Auto-transcribed. Speaker labels are approximate; light cleanup applied.
[00:05] Jesse Buckingham: Sweet. How you doing?
[00:07] Jacob Benbenek: I'm good, man. Looks like we're gonna move forward.
[00:11] Jesse: Yeah, I know. Thanks for helping us get that over the line last month. We really appreciate it and we're excited to get going with you guys.
[00:19] Jacob: Good. You know, busy, busy. We're kind of in a period where everything's been rebid. We're getting over the hump of the old contracts that we tried to hold as long as we could for clients.
[00:43] Jacob: Now new pricing is in, so spot activity has reduced, I think across the board for a lot of customers, but that was the point, right? Whoever redid the RFP or repriced is trying to reduce exposure on spot. We knew that would happen. So where spot activity was through the roof the last five to six months, it's just been crazy. But it changes. The industry is just constantly changing and evolving. You know what I mean? And you have to stay ahead of it. You have to balance your contracts, your spot, what the next quarter's gonna look like, what the next day, what the next week's gonna look like.
[01:39] Jesse: Yeah, maybe a good place to start is tell me a little bit about what this market transition has been for you guys and how you've navigated it.
[01:54] Jacob: Honestly, the market transition was necessary, right? I feel like the market was saturated. And customers were almost taking advantage of the providers, the carriers, brokers. So when the market shifted, even though we were under contracts, we were able to balance that off of spot activity, and also utilize some days and some windows to get the contracted freight out and leverage the spot market. For all, it's been a positive thing. Business is good, we have people knocking on doors, wanting to move freight. And Magna's grown significantly. We were kind of built for that. We had the seeds planted in a lot of customers that we wanted to work with, but whether it was pricing or just too many carriers onboarded, now they're seeing a lot of failures, performance going down. So we're getting a lot of hits, and it's all from that time we took when the market was down. Instead of just folding up and saying hey, this is gonna be not a good run or who knows what's gonna happen, we kept at it, kept building, kept working on the sales team, kept working on the technology. Because we knew we had a good product. But it was just hard to push in such a tough environment that we were in. We're not a thousand people. We're a very unique boutique that
[04:10] Jacob: loves to work with a sophisticated customer. Somebody that we can mold around. We don't want to work with people that move five, six loads a week. We want to work with somebody more strategic. And that's where we shine in those moments. Not that we'll say no to that business, of course, but enterprise accounts
[04:38] Jacob: have been kind of our niche, and being able to build teams and put really good smart people around the account, from operations to tracking to carrier, and build out that way.
[04:59] Jesse: Yeah, tell me a little bit more. I'm curious to understand, for your business, tell me more about this sort of boutique offering, what you guys really pride yourselves on, and then for which types of customers is that typically a good fit, or are you kind of most excited about?
[05:20] Jacob: Yeah, the boutique feel is really hands on. As an owner myself, I'm on the floor every single day. We have knowledgeable people at all levels of the organization making really quick decisions. The way we communicate internally is very important to us. I came from a big brokerage space, I worked in those spaces for 10 years. And when I started Magna, the dream was, I'm gonna take out all those inefficiencies that happen on a big floor and kind of bring it on a smaller scale, but then try to grow it. And I think what's special about Magna is just the true hands-on approach and the smart people driving the bus every single day. It's not just whoever picks up the phone or whoever is on an email chain, it's really people that understand freight and know how to manage and make decisions on freight. Even with tracking, understanding and being able to digest information, what's gonna fail and what's gonna be a successful pickup, that's important too. So almost like a less is more kind of approach. But we've been very efficient for the group that we have, and the revenues that we've been able to produce over the years with a small group. And now we implement tech into it and can let these people continue to still drive the bus with the efficiency tools around them, instead of scaling down everything because now we have tech. So of course we want to hire, but we wanna hire smart. We wanna have people that have skin in the game and could see the growth and could see the path on all levels of the organization. And I think that's been the goal. I know that's very hard and I know everybody says those things, but I truly believe that that's what we've been doing and that's what
[07:50] Jacob: we could definitely get accomplished as we grow.
