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June 22, 2023

Episode 2

Leveraging Highway to Improve Carrier Competency

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June 22, 2023

Leveraging Highway to Improve Carrier Competency

In this episode of Future Ready Freight, AJ DeGroot, VP of Operations at Mariner sits down with Michael Caney, Chief Commercial Officer at Highway. In this conversation, AJ and Michael discuss the importance of carrier identity, capacity visibility, carrier network analysis, updates and integrations with Highways system, how you can hack the onboarding process, and more.

Guest

Contributors

AJ DeGroot

VP of Operations, Mariner

Michael Caney

Chief Commercial Officer, Highway

Tags

Technology
Carriers
Logistics
Transportation

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Read the Q&A Below:
"That's why we tightened up our rule sets. Our reps do not tender a load to a carrier if their email address does not match what's on file in Highway. No question about it. Don't ask me." -AJ DeGroot

DeGroot: I think the best way to start here is where did the highway come from? What was the idea? How did you get started? Let's hear about it.

Caney: Yeah, that's a great question. So I would say that highway is the culmination of a couple of different people trying to solve a problem in a couple of different ways. And here's what I mean by that: Jordan Graft is our founder and CEO. Jordan, before Highway, was a serial entrepreneur who started a couple of technology companies and scaled them and sold them and he started the Triumph Pay business unit inside of the Triumph banking organization. In doing so, he became friends with a lot of us freight brokers. I've been a freight broker for 20 years - like this is my 20th year of doing this. I've been two years in tech and 18 of it as a freight broker. And so there were two things that Jordan noticed. One, in his own troubles at Triumph Pay, there was corruption, there were bad actors and fraudsters trying to get in. He also noticed that all of his friends were struggling with this whole digital connection piece. You know, the thing that we've been talking about in the business for years is like, digital freight matching and digital connection, and book it now, buy it now, whatever. And we struggled with that. I mean, I think it's fair to say that none of that has taken root the way we thought it would. So Jordan's thesis was that this is an identity problem. So, coming from a finance background and banking background, he said: the whole world runs on this now, your customers proof of stake. And brokers and motor carriers are just filling out packets and going at it. No wonder they can't digitally connect, because there's a lot of fraud. So how do we fix the fraud problem? And that's what came from Jordan. He is a dog with a bone when it comes to a problem. Like if he sees something, he doesn't really rest until he figures out how to solve it. And so that was the impetus, right? He got together with some brokers that wanted him to fix this problem, he had the ability to do it. And it just kind of went from there, man, and we just kept iterating. I would say that my favorite thing about our company is not only do we have exceptional technology, we really pride ourselves on listening to customers, like talking to freight brokers and finding out what they need, rather than trying to be the smartest man in the room. And so that's that's kind of that's, that's the seed. And that's kind of where we are today.

DeGroot: Yeah, yeah. So here's what I love. Okay, so we've talked about onboarding in the past and that kind of stuff. So I want to hear about, you know, it all starts with carrier identity - tell me a bit more about it.

Caney: Yes. Like I said, I've been doing this for a hot minute. And even I thought about it the wrong way, like, how do I get carriers into my network? And we've actually taken a half a step back and said, maybe that's not the right way to think about it. Maybe the wrong way to think about it is to get the packet online, get a cert, everybody gets in, because then you have this big house with a lot of people in it, and you're trying to figure out how to get them out of the house. It's like, whoa, wait a minute, what if we stopped them at the door? Then the onboarding piece becomes really easy, right? So the way I explain to people is this: when you and I interact with the world, we pull our phone out, and we hit sign-in with something. Facebook, Google, Amazon, or Apple ID, whatever. To the point that it's actually really strange if we have to go to a website and fill out a form and create a password and enter a credit card - that feels old because when we do it we just sign in with whatever all the metadata is there. It's secure, and we can interact with the world that way. So when we think about onboarding, we say no, start with carrier identity. So carrier identity at highway means three things. One, who is the human being that's coming to Mariner and opening a digital session? Where do they live, where do they sit? How are they going to authenticate? The second thing, are they actually a motor carrier? Or are they pretending to be somebody with, you know, jackwagon? Like, there is no loadmariner@gmail.com? That'd be really weird. So we would shut them down, right? You can't come in with a Gmail address. And the third piece -and this is what we're really proud of - do you actually have to operate the equipment to do what you tell Mariner you're going to do? So we operate, and we'll probably get into this concept of what is your physical and digital footprint? So think about it this way, when you or anyone else goes and gets their credit report, you don't just get to like fill information out and rock and roll. We are going to ask the carrier things we already know the answer to and we're going to force them to prove who they are. And so much of that has to do with equipment. So we are fanatics about tracking equipment, its movement at the most granular level possible, which is, who owns it, where has it been, what's the VIN? So we want to get as granular and as transparent around that as possible. So that's, that's all about your identity: Who's the human? Where are they? And do they have the equipment necessary?

