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GUIDE TO HIGHER PAYING FREIGHT By: David G. Dwinell, Master Broker

Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

WELCOME My name is David G Dwinell, I am known as an “EXPERT” in transportation, by the US Justice Dept and a lot of Mutual Fund Managers. (Visit transportationexpert.com) to see details. But Today, I would like to introduce you to the right

way to load higher paying freight.

First, know that I have been training Transportation Professionals in my School since 1987. I have been a Motor Carrier Contract and a Licensed Broker since 1981. I have authored several Text Books on the subject, (unlike other Schools of Brokering who use newspaper clippings as their text book), that have helped over 49,000 other trucking companies and drivers expand their businesses. Transportation Professionals such as drivers, owner operators, trucking company owners, traffic managers, warehousemen, growers, lawyers and doctors. Those attending achieve the MASTER BROKER CERTIFICATE. My services and products have been well received since 1987. Not 1 copy of my Text Books have ever been returned as “Unsatisfactory”. I was told recently by a School Graduate (Class of 2001), who was taking the TIA “Certified Transportation Broker” course about Brokering, that our Master Broker Training programs were far more comprehensive and complete than the TIA - CTB product. He ought to know, he came to my School after years as the “Brokering Manager” for Schneider Transportation. Know this, as a BROKER, for 25 years, I have never had a Claim against my Surety Bond, and I have paid all of the Motor Carriers brokered ON TIME. I still have my original Shipping Clients, 95% of which I have never physically met. There are few people who can make this claim. If you want to learn to do it right, come to Arizona for a week, and learn how easy it is to succeed in transportation. Let me describe the TRANSPORTATION MARKET. It is fragmented into 300,000 plus Motor Carriers, Contract, Common, Brokers and Forwarders. Over 130 people a day get new Authority and Licenses. 90% of all Brokers, also own trucks, 4 Million CDLS, 20 Million pieces of equipment. Trucking is turning into a Commodity. In my 90,000 plus freight brokerings, my average Freight Bill to a Shipper, is $880 (retail Freight rate), and my average payment to a Motor Carrier is $755 (wholesale freight rate) with a Commission Margin of 14.5% or about $125, for the Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

last 25 years. @ 5 loads/day, that is Yearly Revenue of $1,144,000.00 and a commission income in excess of $169,000/yr. Today, the current state of affairs in the Industry can be classified as a “SELLERS” Market. There has never been a better time to get into trucking. There are far more Loads in most Major Cities than there are TrucksTo Haul Them. Owner Operators are getting their Authority and changing to small Trucking Companies, rather that work for the Truck for a Buck people. You know who they are! they are mostly the largest Motor Carriers in the USA, like the one in Phoenix, or Chattanooga. They are losing Owner Operators in droves, and are unable to attract new Owner Operators, because there is far more money in Today’s Freight Rates than ever before. Did you know that in 2004 the Big Carriers averaged 136% owner/operator turnover rate. In fact, some sell their trucks to as many as 10 new and different owner operators each year – Legally, using the same base plate over and over. These large Trucking Companies are called TRUCK BROKERS. Their market is you, the small helpless truck owner. Well this BOOKLET is designed to empower the little guy. Transportation in the United States is the Largest Industry IN THE WORLD, generating almost 1/3 of the Gross Domestic Product Income in the USA. Trucking alone generated almost $700 Billion dollars in 2004, an amount that is larger than 100 other Countries Gross Domestic Product. No One player has more than 3% of the trucking market. This means opportunities for the Trucking Entrepreneur.

This Guide is to assist the reader to load HIGHER PAYING FREIGHT using our Learning Programs KNOW THIS: ALL SUCCESSFUL TRUCKERS HAVE A BROKERAGE. You must learn to Broker to be an effective and PROFITABLE Trucker. A Trucker and a Broker both need to know the Status of Supply (trucking capacity) and Demand (orders from Shippers) before quoting freight rates to shippers or accepting a broker’s freight rate. If you are the last Truck in LA on FRIDAY ; what should your freight rate be?