[07:53] Jesse: Yeah, that's awesome. Being good at selecting and retaining the right people, it feels like, is the most critical. I speak to a lot of business owners where I think this is one of the most challenging things for them, actually figuring out how do I get the right people, how do I build an engine around being able to bring them in or keep them in in a way that you can start to scale, maybe not super aggressively, but even start to increase and improve. Maybe I want to go back to tell me a little bit more about what gave you the, it takes a lot to go and start a business. You'd been working in brokerage for 10 years. What was the moment where you decided that you were going to go out and start Magna? What kind of compelled you to do that?
[08:48] Jacob: Well, when the proposition of opening Magna came around, and a business plan, and even when the decision was made that I was gonna do it because I felt like I could do it on my own, after being surrounded by managers and exposed to the freight industry at two big companies where I had to answer to multiple people. I just felt like I had the knowledge, and I think most importantly I felt so passionate about the business that it was a no brainer for me. I was like, I could really do this and I know what it takes. And when I did those jobs I did very well and I love the chase and I love making sure that things were done right. So it was an easy transition for me. But when I actually decided that I'm gonna go ahead and leave the company that I was at and go start working for Magna, I took a massive pay cut. And it was really scary at that time. And I still remember sitting in a parking lot in the car at lunch and I was supposed to resign that day. It became the best decision I ever made, but to this day, I don't know how I did it.
[10:27] Jesse: What did it feel like for you in that moment?
[10:29] Jacob: I can't explain to you what I had. I had a really good position at a really stable big firm that liked me, I was going up, and to this day I still couldn't tell you or anybody how I resigned that day. I sat in my car, I know, for like an hour before I did it. And I don't know what the thought was, but there was nothing against the place I worked at. There was nothing wrong with my path, but I knew it wasn't my path.
[11:03] Jesse: How did you know that? What do you feel like was pulling you to start it?
[11:13] Jacob: Yeah, that's the thing. It's just the feeling of being a part of something bigger. And I'll never forget that day. And if I think about it a thousand times, I can't tell you the reason why. I would accept the feeling of wanting something, building some kind of a legacy, and just the true love for the business and knowing that I could do this. That was the only thing, because it wasn't the money, it wasn't anything. What came after that was just the complete pure grind for years of trying to get on the map, trying to get the first load, the first couple of months, calling off Google with four computers in a small room.
[12:11] Jesse: What did those early days look like? What was the first load that you guys moved and how did you get it? And who was that original team? Was it just yourself?
[12:23] Jacob: Yeah, it was like me and three other partners. Later on, two of them left and the last one retired and I bought them out three years ago. But the first load was for Woodchuck hard cider, which is that apple beer. I think they got bought by Pabst or something. I don't even know if they ship that much anymore.
[12:52] Jacob: But we had days where we had two loads or three loads on a board and it was scary times. Being used to looking at a board of a thousand loads, and then coming over knowing that I've transitioned now from a job, and how do we make this thing go? No carriers would work with us. Customers were just like, who are you? And honestly, just persistence every single day showing up. And then one thing after another, we got a little account out of Centralia, Illinois that were doing auto racks, and we started doing some projects for them, and you could kind of start feeling the mojo. And then I think six, seven months later we kind of got ourselves into an enterprise account that we saw big potential in, but we were like, let's take it easy, let's just take a load here or there and not even get too crazy until we build out and run some loads through the system. And then just after that things took off. But in between that, obviously that's just a short story, there was a lot of what am I doing here?
[14:28] Jesse: Were there moments where you thought, have I made the wrong call here?
[14:43] Jacob: Just showing up to the office and, there was four of us, so one guy got sick, one guy had something going on and the other one was working from home. Showing up and being in the office by myself for like nine straight hours, and calling off just a spreadsheet that I made. We didn't have any sourcing tool or anything like that. So just calling off a spreadsheet of customers I sourced on Google over the weekend. And after a while, and I think it was like a bad winter day, we had tons of snow outside, I'm like, this is pretty bad, man. I had a cake job and now I'm here.
[15:37] Jesse: With those early customers, what was the pitch that you found to resonate as a new brokerage? Was it, hey, I come from this background, I've done this at scale, now I'm out building on my own? Or would you not really share that you were new and just try to kind of, like, what was the narrative that worked?
