scenario frequently translates into a significant cash crunch for growing brokerages and fleets.
On top of a challenging financial model, the supply chain faces one of the worst down markets in history.
The tumbling freight spot market and low demand push more fleets out of the trucking industry. So much so, it's actually setting records. According to Q1 2023 federal data, 31,278 trucking companies ceased operations in the year's first four months.
And it's not just impacting fleet vehicle owners. Multi-million dollar freight brokerages are filing for bankruptcy or merging.
In a tumultuous market, improving cash flow is even more critical. Freight brokers and fleet owners who effectively manage cash flow can:
The secret to keeping a healthy cash flow? Avoid these 5 common mistakes.
Consumer spending habits are veering from goods to services. Your customers may experience financial difficulties due to decreased demand. This can result in delayed payments, which can have a significant impact on your business's cash flow.
To counter this, monitor your accounts receivable and freight payment processes closely and establish a robust credit control system. A freight payment system can automate collections and create receivables reports to l inform you of any delays or discrepancies.
Additionally, communicate with your clients and negotiate payment terms that work for both parties. Consider offering incentives for early freight payments to encourage promptness.
It's crucial to keep a close eye on your expenses. Review your cost structure and identify areas where you can cut back without compromising your operations. Look at areas like non-essential travel or underutilized employee perks. Renegotiate contracts with vendors, and look for lower rates on factoring services or insurance.
Freight factoring fees are always open to negotiation based on days of sales outstanding and volumes. If your current factor is unwilling to re-evaluate your rate, it might be time to shop around. Switching your factoring company may seem difficult, but it can be done in under a week (Yeti Logistics switched factors in just 3 days).
While these steps are crucial for immediate expense control, considering a long-term view is equally important. Consider ways to avoid unnecessary costs in the future and maximize the value of your spending.
Failing to develop a comprehensive financial plan can affect your cash flow. When your business loses money, receives late payments, and incurs higher expenses, you need to develop a plan to fix it.
A comprehensive financial plan lays down a roadmap for cash flow and anticipates potential obstacles. By creating a strong cash flow forecast, you can consider typical recession effects like losing clients, smaller profits, and fraud. This forward-thinking strategy allows for identifying potential cash flow gaps and formulating strategies to bridge them.
A financial plan should include the following aspects:
A financial plan's true strength is its ability to change and grow with market conditions, economic predictions, and internal adjustments. Regularly reviewing and updating your plan helps your logistics business stay financially stable, no matter the economic climate.
Dependence on a select group of major clients can jeopardize your cash flow. In fluctuating consumer demand, the logistics sector often feels the ripple effects. When demand for goods slows, freight and logistics markets follow suit. This situation is where diversifying your client base becomes a strategic shield.
Diversification isn't about losing focus or expanding too broadly. It's about expanding your client base in a targeted manner. This strategy spreads risk, ensures a consistent revenue stream, and maintains your niche expertise.
Let's take a practical example. Suppose a logistics company primarily serves the automotive industry. A downturn in the automobile sector would directly impact the company's revenue.
To counter this risk, the company can venture into related sectors. Industries such as agricultural machinery or construction equipment need similar logistics services but operate under different market dynamics. This way, the company is less vulnerable to a single industry's performance.
Besides industry diversification, consider new geographies and adding new services. Explore other areas with potential demand growth if your operations are in one region.
Moreover, introducing new services can attract a broader range of clients. Services such as final delivery or temperature-controlled logistics can generate extra income, making your business more resistant to market changes.
Planning how to diversify your clients can make your business more stable in different market situations. This way, your company leverages its niche expertise while growing and protecting its revenue.
Technology isn't an adversary to your cash flow in the logistics industry—it's an ally. Investing in technology is important for your company's efficiency and competitiveness, even if you are being careful with expenses.
Investing in technology isn't about acquiring the latest and most expensive gadgets. It's about strategically implementing cost-effective solutions that streamline operations and boost productivity.
One such indispensable tool is a Transportation Management System (TMS). A TMS can enhance your logistics company's efficiency.
It enables route optimization, lowering fuel costs and reducing delivery times. It improves inventory management, minimizing warehousing costs. Moreover, it enhances visibility throughout the supply chain, allowing for better decision-making and improved customer service.
In essence, strategic technology investments are integral to optimizing operations, improving service delivery, and enhancing cash flow management.