Most Frequently Asked Questions: I want to find a reputable Broker to work with - What makes a good broker? Brokers have Credit Ratings. Check their Credit before loading with COMPUNET CREDIT.com (They publish the Gold Book of GOOD Brokers). I guess my Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

question to you; why do you want to work with a Broker, when shippers are having a difficult time finding Truckers and you can work with them - direct? Learn to BROKER and when you work with shippers direct, they will offer you more loads (Truck Load and LTL) than you can truck yourself, so you need to BROKER the excess out to other Motor Carriers. That is what our School is all about – we will show you where they are, what message about your trucks and brokerage you should give, and the answers they will need from you to work with you direct. If I get my own Brokers License can I Broker loads to my own trucks? Not without having Motor Carrier Authority for your own trucks. Licensed Brokers are not allowed to hire Owner Operators, as they do not have “AUTHORITY” only a “License” (visit FMCSA.DOT.GOV - 49 CFR 370 & 371). Brokers are not a “MODE” of Transportation according to DOT. They CAN NOT issue a “BILL OF LADING” or declare an interest in a Cargo, or take possession of FREIGHT- ONLY an Authorized Motor Carrier has the power to do all that. What you need is to learn to broker, so when a Shipper (the ones we help you find) offers you 5 loads for your 2 trucks, you haul 2 and broker 3. You don’t want to give the loads back, because your New Shipper will perceive you as being to small to really help them. How Do I get my own DOT Authority and/or Brokers License? Simple, visit www.fmcsa.dot.gov and complete the OP-1 and pay $300, all on line. Can I make a suggestion, Call OOIDA (the independent and owner operators association @ 800 444 5791 – ask for Joe Shewmaker ) They are the Nations only Organization who will actually look out for your interests, and help you succeed. I want to own my own truck and be an Owner/Operator Caution: What comes first? the CART or the Horse! trick question- NEITHER. Cargo comes first then Horse and the Cart. Buying a Truck and Trailer does not insure success in the business, in fact, in Today’s market place, it’s a recipe for disaster – THE CORRECT ANSWER – get the cargo - then go get the Truck and Trailer. Truckers who go from broker to broker – only receive “WHOLESALE FREIGHT RATES”. So they go BROKE. Motor Carriers who sell and market to Shippers, FIRST, then go trucking, bill and receive “RETAIL FREIGHT RATES” direct to Shippers, avoiding broker loads. Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

SITUATIONS TO AVOID at all costs. Today’s Huge Motor Carriers… It is True, that Truck Brokers – those with Motor Carrier Authority and a Brokers License (the ones who hire Owner Operators) tell you that their share of Revenue is about 25 to 30% of Gross Freight Billings to Shippers, but the Truth is more like 50% of the Gross. You get all of the Liability and expenses they get all of the Profit. Example: You are coerced into an “own a Truck for a Buck” and become an Owner Operator. They pay you 84 to 95 cents per mile (wholesale) while they are billing on average $1.75 (retail) to their shippers. 70 to 90 cents a mile is a lot to pay for a Dispatch. In other WORDS, you are screwed. In today’s marketplace, where instant Internet Communications make it possible to talk to shippers Direct, even while your in your truck, Your Own Authority is far more profitable, we teach you how to be profitable. You will recover your Investment in school in a few days of leaving, and the best part is – IT is TAX DEDUCTABLE!

LESSON 1 TO BE A SUCCESSFUL TRUCKER and BROKER, you must change the Transportation Definitions you learned first. First – the place where you have been getting freight you always thought was the SHIPPER ! - well in actuality The place where you pick up is the “CONSIGNOR”, the person who creates the Bill of Lading. The SHIPPER is the person paying your FREIGHT Bill, according to The Negotiated Rates Acts of 1993 (The Law which requires a written contract between a shipper and motor carrier)– the Shipper could be the Consignor, The Consignee (where you deliver), or neither. - as you will note in the DVD/VHS Tape. Our School Teaches you FOB Origin, Destination, and all of the other terms you will need to be an effective trucking company to work with shippers. Again – The SHIPPER - the person who pays your freight bill – could be a broker too ; The CONSIGNOR, the place who creates the Bill of Lading , where you load; The CONSIGNEE the person who executes the Bill of Lading at unloading.

AGENT – a force for another; To be a successful Broker, you cannot be an Agent of the Shipper, or an Agent of the Motor Carrier, as your License requires you to be a Middleman, not promoting the Interest of the Shipper over that of the Motor Carrier. Brokers may not file a Tariff or quote a Freight Rate from a tariff, or create a Bill of Lading. The Freight rate they quote is the Market Freight rate. (like a real estate agent, they will only tell the homeowner what his house can sell for, its not about what the homeowner wants for his house)

Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

Discussion Most Brokers think they work for the Shipper and their Job is to beat Freight Rates down. In fact, just the opposite is true. Technically, the Broker must protect the interests of Motor Carrier, in that he collects the money from the Shipper on behalf of the Motor Carrier. An example of a recent Court decision actually creates the Freight Broker as a “FIDUCIARY OF THE MOTOR CARRIER” (example - see the Worldpoint Case (part of the Brokerage Operations Manual, he main TEXT BOOK of the Arizona School). As a result of this Federal Court Decision – (Seattle, WA broker bankruptcy decision), several small motor carrier’s, burned by Broker Bankruptcies, have petitioned the State District Attorneys ( in the County of Brokers Residence) to seize Brokers Assets, and personal assets such as Brokers home and bank accounts, until the matter of the Brokers’ Fiduciary responsibilities, are clarified. This has induced several bankrupt Brokers to pay instantly out of their own pockets because they know they would be jailed after failing the State District Attys Fiduciary Test. Real Estate Brokers or Lawyers are charged and jailed after they abscond from their ESCROW accounts another persons monies. Ask any Real Estate Broker what would happen to them if the above took place. The same could be the fate of Freight Brokers who abscond with Motor Carriers Money. I assist my School Graduates in recovery of their funds from rip off brokers. Come to School and learn to do this for yourself. This Decision “makes the Motor Carrier and his Bill of Lading – GOD. As a Motor Carrier, every consignment you take and the Bill of Lading should show your Motor Carrier Name & MC Number, no other. The Law is very clear about Brokers who issue a Bill of Lading. IT IS FORBIDDEN. (see 49 CFR 370.7 and .9) . If you are not allowed to change the Bill of Lading, Deliver the Load on your own Bill of Lading (make out a new one) and get the Proof of Delivery on your own Bill of Lading, not the Consignors. If the broker refuses to pay, call me, I will help you collect your due monies after I point out the law for your truant Broker. Note: most Motor Carrier/Broker Contracts are set up as a Motor Carrier /Motor Carrier Contracts. The originating Motor Carrier says he wants to broker the load to you, but keep his interest in the Cargo, he is actually Contracting you as another Motor Carrier – NOT A BROKER. (90% of Motor Carrier -Brokers don’t really know the law or their responsibilities to you their subhauler. In other words, a Licensed Broker or Forwarder who is not a Motor Carrier has no business creating a Bill of Lading or declaring an interest in your Cargo. While that Cargo is on the Highway, it belongs to you and your Insurance Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

Underwriter, until you give up possession to the Consignee, after the execution of the Bill of Lading. In fact, you do not have to give up the original Bill of Lading to anyone without payment first. You can submit a Delivery Receipt (DR) as proof of delivery without giving up the original Bill of Lading. If you work with a broker who does not pay unless he gets the original Bill of Lading, remind the Broker, or other Motor Carrier, 49 CFR 370 et al actually states in the part “Records to be Kept by Broker” that the Broker shall receive a Copy of the Bill and he is required to keep it for 3 years and 3 months, the Federal Statute of Limitations. Did you know the same Law reference indicates that “all parties (shipper and motor carrier) to a brokered transaction are entitled to know what the Brokers Commission is”. If the broker fails to tell you, or even the Truck Broker you are leased to, does not respond to your request for this information, you can file under the Freedom of Information Act for the copies of the Truck Broker or Brokers invoice to the Shipper, as all records of those who hold Brokers Licenses are in fact of Law “Public Records”

LESSON 2 A Simple but Foolproof way to sell Trucking services. One can say that it is the objective of every Motor Carrier to have less than 6% deadhead each year so they never have to work with brokers. This is done everyday by the big boys (you never see a Schneider Truck on Transcore/DAT) and a lot more small trucking companies than you might imagine. I indicated earlier, that those who go from broker to broker go broke. The opposite of that scenario would be the most successful market approach for a Motor Carrier. To stop running from point to point, for wholesale rates, and praying to get home occasionally, may I suggest that the “Dumbbell approach” to the market place is the best road to success. You will learn in my class, that the “Dumbbell” of course refers to picking your marketing areas and soliciting shippers within the circle (the dumbbell weight) area. The distance between each circle should be about a 1 day log books worth

You should solicit these shippers by letter and phone as a Motor Carrier, that way you can find shippers at each end of the dumbbell for load

Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

going back each way. That way as a Motor Carrier, you will invoice Shippers direct for each direction of loads for “RETAIL RATES”. Find the Shippers with this simple but effective target mechanism. Define the Zip Prefaces within the circle, select the “SIC” code (manufacturers that suit your equipment type), order a CD Rom ( Zip + SIC) with the gummed mailing labels from Manufacturers News 888 752 5200. This targeting will result in immediate responses from the shippers at each end of the Bar between the circles. The marketing messages can be tailored to each shippers need and the freight rate methods for going in each direction are available when you attend School, (this is 3 hours of Lecture and demonstration and there is hardly room here to accomplish this feat)