[16:02] Jacob: Yeah, it was really about building relationships and not even like, I came from XPO or I came from Echo. It was more like, I know freight, I know your area. I understand these certain times that it could be challenging. Being able to relate with them on a personal level, but as well as understand their business and understand their seasonality in their region. And just kind of go after the right freight too, that I've had experiences with before. So unlike everybody else almost who starts a brokerage, it didn't start with accounts that were dragged over. Everything was organically scaled. So yeah, just previous experiences, and being able to, I think the majority of the part it was just getting to know the person and letting them get to know me and how passionate I am about the business is what was winning the freight at that point.
[17:14] Jesse: And with those customers, I'm curious, because it sounds like your sweet spot is really developing a deeper relationship with potentially an enterprise shipper. And I think a lot of people would sort of think from the outside that an enterprise shipper wants to work with a big broker that they can shove a ton of freight through, et cetera. So tell me more about what is not true about that, or what are the segments where that isn't true, or maybe it's just not true at all. I'm curious about your perspective on that.
[17:57] Jacob: Yeah, for me, a just in time enterprise shipper, working with a huge shop, I just don't see it. I know how the communication flows internally there. And I know how the communication flows internally here. And I know how we make decisions on freight, and I know how long it takes for people to make decisions on big floors. I know that people have gotten better and obviously there's pods and things like that, but it's still not that full touch that Magna will give you every single day. And that will go into after hours as well. We're not gonna hand you off to after hours. You're always gonna get high level throughout the whole day. And I don't believe that the big shop will do that.
[18:57] Jacob: Not that we're, and right now we're not small potatoes, but we like to be called the boutique. We joke around all the time, like if you want to go shop at Payless, go shop at Payless. But this is Gucci. You know what I mean? We're gonna take care of your freight, we're gonna make sure you get the highest quality of service. And the kind of key part to this is our operations team, right? Our operations team is not just data entry, it's not just appointment setting. They really understand freight and not only do they know what the right load looks like, they could interact with customers without the account executive just as good. Again, it's just everybody knows their role, but we're all on the same page. If I have to track on important loads, I'm gonna step in and track important loads to help out the team. There's no job that's too big or too small in here. We're all here to perform a service.
[20:19] Jesse: Yeah, it's interesting that having come from the big brokerage space, you can understand there's reasons that those businesses have set up their operations in particular ways and that can be a good fit, maybe if you're trying to operate with maximal efficiency at the lowest price point. But then there's a lot of freight that just isn't the right fit for that. And so it sounds like for you it's the stuff that demands a high level of service, just in time. When I think of just in time freight, is that some portion of every shipper's freight? Or is it more, I would imagine there's industries like manufacturing and auto parts and other stuff where time sensitivity is super important. Do you sort of see this as something that exists for some amount of freight for every shipper, or are there particular verticals that you guys focus on?
[21:20] Jacob: Yeah, obviously there's a lot of just in time. Manufacturing, beverage industry, anything that's gotta be on a shelf. We don't wanna be on an email with fifty brokers. Hey, I'm gonna need this shipment moved maybe next week. That no longer is our customer. You know what I mean? We want, okay, here's the project, here's pricing, here's the RFP. We're gonna support contracted freight, and then we're gonna balance it off with spot. We're gonna be strong in these areas. We're not gonna come in and say, hey, we do everything, right? No. We don't do that. Magna is good at dry van, lower 48 east of the Mississippi, right? Do you wanna use us for something else? That's fine. We'll give you a quote on that. But let's be good at something. Let's be really good at something. That's what we're good at.
[22:37] Jacob: I hate when I see brokers with a hundred offerings, right? You can't be good at all those things, right? So when we call a client, we're looking for dry van, right? So we're saying, again, lower 48, east of the Mississippi, we're gonna be the best broker or the 3PL provider you're gonna work with, right? We're not asking for time sensitivity. We're looking for the right sophisticated customer that needs their freight picked up and delivered on time. And I understand price is important, right? But for that customer price sometimes is not important. And that's kind of the perfect fit for us.
[23:23] Jesse: Yeah. Part of the way that you deal with this, it sounds like, is you deliver this very tight knit team, with people that can make decisions very quickly. So they've got a lot of oversight over the shipment, but presumably a lot of experience as well. And so your model is less hire a new grad and, like, are most of your team experienced operators typically?