There have been 12 freight recessions since 1972, and the savviest brokerages have become stronger each time.
Maintaining a healthy cash flow during a recession is critical for the survival and growth of your freight brokerage business. Avoid these 5 cash flow mistakes to navigate the economic downturn and position your business for success when the market improves.
Remain vigilant, adapt to the changing landscape, and leverage available resources to ensure your company's financial health and stability.
Alliance Logistix was searching for an efficient AP/AR solution for their brokerage and faced a constant influx of paperwork from their substantial load volume. Co-Founders Alex and Natalie Schick started their brokerage to save customers time while also providing an exceptional work culture for their employees - not shuffling paperwork.
Denim's freight factoring presented the ideal solution. Implementing Denim into their EKA TMS streamlined their AR/AP processes and brought about several benefits:
With a vision to foster a healthier work environment without compromising quality service, Alex and Natalie launched Alliance Logistix in 2023 with their long-time friend and colleague, Kevin Mendez. Their collective experience of over three decades, alongside their commitment to superior customer service, accelerated the growth of their brokerage to 9 employees handling more than 2,000 loads per month in under three months.
The shift from agents to brokerage owners introduced challenges for Alex and Natalie, with the most difficult being accounts payable and receivable (AP/AR). Accustomed to an invoice-free workflow of an agent-model brokerage, their business launched them in a whirlwind of paperwork. In Natalie's words, the magnitude of documents generated by their high-volume operations was "overwhelming, to say the least."
The challenges faced by Alliance Logistix in accounts payable were wider than handling paperwork but also included timely carrier payments. Throughout their careers, Natalie and Alex have established a solid reputation among carriers, known for respect and prompt payments. Natalie emphasized this significance, stating, "Ensuring my team gets their paycheck is crucial, but it is equally, if not more, vital for the drivers to receive their payment swiftly." A lack of efficient payment procedures threatened this hard-earned standing among their carriers.
To uphold their mission amidst growing business needs, Alex and Natalie knew they needed a solution to streamline their financial operations. They sought a financial partner that could:
Alliance Logistix required a financial solution adaptable to their unique requirements as a freight brokerage. When one of their main clients switched from payment terms of 20-25 days to 90 days, it created a cash flow predicament for their newly established brokerage.
"We looked into different financial alternatives like credit lines and loans, but we required a significant amount and needed workflows to support our AP / AR. Additionally, we wanted a system that benefited our business, carriers, and customers. Denim solution fitted our requirements to a tee,” Alex recounted.
Denim emerged as the perfect fit for Alliance due to its seamless integration with Alliance's existing EKA TMS, flexible financing to handle their high volume, and below market cost carrier QuickPay.
Natalie initially had concerns about managing AP/AR. However, after training provided by EKA and Denim, she had the confidence of a seasoned CFO. She shared, "I was anxious about handling AP/AR by myself, but EKA's training helped me realize it wasn't as intimidating as I thought. I had access to Denim right inside my EKA dashboard."
Integrating Denim into their existing EKA system was a breeze. After a one-time customer mapping, the real-time integration enabled Natalie to send jobs to Denim from within her EKA dashboard with a few extra keystrokes. Her new workflow eliminated duplicative data entry saving her time and reducing the chances of human error.
Natalie highlighted the ease of this system: "We manage everything via the EKA dashboard, using the Denim portal only to monitor finances and payment schedules. The integration between Denim and EKA has truly simplified our processes."
Moreover, Denim's notification system further improved Alliance Logistix's operations by alerting Natalie about potential errors via email, minimizing the need to monitor the Denim dashboard constantly.
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Time is money, and Alliance Logistix substantially benefited from saving time on payments and collections. Natalie points out, "Denim is saving us a lot of time. They double-check everything we send, so the amount of paperwork from our customers is minimal."
At inception, processing a load invoice from cradle-to-grave at Alliance Logistix took approximately 8 minutes. At a high-volume office with over 2,000 loads, their team spent 266 hours a month on AP. With Denim available directly from EKA’s TMS, processing an invoice now only takes 3 minutes on average - an impressive 62% reduction in processing time.
Denim's solution has alleviated the need for Natalie and her team to manage collections, ACHs, and sending out remittances. This significant workflow reduction has allowed Alliance to focus more on enhancing customer experience and securing new business. The results are remarkable, with a 35% month-over-month volume increase - all without the need for additional staff.