At the minimum, you should have a Business Plan that calls for you to reach 50% retail invoicing at the end of six months of selling and 100% at the end of one year. Note; you will seldom achieve 100%, but 80 to 95% is not unheard of. Now the same shippers will offer you loads going to some other area not within your circle. These are the loads you broker, and you must find the backhauler to secure a commission from the move. You should know that all Motor Carriers solicit or are called by Shippers within 50 Miles of their “Yard”. In fact most Trucking companies not only have little trouble going outbound from home but get their highest freight rates as an “OUTHAUL”. Typically however, the same Motor Carrier (90% of Motor Carriers) spend 75% of their Administrative Time and Costs, getting loads home (the backhaul). They usually work with a Broker to get Home and suffer the wholesale Freight rate (the brokers realm). The significant fact regardless of the size of the rate you receive, you will have accomplished your goal billing shippers at each end of the “Dumbbell” FOR RETAIL RATES – goodbye brokers. In our Class, we will show you how to develop the correct “Outhaul” freight rate, and correct “Backhaul” freight rate. Learn how to NOT LEAVE MONEY ON THE TABLE, how to expedite rate, exclusive use rate, air freight rate ( 70% of all air freight never sees the inside of an Airplane) , red label rate, blue label rate, consolidate LTL at Freight Rates as large as the Big Boys. The above is a sample of what our School delivers to each Graduate. There are 87 other topics that are covered in this detail, everything from the History, the law, to FREIGHT RATE Development, Negotiations, from getting a 5 year Contract from your Shipper, to brokering a load to another Motor Carrier, all the way to - your IRS 1099 reporting requirements, to Bookkeeping, credit and collection from shippers and other Brokers.

Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

The most important thing we teach, however is to broker your EXCESS SHIPPER LOADS to other Motor Carriers without Liability and without the need for Insurance for your Brokered loads (the Motor Carrier who hauls, has all the Insurance needed).

The Marketing Message of Trucking and Brokering are at opposite ends of the Spectrum for a Shipper. On the one hand, the truckers sales position is an Arms Length Transaction, such as; here is my rate take it or leave it, contrast to the Brokers market position to the shipper, “what do you want to pay”? School Graduates know how to sell both, without conflicting the shippers mind, especially about Liability for Cargo Loss. Here is what happens to those who start up Brokering without the proper instruction. The Liability from incorrect brokering causes your shipper quit your TRUCKING & BROKERING relationship quickly. In fact, you will have to maintain a high cost Sales Program to continuously find new shipper relationships to stay in business. Only 1 in 19 brokers makes it past 2 years in business (govt statistics). Over 60% of our Graduates are in business after 2 years (we have kept track of our Graduates over the last 18 years). Training with our Programs increases your odds of success 11+ times vs those without training. The Brokering Sales & Marketing plan does not even resemble that of the Motor Carrier. Our School will prepare you for this completely different business. Most Broker make the mistake of think Trucking and Brokering fit hand in glove, Nothing could be further from the truth. The ones that don’t get it, are part of the 18 our of 19 who fail in the first 2 years of bonding, screwing a lot of carriers in the process. You can buy our Text Books without taking our Training Programs. Book purchase means that attendance in the future will be less the price of your books. Our Text Books are HOW TO BOOKS and many of the 49,000 book purchasers did it themselves, using our Text Books. The fastest growing segment is the Brokering Industry is that of the Broker/Agent who works from home on the Internet. It is also the cheapest way to start up your brokerage, (less than 1/10 the start up costs) of your own brokerage. Our School is brokerage is a Broker/Agency for Advantage Transportation, a Forwarder/Broker (you know, the same people who own Dart/Advantage, St Paul). They have their Phoenix Corporate Sales office next to our School. Visit next door to qualify while you attend School. Its easy to be an Agent, in fact, Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.

Advantage Nationwide Agent Network is their largest and fastest growing profit center, doubling every 9 months. Our Graduates qualify as Agents during their 1 week stay, and most of them have their own MC and Trucking company they can operate without reference to Advantage. In other words the Agent undertakes his own Sales Program (for his Motor Carrier rights and for his separate Brokerage), finds shippers for both his own MC Motor Carrier Authority Trucks and his Advantage Broker/Agency. Only the Brokered loads are billed thru Advantage, the Trucker invoices his own Shipper loads - direct for his own retail Freight Rates. The Agents Selling Program featuring your Motor Carrier Authority and an Advantage Agency opens a lot more Shipper doors than starting your own brokerage. Success in your trucking and brokerage efforts is immediate and large, usually within a few days of Graduation. Shippers are confident that Master Brokers (graduates) will properly handle their loads, properly pay the brokered trucks (paid in 16 days acoording to First Advantage), and bring Integrity to their whole trucking and brokering experience. Here is what is coming in the next year. We will offer Internet training for a substantially reduced fee. Book purchase and reading must occur before Internet training will be understood.

Copyright © 2005 by David G. Dwinell No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted on the Loadtraining.com website, or as permitted by law without the prior written permission of the publisher.