[24:00] Jacob: No, and if they're not, it doesn't matter what experience you have. Your first day on the job here, you start by tracking loads for three to six months. Whether you're a high end sales guy or you're an account executive that's been around for a while, or whether you're a kid out of college, you're gonna track loads for three to six months. And that is important for us because we wanna show you how internal communication should flow and how quickly it should flow, what to look for, okay, and things like that. So I don't care if you got 10 years and you're a big head sales guy or whatever and you're coming in here, you're tracking loads. And if you don't like that, this job's not for you, because you need to understand that Magna operates completely different from everybody else. And the level of the touch that we give a customer, nobody else will give you. And that's why we are who we are. And that's why we're able to compete with the best, with such a little team, and be able to produce such amazing results for a small team. When you plug us into like a new TMS or anything like that that we've invested into, it just makes us faster. It just makes us even better. So now as we're plugging in tools even more and looking into things, the team's getting even more efficient. And we're able to move more freight with the same headcount. But now we're like, let's grow this even more and then start adding people and really building it out and spreading what we have more.
[26:04] Jesse: So it sounds like a lot of this is actually sort of cultural, and like this process of how do you get people to understand what it looks and feels like to have this higher level of service. Can you make it a bit more concrete for me? What are people learning in those first three to six months? What would be a scenario where you guys might deal with things a little bit differently? Share an example for me.
[26:49] Jacob: So, it could be an escalation issue. Let's say a driver's not getting unloaded or something like that.
[27:04] Jacob: But understanding why and what happened and then communicating that immediately to the appropriate teams, or learning that this shipper's like that or this receiver's like that, and then seeing our internal notes on every single shipper and receiver. Which, we as operations, their job is to not only put in loads, but one of their jobs is to understand a whole network of shippers and receivers, understand the ins and outs of every shipper and receiver. So different situations come up and it's hard for me to think off the top of my head, but
[27:56] Jacob: addressing things really quickly, and being able to recognize, I think learning to recognize ahead of time what a problem's gonna be, is what we're trying to instill into people. And a lot of people that come from different backgrounds just don't see that. It's just everything is black and white. So what we're trying to show is you got this information and then you got another set of information on the same shipment, yet you didn't see that there was something wrong or off that you could have caught, that could have prevented this, or been communicated a lot earlier. So kind of catching the bullshit, which you get a lot of in this industry. And I think if you don't read in between the lines, you're gonna fail consistently.
[28:57] Jesse: To be successful at Magna, somebody coming in, what have you learnt about, is it a skill thing? Is it mainly an attitude? And what have you learnt from the, presumably some of these, the stuff didn't work out?
[29:13] Jacob: Extremely hard working people do really well in here. It's that simple. People that are hungry, that are not afraid to work, succeed. We want everybody in here to improve their careers and improve financially every single year. We don't want you to be stuck in something that you don't want to do. Of course, nobody wants to do freight, but it should be rewarding. You know what I mean? And we wanna make it fun. But extremely hardworking people that are dedicated and that love teams do really well in here, and I really look for that every single time.
[30:07] Jesse: What have you learnt about hiring and identifying these people and sort of trying to improve your probability of getting folks? It's never certain, right, in hiring.
[30:19] Jacob: Yeah, you know what? We haven't had a lot of turnover. So we'll go through three or four interviews, but really trying to find
[30:35] Jacob: people that are maybe not in the best situations but wanting and willing to improve their lives, and just kind of whatever it takes attitude. And it's easy to spot. And those people just do fantastic and they buy in right away and they love the vision and they love the team atmosphere that we have in here. Pretty quickly we could spot them.
[31:09] Jesse: Yeah, you're sort of looking for that flame, that fire. Is there a reason that this person really wants this? And if you give them that opportunity and environment, that they're gonna take it?
[31:19] Jacob: Absolutely. For example, we have a school teacher in here. She's been in the Chicago public schools for a long time. Obviously that's not very rewarding financially, and it could be exhausting with the day to day tasks during the school year. And when she came in and she started doing operations, it took a little bit, but ownership is what we try to also preach. Take ownership of your work. Every single day you come in, whatever you put out, take ownership for it. Take ownership of your load, take ownership of even an email, take ownership of it and make sure that you know what you're putting out is truly not just what somebody else told you, but you've done everything you can to make sure that that is correct. And if you fail or you miss something, take ownership of it, right? Just say, hey, I messed up, I'll be better next time. But this person, as a school teacher, she came in here just hungry and understanding right away. Obviously the money was better and the environment was better and the vision was better. And she became the best account executive we have in here and she's fantastic. She takes her work home. She cares about every single load she puts into the system. She's got people that help her now, but still to this day she'll take loads home. Even though we have after hours tracking, she'll take those loads home that are important to the customer. She'll report on them at night.