As a testament to the streamlining effect of Denim's platform, Alex noted, "We have reduced staffing on the AP side and transitioned it into the dispatch side." This move underscores the efficiencies achieved and the shift in focus toward more value-creating tasks.
At previous jobs, Natalie and Alex fielded upwards of 5 calls daily from carriers inquiring about their payments. This problem was largely due to long carrier payment terms, uncertain processing times, and poor communication, leading to much guesswork for the carriers.
With Denim, carriers know exactly when and how they receive their payment. Once a carrier creates an account with Denim, they can easily access the information about their load details, payment amount, and timing.
This speed and transparency coupled with proactive communication via automated emails, has reduced the number of payment inquiries to just two in the last quarter. Denim's carrier dashboard has supported Alliance Logistix's strong reputation and enabled them to strengthen their carrier network further. Natalie summed up the sentiment, "Denim's proactive communication reduces almost all carrier payment calls and questions. Our carriers are very happy with Denim right now."
The ability to accurately forecast business expenses and effectively manage resources has become a turning point for Alliance Logistix. Denim's Business Analytics Dashboard provides detailed projections of revenue, payables, and receivables it offers have become an essential tool.
"Armed with this data, we can easily estimate the cost of bringing on a new customer by volume. We have a clear picture of what our AP and staffing needs will be to manage all the backend tasks," Alex explained.
The process provided by Denim has been easy and supportive, giving Alliance a reassuring sense of ease. Alex shared, "We no longer need to worry about issues like 'Will we be able to secure credit for this customer?' or 'Should we start the credit application before even beginning the onboarding process?' when considering new customers."
The speed and ease of the credit check process further empower Alliance Logistix to take on new business confidently. Denim's swift and fair approvals process stands out remarkably in contrast to other factoring companies and financial options they've explored. "Denim gives fair and fast approvals for factoring. Denim is truly a partner when dealing with money," noted Alex.
Alliance Logistix's quick success during a tough market is a testament to Alex and Natalie's expertise and savviness. The close collaboration between Denim and EKA continues to streamline workflow, so they can count on even more convenience and productivity improvements. We are honored to be able to equip them with the tools and financing to continue their rapid growth.
Don't hesitate to schedule a demo if you want to discover how Denim can help you scale your brokerage. Our tailored demonstrations can show you exactly how Denim can supercharge your brokerage's growth and efficiency.
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Only one thing is always true for your freight brokerage.
Positive customer experiences drive success.
The present market is encountering more significant difficulties than ever due to excess supply compared to limited demand. Recent market conditions caused Surge, a $150 million freight brokerage, to declare bankruptcy.
In this volatile environment, ensuring goods move from point A to point B is insufficient.
To stand out in this sea of providers, you must consistently offer a service that exceeds expectations and fosters deep, enduring relationships.
Customer experience is not just a perk of the service - it's the crux around which all operations revolve. It has transformed from a nice-to-have to a fundamental, non-negotiable business requirement.
Key Takeaways:
The bar for customer expectations is set high in the current market landscape.
A revealing Salesforce study suggests, "74% of B2B buyers are likely to switch brands after a single poor customer service encounter."
It is crucial to prioritize providing not only a satisfactory customer experience but rather the best possible experience that is consistently delivered.
But what does a poor customer experience look like in the freight and logistics industry? It can manifest in several ways:
It is essential to be aware of these potential pitfalls. SMARTBrokers can learn from these errors and make changes to provide customers with a personalized, attentive, and consistently positive experience. This proactive approach satisfies customers and promotes loyalty, resulting in repeat business and setting you apart in the competitive logistics industry.
The freight brokerage landscape is diverse, with behemoths managing vast logistics networks and commanding extensive resources. However, the scale of these companies sometimes leads them to overlook the importance of personalized services and customer experience. SMARTBrokers fills this gap.
Large freight brokerages and 3PLs can make customers feel like another number in their extensive database. Their focus on scale can lead to a lack of personal touch and attention to specific client needs, including simple gestures like remembering special occasions.
SMARTBrokers take advantage of this gap in the market by offering more personalized and attentive service. By making each customer feel like they are the most important, you can turn every transaction into a relationship built on trust. This can lead to repeat business and referrals, helping your business grow.