DeGroot: So this is certainly tech play, obviously, right? We love the technology. There's security and identity protection. Well, we can't forget about the relationship piece. It's still at the core of freight brokerage, there's still a relationship from a shipper to broker and a broker to carrier. What I found, and maybe you can talk about this a little bit, is that Highway actually helped us enhance our relationships with our carriers, because of this identity piece. And because we have the data and the platform to understand what what they want to run and where they are located. We found that we can actually offer better freight to carriers after we've brought them in via highway because of that.

Caney: Yeah, there's confidence, right? We see you run operations here, and I've run ops. And there's a point in time where we quit teaching people how to cover freight, and we taught them to look at six websites and ask a whole bunch of questions and try to fish out. Like, why are you trying to get me a different office number that has nothing to do with covering load and has nothing to do with building relationships? Right?

DeGroot: Right. I want carrier reps. I don't want detectives.

Caney: Exactly. But one of the things that we sell, as a freight broker, right, is the career path. And we're bringing young professionals in with little training, and we onboard them. And, like, that's hard enough. And then we say: Oh, by the way, like we have these great systems, and TMS 's and all this stuff. But before you can load a carrier, there's like seven steps - you have to follow a complex decision tree. And if you miss one of them, a load can be stolen, and we're gonna fire you for it. That's dumb. Like, there are better ways to do that. And it wears you out, right? Because the highest and best use of your time is investing in people, not playing an investigator. So go back to the KYC piece, and "know your customer". How much easier is it for a carrier to have peace of mind and say, I know that all of these carriers I'm calling. The other thing that we've short-cutted is what we say: Hey, you loaded this carrier five times from Dallas to Houston, call and ask them what else they do. We build those scripts ? What if they could just look at the highway and go: Oh, well, this carrier has 30 other trucks and this is where they go. And I can look in the Mariner  Network, now I can focus on this motor carrier and help them run more efficiently without having to call and interrogate them, which most load planners, they don't necessarily want to do right? Think about human beings, right? Human beings want to feel valued and known to talk in terms of the other person's interests, like Dale Carnegie, How to Win Friends and Influence People, right? We want to empower brokers to know about their carriers. Right, because the best brokers really do care about their carriers, they really do want to help them to tight business and the best brokers want to work with carriers in a better way. And we help.

DeGroot: Absolutely. And we've found a ton of value. Maybe we can talk a little bit more about capacity visibility. You know, we touched on it just a hair, but maybe if you could go a little deeper on the capacity-visibility piece and some of those features.

Caney: Yeah. So there's many times when you're shopping for freight technology. And I think what we found is that in technology, there's never a singular answer. So when we think about visibility, we think about being transparent, right? And we think about, like confidence, like, is there transparency? Can a carrier or a broker be confident? And so there's a couple different ways you can gain visibility. One is just physically and historically, whereas that equipment gone?

DeGroot: In the old school way of thinking, it's, it's about an inspection. Okay. But traditionally, those inspections have been hard to find where they occur. So we know where the state that it was inspected, what type of inspection it was, if there was a violation, you know, who dropped the county level, you know, the right number. So just because you have a number of inspections doesn't mean you've been inspected in a certain area. So Highways brought some visibility to the inspection piece, too.

Caney: Yeah. So for a long time, people just thought about the number of trucks, the age of authority, and the number of inspections done, right? There's bad actors out there that know that they can go by an MC number, and they can run it clean for 3, 4, 6 months? And they're going to be able to get in those basic onboarding.

DeGroot: We've even heard of carriers driving empty around weigh stations trying to get inspections - just to get that inspection on their list. It's really popular. Especially, like, in local markets and dray businesses, like dray carriers will inspect the same truck five times.

Caney: Yeah, we get that. We're seeing all this, like they have figured out how to hack the onboarding process, right? So you see a guy with four trucks and enough inspections getting into networks. And then we can get into the load limit a little bit too. But, you know, back to what we're saying, it's about equipment visibility. If the carrier has what we would call a digital and physical load footprint, we're not interested in what the carrier says - we're interested in what can be proven. Okay. So we have a couple of different ways that we can allow a carrier to connect with a broker and say: hey, here's my trucks, here's where they are, here's a VIN. I'm going to prove to you that I have equipment, right? And so we're going to fail that carrier and challenge them and say: Look, man, we know one of two things is happening here. You either don't have the physical and digital footprint to support your claim, or you have a scheduled auto policy, and you have way more trucks being inspected than you have listed. Those are typically the two instances where you want more information.  If we were to go grab a carrier, you know, based in Dallas with many warehouses and a terminal in Mississippi, like we can see that truck. We don't need them to prove anything. Versus a four-truck carrier with four insured autos with 20 trucks being inspected - that's a problem. Who's insuring those 16 other trucks right? But we have a way for a carrier to self-heal that.