[33:29] Jacob: Those are the players that you need in this game. Those are the players that shine, and ultimately the customers love that. Because they see what you're putting out and when you're putting it out there, and it makes a whole world of difference. As opposed to somebody showing up the next day, five AM. I thought after hours got you an update. Hold on one second, let me get you one. It doesn't work like that in here. You could always get a hold of us. You could always count on somebody that has a vision, an understanding of what's important that day to be complete.
[34:12] Jesse: Yeah, that's powerful. She seems like an amazing individual. I imagine if you could clone and get more folks like that.
[34:21] Jacob: No, of course. I love school teachers. They're the best, man.
[34:25] Jesse: I know. It's a tough job and they do really important work. What have you learnt about the structure of your teams and the business to be able to support this higher level of service quality? I know you're in Chicago and there's the Chicago model, and you've got cradle to grave, you've got pods. I'm curious what you've sort of, I feel like there's trade offs with a lot of these depending on what your goal is in the offering you're trying to bring to a customer. And I'm curious, have you guys experimented, or have you sort of always had a point of view, and what does that kind of look like for you guys today?
[35:06] Jesse: Mainly about the structure of your teams. Are you guys running split teams? Tell me a little bit more about how you structure your sellers and operations.
[35:18] Jacob: Simple, nothing out of the ordinary. We have our carrier team with the head of carrier, with the head guy running them, and then we have our operations with a head of operations, and then we have our tracking with somebody overlooking them, and also overlooking our outsourced tracking at night. So there's really nothing fancy to it. I talked a lot about how, starting Magna, we took some inefficiencies out of communication at big brokerages and just the sloppy stuff that happens. And not that there isn't good stuff that happens. Things do go by the wayside at times just because everybody gets up at four PM and it's on to the next day.
[36:16] Jacob: But there's a lot of good things that we've also learned and been able to just kind of make a little better, like a check call policy, something simple as calling in the order. You approach a load with phone calls and emails, right? And how often you do that, just having that really tuned in to where you don't miss loads and you really have a good understanding of what's bouncing early or the load is coming off or the truck is coming off. I think for everybody in this business, if you report a pickup or a delivery after the actual time, you fail. Right? Well, you have to live by that. And in order to do that successfully, you have to have a real tight knit check call policy. I get it, you got tech and every load tracking, but that's not gonna give you the answer. You know what I mean? The guy pinging an hour away is not gonna tell you he's on time, right? He could be at a truck stop, taking a break or something like that. So yes, is it helpful to have the tech and all that? Sure, but that old check call policy that I wrote with a couple other guys that we worked on is still in place and it still works around the Macropoint and the pings and the emails from the carriers. You have to put all that stuff aside because if you completely rely on that, it's helpful, sure, on a bigger scale, like when loads are picking up on time and delivering on time and it's marking geofences and everything is running smooth, sure. But you can't count on that, right, to problem solve the rest of the loads that are gonna miss.
[38:17] Jacob: The same check call policy that we've established at the beginning of this is still in place. When we book a load, we qualify it properly, right? By that, we understand where the driver's getting empty. And we understand his hours and we understand our pickup location. As tracking starts,
[38:47] Jacob: that needs to be verified almost immediately, not an hour later, not two hours later, with the driver. Because what's said when the load was being sold, it's not necessarily what's happening with the driver. So that gap of let's say one or two hours by the time the load gets sold and tracking takes over, is a huge gap where people really miss a lot of shipments, or fail shipments. It's yes, I sold the load. Dispatch told me he was empty. We're good to go. And then it's one hour, two hours, and then tracking is like, hey, can I get an ETA? And right away it's, hey, driver is still not empty. We're gonna need some more time, right? But immediately after that call, dispatch tracking should be reaching out to the driver to confirm exactly what the dispatcher told us, right?