To consistently meet and exceed customer satisfaction, consider embracing the POWER strategy:
P - Proactive Problem Solving
Anticipate potential challenges and address them before they escalate, saving customers unnecessary costs, time, and stress.
O - Over Communication
Regular updates on processes, fees, timelines, and shipment statuses can foster a trusting relationship.
W - White Glove Service
Exceed standard expectations by tailoring services to each customer's needs and providing swift responses and detailed attention.
E - Embrace Technology
Utilize technology like freight payment systems, TMS, and track and trace tools to remove non-value add tasks. In doing so, you'll streamline processes and have more time to dedicate to customer experience.
R - Responsiveness
Quick and readily available responses to customer inquiries can create a positive impression and earn customer loyalty.
The POWER strategy can set you apart as a freight broker. Yes, it demands time and resources. However, the potential rewards are well worth it. You'll see gains in customer loyalty and repeat business. Plus, positive word-of-mouth can boost your reputation. So, in today's competitive market, excellent customer service isn't just a bonus—it's an essential element for success.
Providing an excellent customer experience is no longer optional but crucial for survival and success. A superior customer experience can give a lasting competitive advantage.
By adhering to the POWER strategy – Proactive problem-solving, Over-communication, world-class service, Embracing technology, and Responsiveness – you cultivate an environment conducive to customer loyalty and repeat business.
However, this is not a one-off process but a commitment to continual enhancement. Customer expectations are not static. They evolve with each technological advancement and shift in market dynamics. Staying attuned to these changes is essential. Use the POWER strategy as a guide and tailor it to your unique business model and customers' needs.
The time and resources invested in enhancing customer experience might seem significant. Still, the returns, in terms of increased customer loyalty, repeat business, and a lasting reputation for excellent service, are invaluable.
Remember, your customers hold the key to your success. Prioritize their experience, exceed their expectations, and success will naturally follow.
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Marketing your freight brokerage isn’t just about calling strangers and hoping they say yes.
Freight brokerages miss out on new customers when they don't market their services. Your ideal clients can’t do business with you if they don’t know you exist.
You need to do something beyond cold-calling people.
Shippers get spammed with cold calls and emails every day, so you must do something different to stand out in the crowd. This is especially true in a down economy.
Some dislike the idea of freight broker marketing. They mistakenly think it’s simply “posting on social media” or buying a billboard and are convinced it won’t work for them. They prefer calls because it feels more personable. The problem with this logic is that it dehumanizes the best aspects of marketing. After all, people are loyal to people. Marketing your team and offerings could win you more referral business from someone simply hearing of you and referring a friend.
In this guide, we’ll stay away from cliche marketing suggestions. We aren’t going to tell you to post on Instagram - much less TikTok. Instead, we’re covering 8 Ways to Market Your Freight Brokerage (with real examples) that help you stand out from the crowd without wasting your time.
Key Takeaways:
In the early days of the internet (and before), the Yellow Pages were the go-to resource for identifying companies within industries and by region. Nowadays, most brokers use Google Maps & Google Earth to scout for shipper leads for freight brokers.
“Look for big shipping buildings with lots of bay doors for trucks. This means lots of shipments coming in and out,” says Brandon Caldwell, former freight broker of 10 years and current Enterprise Account Executive at Denim.
Let’s say you’re searching for prospects in Charleson, SC. You might search for something like “shipping companies in Charleston, SC.” This shows a list of companies - some relevant - some not. In this example, we came across, “Carver Maritime.” A quick look around on street view shows plenty of places for freight to be moved. Looking at the image we’ve shared, you’ll see cranes in the parking lot and a gate that allows trucks to enter.
While we ask you not to spam Carver Maritime, you can absolutely use this strategy for logistics cold calls and promote your freight services.
Former freight brokers on our team speak highly about the power of LinkedIn for prospecting. It’s the best site for connecting with potential clients across most industries. Beyond that, it’s a great place to build relationships and a personal brand.
There are 5 things we recommend for success on LinkedIn:
For example, you can use Sales Navigator to identify shipping managers and leverage their profiles to find commonalities to build relationships. (ie: We both graduated from University of Texas - hook’em horns!).
HubSpot, a top provider of business & sales software, provides eleven great sales script examples here to get you. We suggest leading with the “I feel your pain” summary.
[One- to two-sentence description of common prospect problem.]
But what if [key result of using your product]? In the past X years, I’ve helped Y [vertical/sector] businesses [accomplish X results] by [short description of product features]. [One- to two-sentence description of results.]