DeGroot: So, you know, one thing I'm sure you've seen is: hey, this is a one-truck operation that's got five dispatchers. That doesn't make any sense. And Highway really kind of exposes those brokers. We went as far as to shut down everybody and made every carrier re-onboard when we switched over to Highway.

Caney: So may I ask you? Like, one of my favorite things to do is sit with brokers, because brokers are my friends. What's it been like for you? Did you find something surprising? Did you find things that weren't so great? Or something was better than you thought it would be? I really enjoy learning about the experience from folks that have come on recently. Plus I specifically sought out Scott early, because we've been friends fora long time. I specifically wanted to get this in the hands of Mariner because I know kind of the way you folks are thinking about the future. And so I called you guys, asked you to beat it up, to help us make it better, that sort of thing. So I'd love your feedback.

DeGroot: Sure. Yeah, I would say the first thing is, with the move to Highway, was it forced us to analyze our carrier network. What we were able to do is kind of take a step back and say, here's what Highway recommends. And here's why. And everything else that's in our carrier book of business is just kind of noise. And it really kind of took that push from Highway a little bit to get us to take that time and do that carrier analysis. So it's been super helpful there. And we move and work with our carriers with confidence which is huge, because it's just one load that can get you sometimes.

Caney: Yeah, that's the one-by-one load story I tell. I was running a business in Chattanooga. I took the numbers presented by the business president. I had it for three months when I lost my second biggest account. Because there was a carrier railing the loads, and they did a really good job. They served it really well. They had this trick where they were moving the bolt seal around. Highway would have failed that carrier. Highway would have seen inspections in Chicago and California and nothing in between, and not enough equipment to actually do and hit the relays that they were saying they were gonna do. Oh, it was a huge deal. And it's one carrier man. And it was my best career rep. He missed one step. And looking at the website, it felt like it cost us a million dollars a year. It's a big deal. It's not even a bad decision, it's an accidental miss. So we believe in automating that for people. Like, if we can get the computer to do it, take the mental load off the human. That way humans can do what only humans can do - relationships.

DeGroot: That's why we tightened up our rule sets. Our reps do not tender a load to a carrier if their email address does not match what's on file in Highway. No question about it. Don't ask me.

Caney: Since you mentioned email addresses, one of the things we started seeing was that we were really good at what we call building a firewall around your network. Like you don't operate your cyber network without a firewall. We are the firewall for your carrier network. And then what we were seeing is that, every now and then, somebody would hit a carrier rep's inbox, and a carrier would circumvent a process and just send something to an email. So we built our firewall out with a plugin. So if you guys don't have it yet, we're getting approved in the Microsoft Store, it's going to be available for download soon, a few people have it on beta. So what it does is it lives in your inbox, and there's an extension and it's Highway in your Outlook. So if somebody's coming in, and they change one letter, they change the "i" in Mariner to a "1", it's gonna flag that and say: this looks fraudulent, it doesn't match. It shuts it down in the inbox. If there's one thing I do everyday, it's learn something. And our mission is to take customer feedback and build a solution to keep shutting [the fraudulent carriers] down. Because until we clean it up, you can't really optimize your network.

Degroot: And there's a ton of value added there for all kinds of different fraud, not just inside the freight industry.

Caney: If you think about it, small motor carriers, the ones with less than 10 trucks are the ones being targeted. So Highway does as much to protect that carrier as it does the broker. If you are a shipper and want to focus on the brokers you want to do business with, we want to cut the noise out from load boards. If you're a carrier, come claim your identity on Highway, like it's you get a much better experience. We are building a better overall experience.

DeGroot: Everybody wants to talk about integrations and APIs and all that good stuff. What are some of the upcoming integrations that you have? And what have you found successful? Maybe integrating with some of your various customers and vendor partners?