[40:17] Jacob: So it's just like these little things. And this is just one of them, right? It's just these little things that are important. Hey, I could do 250 loads a day with three carrier reps and two operations people on one tracker. You know why? Because I'm gonna do it more efficiently than you. To some people, this is gonna be like, this is old school stuff. And they're gonna be like, yeah, yeah, yeah. Well, it's old school stuff that we've gotten away from that ultimately makes you successful in this business.
[40:46] Jacob: And when it comes to actually being able to make margins and make money in this business, everybody in this business could talk about freight. We could all talk about freight, we could talk about everything about freight. But without really understanding how to manage the market from day to day, and having your pulse, understanding the pulse of the market every single morning you come in here, like the people in here do, you're not gonna make money. You're never gonna make money in this business. We've made money in the worst markets, we've made money in the best markets. And that is just by being here every single day and understanding our spots, understanding where we're at, understanding what's good freight, what's not good freight, where to attack, where to kind of hang back and let things come to us. So sorry, I just went on a rant.
[41:37] Jesse: Yeah, super interesting. It feels like a lot of it is this sort of extreme operating rigor. You've got that playbook, but imagine someone's not sitting there looking at, okay, next step I do this, but you've got to really ingrain that culture and that behavior of what does it actually look like to do this job with high levels of care and attentiveness every single time.
[42:07] Jacob: So when we were talking about tracking, sorry to interrupt you, we were talking about tracking and you were like, well tell me a little bit of a situation that that would apply to. That this is what I'm talking about. That even that tracking policy just gives you an idea, this is how we're gonna take care of freight in here.
[42:26] Jesse: Yeah. So I'm curious, when you're communicating this to customers, that service is obviously really important. It's really hard to prove that in advance, obviously. I would expect that a lot of this is you get opportunities and then you demonstrate it. Is that typically how you're growing accounts? By saying, hey, don't take our word, but let us start moving some stuff and you'll get a sense for what this actually feels like in practice.
[42:58] Jacob: Yeah, I mean basically, everybody's calling and preaching service. Hey, we got great service and it's one point of contact. Like I'm telling you, because I truly believe in this and I truly believe in this company and I think Magna is something truly special. It's just that was our problem for a long time.
[43:26] Jacob: How do we get that? How do we get the shipments? How can we show you what we could do? This is, we know what we're doing. So yeah, I think the pitch is a little different. I'm not on the phone as much as the sales guys are, but I think for the majority of the part it is like, we are, don't be afraid to say, we are a very good boutique. You know what I mean? Like we're gonna take care of you. We know what we're doing. We have good drivers. Give us a shot type of thing, and let us prove it to you. So but it's hard. It's hard to do in a saturated market that it was. Like how do we get our name out? How do we, with very small or no social media presence, how do we get out there and really prove ourselves? So yeah, those have been the challenges for Magna.
[44:34] Jesse: When we chatted the other day, you guys are moving dry van freight, you're kind of working with the same commodities that the industry is. And as I understand it, fraud has not really been so much of an issue for you guys. And I'm curious, maybe you're just like, well, it's just never been an issue. But to what do you attribute that? Or is this something that you've actively made a point of addressing proactively? Or what do you, I mean it is an amazing position to be in.
[45:07] Jacob: Yeah, no, and knock on wood, obviously, we've been fraud free for fourteen years since inception. I think it started early, before the compliance tools came out. We were always double checking everything and kind of going through a list. And as the years went by, that list grew of things to look out for, and suspicious activity, or emails, or different things. But everybody's trained on it and well versed on it. And then you brought in your RMISs and your Highways and all the reporting that's out there. So once we tied all that in, what we had in place worked really well. And it was just kind of like smell tests everybody would go through. We've even gotten pictures of license plates and IDs before this whole thing even was happening. So we were doing our part, and then everything else came that helped us even more pinpoint those carriers. But I think it just comes down to, we don't, I used to get so many calls from fraudulent carriers. I don't even see them anymore. People are like, you know what? They haven't been calling us at all.
[46:47] Jesse: Yeah, folks that are trying to commit fraud, they know how to try to find the path of least resistance, right?