[Call to action.]
Delivering freight to customers on time is more difficult than ever. It can be hard to know what carriers to call, much less how to know if you’re getting a good deal.
But what if it were possible to confidently deliver freight on time without finding the drivers yourself? In the past ten years, I’ve helped 100s of shippers deliver their unique products without the stress of finding a carrier network. This has resulted in 15,632 loads delivered on time without fail. Needless to say, all of my customers are very satisfied.
Wondering what this could look like for your business? Give us a call at 555-555-5555 and ask for a free quote today.
Get top of mind by engaging with prospects' posts via comments and resharing any interesting content they produce. Have non-sales-related conversations. You can do this with posts in your feed, in relevant groups, or by following relevant hashtags and responding to trending posts. The key is to keep your responses authentic and not make them salesy.
Identify influencers in the space and comment to get exposure for your personal brand. This is a lot easier than just posting yourself because these people already have an audience of prospects who are relevant to you. Being where their attention already means getting exposure simply by participating in the conversation.
We view posting on LInkedIn 2-3x a week as a long-term brand-building play. Don’t go crazy, and try posting to every platform daily. But posting regularly on LinkedIn will expand your reach and build an audience. Becoming a thought-leader helps to build trust with your audience. This leads to a situation where you’ll have more prospects seeking you out vs you having to call after then. This is the ideal situation because it reduces the burden of outbound calling on your team.
For the past few years, Facebook’s parent company, Meta, has placed a large emphasis on engaging with people through Facebook Groups. A quick search of groups on Facebook shows several large and potentially interesting groups with a high volume of activity.
Most groups do not allow self-promotion. Instead, you'll need to spend some time providing actual value to the group. Ask questions, be friendly, answer questions helpfully, and share valuable insights. You can also share articles and discuss industry news. Sure, it might feel like a long way off from reaching a sale, but offering value creates a stronger foundation for building your brand and trust with the community members. Your potential customers will remember you and like you more if you can offer them something that benefits them instead of jumping straight into dealmaking.
Some groups do offer one day per week where you can self-promote. Also, you’re usually allowed to respond to someone if they ask for the type of service you provide. Strike when the iron is hot and use those opportunities to move the conversation forward to a call or direct message. The key here is not to be spammy.
Pro tip: Don’t copy/paste the same message into multiple different groups. Most social media platforms will flag this and prevent you from posting or shadowban you.
Networking for referrals is one of the most effective ways to promote your business. This is not a new concept. However, we wanted to talk about how to do it successfully.
Networking is largely done at live events to promote your business without feeling sals-y. It makes a big difference and you can feel the energy in person. We all hate when someone talks ‘at’ us. Most people zone out. But if someone tries to get to know what we do, we’re much more likely to reciprocate.
If you attend events, try getting to know what services others are offering and offer to refer to them if you know anyone. Usually, people will reciprocate this offer. Since referrals close at a significantly higher rate than cold calls. Thus, referrals will be a lucrative income stream and is where many brokers just starting out get their early business. Referral expert and Denim’s Head of Partnerships, Jamie Neely, also had this to say:
We spoke to Briana Lupinaccio, VP of Revenue at Roadly Logistics, to get her advice on networking at industry events. “Trade shows are an opportunity for our team to meet with shippers face-to-face and explain what we can do for them. Connections we make at trade shows are high converters and lead to long relationships.”
Some events freight brokers should consider attending are:
While this list isn’t comprehensive, it’s a great place to begin implementing the advice above so you can start to meet with potential clients. What are your favorite industry events to attend?
For those looking for an automated way to prospect for companies that handle international shipments, try a service like ImportYeti. It’s free and shows how many shipping containers each company brings into the US monthly. Let’s say you're curious about the companies Target works with in the United States. Simply sign up for a free account and search for Target. Then, you can reach out to suppliers and offer your services.
Formerly Sales Genie, Data Axle allows you to buy a list of prospects for cold outreach. Building a list of prospects is super important. Especially if you’ve reached the point where you can hire some people to make cold calls for your brokerage. “We used this at Worldwide Express,” said Lexi Farris, a former freight broker on our team who used this at the large 3PL she worked for previously.
This isn’t the only company that provides this service. There are a lot of places that are willing to sell you a prospect list. The hardest thing to know in advance is the quality of the prospects. They might have great quality info for one industry but very little on another.