Caney: The challenge I have at Highway right now is we've grown so fast, and are continuing to grow so fast. We have a lot of integration requests. And so we're focused really heavily on the ones that add the most value to freight brokers. So. squarely, we're focused on integrating with the largest TMS's and making sure that those are very, very stable. And so all of those are in a kind of "version-one" integration. For you guys, we're scoping how we allow Mariner to use classifications? Then how do we feed that classification information into the TMS so that the workflow then becomes automated? So our number one focus is TMS integrations, getting everyone live and stable on their biggest and favorite TMS, and then iterating a kind of "version-two" with what additional data we have that other providers don't. The second piece is, there's a lot of exploration around how a carrier wants to interact with brokers. So I can't say that we're releasing anything soon. But here's some of the things we're curious about: should a carrier be able to buy per-transaction insurance on Highway? We monitor the insurance certificate, we show discrepancy and scheduled autos. So there's a lot of curiosity in the marketplace just around what else could happen here. Now from a partnership perspective, I'd be remiss if I didn't talk about load limits. That's our partnership with Triumph Pay. it's a partnership that allows you, as a 3PL, to know not just how a carrier is interacting with you, but how they are interacting with the marketplace? And what decision do I want to make based on what I see about them in the broader marketplace? And that's real data, imported data. So that partnership with Triumph Pay is really exciting.

DeGroot: Okay, so we're talking about integrations, what type of integrations might be in the works with insurance companies? To set this up, we know our COI process can still be a little bit antiquated. You know, we rely on a human to send an email. Is there a world where Highway might integrate within a large insurance company for automated certificate of insurance? 

Caney: Without having an entirely other podcast about? For everybody listening, I know [so] much about freight brokering and [very little] about insurance - so that's my disclaimer. There's a lot of layers in that business, man. So you've got insurance markets, which is like travelers right, and then there's market. And then you've got agents, right? Like a McGriff or a Reliance, right, and the agents produce a certificate. And so what we're finding is there isn't one place to go where all this lives and there's all these "if-then" statements. Like, well, it's an exclusion if this happens, but it's not an exclusion if this, right? And so I think what we're really focused on, as an industry, is getting the limits right, getting the equipment right, and just staying up to date on those servers as much as possible. And that's kind of the best we can do right now. We'll try to automate our certificate management process as much as possible, but integrations with with insurance markets directly are really difficult. So I went to the cargo theft conference that happened here in Dallas a few weeks ago. And what I would tell you is that insurance companies, because of the problem, they don't want to pay claims, right? And I go to this conference, and the message was: fraud is bad, debt is bad, and it's getting worse. And I kept waiting for the solution. There wasn't one. It's a statement. So what I would say is that the insurance markets are getting very curious about how they can better work with a platform like ours to help freight brokers. Before Highway, everything was just about getting an insurance certificate and checking that box. So it didn't give any promises. But man, the conversations are fun and the industry is realizing that there needs to be more collaboration. Let's think about that in Highway. Like one of the things that we say to brokers is: you're the network. We, Highway, really wants to disappear into the background. Once the carrier and the broker connection is established, like, if you never come to our website again, and we can feed everything to your TMS, that's fine. Anything we can do to better optimize that network, optimize that connection. That's what we're about.

DeGroot: Right, if we're talking to your brokers out there, 99% of your brokers want to work inside of their TMS, and that's primary.

Caney: Yeah, and as a broker - screen fatigue? Brokers don't need another website in another tab.

DeGroot: All right. So let's do this: let's get your crystal ball out. So the data you aggregate, the number of carriers that you see come into the platform, market conditions, that kind of stuff in mine. Let's throw that all together. What do you see in the next 6 to 12 months or so? For the freight industry? For market capacity?

Caney: I mean, every time I try to make a prediction, it's wrong. I don't need anybody on LinkedIn telling me I'm wrong. But what I do think: there will be some type of correction, right? We've seen that a lot. Is there a driver shortage? Or isn't there? I don't know, man. You know, we saw all these new MC numbers -where they new MCs, or were they just owner-ops leaving the big five? I don't know, I do think a couple of things will happen. I think as Highway continues to grow, and more brokers become really serious about managing security, you're going to see the market split into transparent, safe, digitally-enabled markets and then pockets will emerge where bad actors can still operate. Here's what I tell you won't happen, because somebody told me they think fraud is gonna slow down, like, do you think criminals that have been making all this money are just going to back off? No, this is organized crime. They're going to keep trying to find vulnerable places where they can do their bad things and make money. They're not going to stop, and as freight keeps going down, and it's not as easy to just get in somebody's network, that crime is going to get worse. And so you're gonna see people come to Highway, get that all cleaned up.And I think you're gonna see the fraud gravitate toward those pockets that don't get cleaned up. I'm hopeful that we can help purge a lot of that crime from the marketplace.

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