Burning market creating a ‘war’ for freight brokerage talent
Last Monday, Deutsche Bank analyst Amit Mehrotra said that due to customer demand, low inventories, housing demand and the federal stimulus, the current market constraints on trucking and International container capacity is expected to continue until 2023.
Shippers are moving towards a “stronger for longer” price cycle, he said, indicating that many retailers are increasing their transportation cost forecasts and that retailers are already starting to increase prices by 10%. at 20%.
This hot market continues to impact truck carriers, who need to order new trucks and focus on recruiting and retaining drivers to meet customer demand.
But these issues are also starting to trickle down to another player in the supply chain: the freight broker.
Shippers turn to 3PLs for help
While many companies route their shipments in-house, many companies look to third-party logistics providers (3PLs), commonly referred to as freight brokers, to provide the capacity and strategy to get their products to their end consumers.
In times of high shipping volume, 3PLs experience immense revenue growth from shippers looking for ways to find new truck capacity.
The pandemic has pushed this trend through the roof.
In a recent statement on its earnings report, Echo Global Logistics described the first quarter as the “best quarter in Echo history”, with gross revenues up 45.3% year-over-year. other and truck volume up 13%.
XPO Logistics has also seen accelerated growth, CEO Bradley Jacobs explained in the company’s quarterly earnings press release.
“In logistics, our record first quarter revenue of $ 1.82 billion was propelled by the ‘big three’ winds in logistics: e-commerce, outsourcing and automation. warehouses, ”he said. “We have won a considerable number of logistics activities in the first four months of this year, including a $ 1.8 billion contract with a long-time customer that extends and expands our relationship through 2032. It this is the largest contract in the history of our company. ”
In order to achieve this revenue growth, 3PLs are looking to hire Customer Sales Representatives to manage new shipper relationships and carrier representatives to seek new truck capacity to haul the growth of their shipments.
What is surprising is that the data on hiring in the transportation sector does not follow the same trends as the volume of shipments, which was generally the same in the past.
Candidates leverage their power
As trucking volumes continue to increase, freight brokers are struggling with their own internal recruiting strategies and have started reaching out to industry recruiters.
In an interview with FreightWaves, Brent Orsuga, Founder and President of Pinnacle Growth Strategies, explained how the market has turned in favor of brokerage employees.
“There is currently a war for talent,” he said. “It’s a 100% candidate market.”
He explained that due to changes in brokerage business models, candidates are taking this opportunity to make a career change.
In large traditional brokerage houses, many sales representatives are pressured into selling technology platforms.
In small and mid-sized brokers, especially those dealing with more difficult capacity issues, leadership aims to focus more on developing carrier relationships by moving from cradle to grave operations where one person manages the entire logistics experience, from a purchase. sales model, in which one person manages customer relationships and another focuses on finding capacity for available shipments.
These types of business model changes can alter the employee’s normal work experiences.
“They change the compensation plans and change the terms, including deleting accounts,” Orsuga said. “Once you’ve turned to change that [business] model, it legitimately makes no sense for them to stay there. … These employees say, “Now is the time to spread my wings and take my picture.”
Charlie Saffro, founder and president of CS Recruiting, finds the same results. Its in-house team has found that carrier sell positions have grown 18% over the past year as brokers aim to build relationships with carriers.
Some have significantly increased their salaries to be competitive. Salaries for these positions in 2017 averaged $ 45,000, but are now up to $ 70,000, according to data from CS Recruiting.
“The demand right now is greater than ever,” she said in an interview with FreightWaves. “The way we can assess this comes from companies we have never worked with that contact us; … Lots of businesses that are starting brokerage houses that don’t even have a name or a website, [even] they want to hire freight brokers. “
Unlike the trucking industry, where barriers to entry become more difficult, making it less attractive to potential drivers, the brokerage space deals with candidates who understand their qualifications and want a better experience than they do. currently do not.
“The biggest trend we’re seeing is that applicants turn down opportunities for other opportunities. It’s new, ”Saffro said. “Now it’s all about competition. These candidates are wanted and they know they are; they are in the driver’s seat.
The problem that many recruiters discover is that many brokers focus too much on finding the perfect candidate, limiting themselves to a small pool of choices.
“Everyone wants a candidate who has two to three years of experience in the industry. … They have to have a business book, no non-compete or non-solicitation, and they love the industry, and that candidate doesn’t exist, ”Saffro explained.
Retention brings candidates
Like the strategies seen in trucking companies, higher compensation is not the only way to recruit better talent. Recruiters have informed clients that focusing on areas that retain employees will ultimately lead to better hiring.
These recruiters have highlighted a few areas of concern that focus on one huge element: corporate culture.
To improve the culture, companies need to focus on their overall missions, how they hold employees accountable and, ultimately, how they value the work of their employees.
“Culture is everything,” Orsuga said. “It should be a culture of high performers. If you have 20 salespeople and only four of them actually produce, that’s a crop. It’s your brand. This means that you are hanging on to the dead weight. Why would an employee want to do this? People don’t want to be around people who are not doing well. People want to be around high performance. It is contagious energy.
Orsuga explained that what you stand for and what you hope to change in the industry isn’t just about helping shippers find a truck.
“Many of these [candidates] come from an environment where they can bring business to the table, but they can’t support the business, ”he says. “There is no career there, it’s the worst dynamic. They are looking for a vision or a differentiator. Right. You can look at a company like Flock Freight; you see their message and what they have done for carbon emissions. … They made an identity for themselves in the market and said, “This is who we are”. It’s an easy way to attract people. “
Although Flock Freight has confirmed that the candidate market is difficult to navigate, it has received positive feedback for its brand, which focuses on eliminating inefficiencies and waste through truck sharing.
“It was a challenge for us too, but we were fortunate enough to overcome it,” said Kevin McMaster, vice president of carrier sales and operations. “We have a different recruiting strategy than many people. We’re not another broker, we actually solve a totally different problem that 99.99% of brokerage firms probably don’t. I think at a high level people are drawn to us because we are actually differentiated. And it’s not a marketing ploy, it’s genuine. “
Orsuga also described how Chicago-headquartered MoLo Solutions uses its corporate culture to organically recruit future employees.
“Watch the content that [CEO] Andrew Silver does it, ”he said. “He is a great example of a leader who builds a culture through ownership and identity of who he is. … With the candidates now, it is a question of following the leader. That’s what attracts people there. Freight is freight, but when there’s a bigger mission behind it, that’s where it starts to get exciting.
In an interview with FreightWaves, Meghan Savel, Director of Talent at MoLo Solutions, explained how the company’s mission to provide the best transportation experience is not just about its customers and carriers, but also its employees.
“We regularly share our mission, vision and values in a very transparent way with the company,” she said. “We meet as a company once a week. Andrew speaks there or brings other executives to the company-wide meeting. … [Sometimes] it is carriers or customers who come to talk to us. … We [also] have a corporate email that goes out once a week called The Morning Dispatch, which features a different employee each week, and they can cover whatever topic they want. “
Savel explained that these emails cover topics such as their life stories and inspiring experiences that make employees feel valued by their company, enough for available jobs to sell.
“We got so many employee referrals and it’s organic,” she said. “When you love your workplace, other people want to work with you.”
Source: freight waves