We’ve seen more people talking about Google ads lately. They’re asking questions like, “‘Are Google ads worth the spend?’ and ‘Should I be using Google ads?’” You usually see these questions pop up every few months on r/freightbrokers.
Most businesses don’t leverage Google ads until they reach a monthly six-figure revenue level. It can take time to make a profit from paid ads.
According to performance marketing expert Travis Vaught, Demand Generation Manager at Denim, “Most businesses won’t see ROI for at least six months when starting paid ads. You need to be in a place where you can comfortably spend money on advertising without an immediate return on investment.”
When you start using Google ads, you’ll want to target three things with your Search Campaigns:
If you’re just starting out, it can be hard to tell if someone called your business from ads vs just a regular organic search. This is important to know because this makes your ROI from marketing difficult to measure. You’ll need software to help with this, which is why we recommend waiting if you haven’t made your first six figures yet. If you’re just starting out, don't run Google ads yet.
But if you are ready, some of the benefits are:
Similarly to Google ads, you don’t really need to try your hand at Facebook ads until you have an established business and confidently understand your target market. Any type of paid advertising can get expensive quickly, and it can take a long time before a business gets good at it.
Now, when Facebook ads work, they work super well. Travis Vaught says, “Facebook Ads are great for building awareness and freight broker lead generation to call and email. You’ll need people to create the content you’re promoting, though, so many businesses who are new to ads will start with an ad agency since they can provide the graphic design and copywriting services you might not have in-house.”
Similarly to Google Ads, You’ll need software to help with this, which is why we recommend waiting if you haven’t made your first six figures. If you’re just starting out, don't run Facebook ads. But if you are ready, some of the benefits are:
What we’ve listed above are merely oversimplified marketing tactics. They’re great to know, but a lot goes into doing any of them well. You’ll likely hear of things like sales scripts, marketing funnels, etc. All of these are useful strategic things to know, but show yourself some grace if you are just starting to market your business. You’ll learn them with time.
In a general sense, we recommend your revenue determine what marketing strategies you should take
$0 - $100k / year: You need to clearly define what you’re offering and know how to communicate it so well that a 4th grader can understand. Next, you want to set up some basics like a website, a LinkedIn profile & page, and a Facebook profile and page. They are necessary so people can tell you’re a real business. Also, we recommend you niche down as early as possible. Don’t fall into the trap of pretending to help everyone. That means you won’t be top of mind for anyone. But if you specialize in Reefer shipments, when someone needs that, they’ll come to you.
$100k - $1 million / year: By this point, it’s time to make your first few hires (be they freelancers, accounting help, etc). You’re learning to do business differently, and this applies to your marketing as well. Ideally, you can hire someone to help make sales calls (or multiple someones). If possible, it could be worth your time to hire a freelancer to create content for your website and social media profiles so people know you exist. Many early-stage brokers neglect the power of marketing on social media which will set you apart. Plus, updating your website regularly will help you appear on search engines.
$1 million - $10 million+ / year: This is where things get tricky, and there stops being a one-size-fits-all marketing strategy. By now, hopefully, you’re learning how to hire and fire correctly while avoiding micromanagement. You should absolutely be building an email list of inbound leads to alleviate some of the pressure on your sales team. In the earlier stages of this range, you could consider hiring a marketing agency to help with Google & Facebook ads (though be very intentional about how much you’re willing to spend here). A good agency will get to know your business and can show you realistic ROI for your investment. Once you get beyond the $10 million mark, trust the talent you’ve brought in to steer you in the right direction.
The biggest problem you’re going to face is cash flow. Most of your clients won’t pay right away, but usually, carriers expect to be paid quickly (especially the good ones). That’s why you’ll need a Freight Payment System that allows you to pay shippers however you want while also giving you access to factoring and line of credit services. That’s where we come in. If you’re interested in how Denim can help you grow your business quickly and safely, schedule a demo now.
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The flatness of the last quarter might seem uneventful, but it's actually good news. Hitting a period of stability in a market fraught with volatility suggests that we might be at the lowest point in the market's recent downturn. And as the old saying goes, once you're at the bottom, there's only one direction left: up.
Key Takeaways:
The freight market's recent stagnation may not immediately strike as positive, but it marks the first sign of recovery we've seen in a year. Although challenges persist, navigating a stable market is easier than a turbulent one.