[47:00] Jacob: Yeah, no, but I think it's just the care of qualifying a carrier, right? I think you can't have just anybody book freight at any time of the night without deeply looking at it, or having somebody that's had some experience or understands what he's doing. And that's how fraud happens. I think a lot of the mistakes happen just by pushing sausages through the factory too fast. If you just slow down, not only do you save yourself a huge liability, but you get better service and your customer is more satisfied. So it just takes a little bit, and it's five or ten seconds that you could have done to prevent a catastrophe for yourself and the company.
[48:06] Jesse: One of the things I've heard from other brokerage leaders is that sometimes there's an incentive. You got a carrier rep who's commissioned on booking the freight and it's kind of easy to cut corners. Is there anything, is there an incentive beyond, I mean people want to do the right thing, but is there a structure in place that has allowed you to maintain that level of discipline around it? Are there financial repercussions? I'm sort of curious about that.
[48:38] Jacob: No repercussions, but our carrier reps get paid on loads that lose. Every load that loses, it could lose a thousand dollars or it could lose ten thousand dollars. To them it's gonna look like a load that made a hundred dollars. So they're never losing money on the load. So they're incentivized. Listen, the freight's give and take and a lot of people don't understand that. You have to give a lot and then take some. And then you have to give a little and then take some, right? You're gonna have to make investments on freight. If you have discouraged people calling on that freight, your company's not gonna be successful, right? Because nobody's gonna book that, or it's really hard to push through an organization to book losers. So yeah, their vision is if I book this thousand dollar load, I'm booking a hundred dollar winner. It's the same mentality. So I'm gonna do a good job.
[49:38] Jacob: Every single load is important. It's not just slap something at it because it's losing a thousand dollars and my boss is yelling at me at four thirty and we're trying to get out of here. This load doesn't have money in it. It was terribly misquoted and now I'm getting yelled at because it's not getting covered. Just throw a carrier on and walk out the door. No. We're gonna work on it just like if it was a winning load for you. What happens to Magna on the backside, nobody has to worry about that. Everything's gonna be fine, because ultimately what matters every single year is the bottom line, right? It's not what happens on Friday or Monday on any given day of the month. It's the bottom line.
[50:23] Jesse: What about, is there ever an incentive though for a rep to, you know, it's a hard to cover load and they're like, there's some things that look a little shaky here, but I'm just gonna book it so I can get, how do you prevent that culture from happening, or that sort of behavior? Because it sounds like you guys have done this. How do you prevent people from booking shitty carriers where they're questionable? Because sometimes things look fishy but maybe they're not, you know?
[50:55] Jacob: I think that's just them holding themselves accountable. And honestly, if somebody did that in here, they're not the right fit. You know what I mean? So if they are booking a load, a lot of times when we take options in, right, we'll discuss. We'll discuss, hey, and especially a load that's got high margin or low margin or whatever, but there's a lot of activity on it, we'll discuss. Let's say the price for Chicago to St. Louis, everybody was calling in and it was twelve hundred dollars. And then our preferred carrier that wanted the load is at thirteen hundred dollars. We're gonna go with the preferred carrier. You know what I mean? And it's not, especially, I'm not talking in a situation of like a must get right away.
[51:54] Jacob: We're gonna go with the more expensive option every single time. And this is, I think what we all realized in this room a long time ago is, if we all work together and work smart, good things happen commission wise and financially to everybody in the room. And that's the goal, right? It's like if we all do this right and we all treat these losses and these winners the same way and we make the right decisions every single day, we're always gonna improve financially. We're always gonna grow and we're always gonna be on the path to success.
[52:38] Jacob: But if we start cutting corners and if we start doing things against each other and we don't hold ourselves accountable, we're not gonna go too far.
[52:48] Jesse: Yeah, it seems like a high trust and a long term orientation. Jacob, we're running out of time here. Thank you so much. It's been a really fun conversation and I love the, you've got just a real clarity of the culture and type of business that you're trying to build. And a lot of it is this sort of discipline and rigor about doing the fundamental things and caring about quality.
[53:23] Jacob: I appreciate it. Thank you so much and thank you for taking the time to talk to me. This was awesome. And then we're doing Vooma, so let's go.
[53:32] Jesse: Let's go. I know, we're gonna get you live.
[53:36] Jesse: Thanks, Jacob.
[53:38] Jacob: Appreciate you, buddy.