Looking at outbound tender volumes, which refer to the number of freight loads available, there was a minor uptick in May. Despite holding steady throughout the quarter, these volumes were still somewhat higher than in 2019. While 2019 might not be an ideal reference point for normal because it was over four years ago, it can be considered a low-end expectation point.
Over the last month, the Outbound Tender Reject Index experienced minimal movement, hovering around 3%. These rejection rates, albeit low, are insufficient to drive sustainable growth in spot rates. Flatbed trailers offer the greatest potential, reporting the highest rejection rates among all trailer types.
Last quarter also saw a slight decrease (2.4%) in contract rates, reducing the gap between spot and contract rates. Compared to the rate difference in 2019, contract rates still need to go down by 12%-15% before leveling off.
Truck drivers and fleets have been hit hard by the difficult conditions in the freight market. Many are losing money because of high operating costs and lower rates. But there's a glimmer of hope—diesel prices are decreasing, down nearly $2 from a year ago! Lower fuel costs are providing some much-needed relief.
Suppliers have mostly tackled last year's inventory surplus and no longer carry the burden of extensive, unsold stock. While this may initially paint a favorable picture for the freight market, consumer caution in spending on goods directly influences this scenario.
In a surprising change, inflation decreased from 6% to 4% between February and May. At the same time, consumer confidence is now higher than it has been since January 2022. Yet, despite these optimistic signs, consumers continue to grapple with a high cost of living, evident in food prices up 6% and energy prices up 11% compared to last year.
For increased consumer goods spending - and, by extension, the freight industry - wage growth must outpace inflation. As consumers opt to spend more on services instead of goods over the summer, the freight demand could face a slowdown.
The job market is causing concerns as unemployment rose to 3.7% in May, and jobless claims reached their highest level in almost two years. As we enter the third quarter of 2023, there is a growing gap between lost jobs and the ones available. This mismatch in the labor market may lead to a decrease in demand for freight and goods in the second half of the year.
The resumption of student loan payments after 39 months of deferral will come as a shock to most households. A sudden increase of hundreds of dollars per month will force consumers aged 18-44 years old to cut back on discretionary spending. Since portions of this demographic have a tendency to prioritize experiences over goods consumption, we can expect this will produce a small to moderate headwind heading into back to school and holiday spending.
The second quarter of 2023 managed to maintain a steady pace, a silver lining in our current freight market landscape that continues to grapple with oversupply and underwhelming demand.
Carriers are in a tight spot, with rates skirting below the breakeven point, making the spot market highly reactive to even slight disruptions in capacity. This situation challenges smaller carriers, who find covering costs a tough task. Lower diesel prices provide some relief, but it may not be enough to prevent smaller carriers from exiting the market.
Historically, freight demand tends to cool down in July, but the market is straying from its usual course this year. Shippers have differing opinions regarding the outlook for the remainder of the year.
According to some experts in the industry, if there are no unexpected changes in demand, the market has already gone through the worst and is expected to recover in the second half of the year.
For now, however, it's reasonable to anticipate a continuation of the status quo, with supply outpacing demand, until our key indicators, such as the Outbound Tender Reject Index and the contract-spot rate spread, signal a significant shift in the market. Vigilance and adaptability remain our best allies in this dynamic environment.
Denim CTO and co-founder Shawn Vo sat down with Neil C. Hughes of The Tech Talks Daily Podcast to explain how tech is impacting the freight industry and what the company is doing to help make the overall supply chain more efficient.
Check out the entire interview here!
At the beginning of the podcast, Neil talks about some of Denim’s recent success, including our 850% volume growth and our recent $126 million Series B funding. They then jump into the future of digital integrations and how Denim is playing an important role in developing those tools.
Here are some highlights from the informative interview!
Shawn briefly describes how he got started in the industry and admits that he was (and still is) a huge nerd, which is how he got started in the engineering space. He built his first computer using parts he found on eBay when he was 7 years old, was building websites when he was 12, and he continues to work on passion projects when not working on his Denim projects. He still loves to be hands-on with the code and our platform.
Denim has come a long way since its early days and today, we help freight brokers and the shippers and carriers they work with send money and data more easily. In the consumer space, there are countless ways to send money, from PayPal to Venmo to Zelle, but the logistics industry is lacking a solution like this. This goal is what motivates Shawn and the Engineering team to keep creating products to make freight brokers’ lives easier.
If we can find a way to move data and money more efficiently, we can help make the whole supply chain smoother which will result in less expensive goods and time savings throughout the whole supply chain. Shawn is passionate about “better digital transformation initiatives for freight brokers.”
One of the best (and most challenging) aspects of building a platform like Denim is that there is no one-size-fits-all solution for freight brokers. In the interview, Shawn addresses this by talking about our open API system and how we are always adapting our product to fit our audience’s needs. Our revenue is directly linked to our clients’ success, which is why it’s important to invest so much time into our product. When our clients grow, we grow!
Neil asked Shawn what’s next for Denim and Shawn explained that we are going to continue to grow, help make the supply chain more resilient, and connect more data systems through our flexible platform. There is so much low-hanging fruit in the space and Shawn wakes up every morning thinking about how we can solve more problems for our clients. His goal is to eliminate the paper check altogether and continue to focus on our customers’ pain points so we can solve them.
Neil and Shawn close the interview by talking about something that has inspired them recently and Shawn shared one of his favorite books of the year, The Gap and The Gain: The High Achievers' Guide to Happiness, Confidence, and Success by Dan Sullivan. He says that the book has helped steer him away from his perfectionism and focus instead on what’s going right (the gains) versus what could be improved (the gaps).
Check out The Tech Talks Daily podcast on Apple Podcasts, Google Podcasts, and Spotify and follow Shawn and Neil on LinkedIn!
In this interview with hatchpad, Shawn talks about "building with uncertainty," which is a big concept in the startup world. Here are some highlights from the interview and you can watch the whole video below.
Shawn explains that by definition, startups are companies that are in search of a scalable business model and it's important to understand that what you initially believe might not be true. Startups (specifically startup developers) need to be open to experimenting with different technologies.
Transparency is one of our key values here at Denim, and for a good reason. Transparency is key when you are trying new things. It's ok to say "this is a bet, but this is our best guess about what we should be doing" because if it doesn't go according to plan, at least you learned an important lesson.
Shawn also explains that as the founder and leader, you only have so many chances before you lose trust with people. Being transparent with your team members is crucial for establishing trust.
In the early stages of Denim, Shawn would think about a high-level product vision, but today he thinks about a 12-18 month vision that is much more specific. This is because when you raise funding, you know where you need to be at the end of that 12-18 month runway.
At Denim, we have our 1-year vision and quarterly OKRs which we often evaluate mid-quarter to see if they are still aligned with our goals. Don't be so rigid with your product roadmap that you're ignoring customer feedback.
Tim asked Shawn about his approach to tech debt and he said he approaches it similarly to how you approach financial debt. Just like financial debt, not all tech debt is bad. Technical debt only becomes a problem when it compounds over time, which is why Shawn says that you never want it to roll over. Tech debt isn't always bad, especially when it's an investment in the future of your product.
Watch the full interview below!
Watch Now if you’re interested in learning more about how Denim can help grow your credit and help build your business, we’d love to talk.
On a few episode of The Logistics of Logistics podcast, our CTO Shawn Vo sits down with Joe Lynch to discuss Denim's story, as well as how Denim helps freight brokers.
Listen to the podcast on The Logistics of Logistics website, Apple Podcasts, Google Podcasts, and Spotify.
This was a really great interview because not only did Shawn talk about Denim, but he also shared some of his background, including his time before starting the company.
For those who don't know, Shawn's family came to the US as Vietnamese refugees. They didn't have any higher education and didn't speak English, but they worked hard and were able to accomplish what many people consider the classic American Dream. His mom owned a business and his uncle also owned a grocery store, where he used to work when he was younger.
After graduating college and studying finance, economics, and entrepreneurship, Shawn spent some time in the finance world but realized that wearing a suit and tie every day wasn't for him. He missed the creativity and "nerdiness" of coding and creating things, so he moved into more of the startup world.
After spending time at two financial tech companies, he connected with B, who at the time was working as a lawyer in New York, to see if there was an opportunity to work together. Lo and behold, Denim was born! Listen to the podcast for more about Shawn's journey and how it led to where he is at Denim today.
Denim's carrier payments platform allows brokers to attract and retain the best carriers by offering access to working capital and quick pay. Our suite of integrations also helps streamline freight brokers' back office operations, including accounting and collections.
