We decline certain freight opportunities, even when we could book loads and generate immediate revenue.
If we cannot move freight profitably for both parties, accepting it only leads to strained relationships. This discipline is rooted in KBX Logistics® origins.
As I mentioned previously, we managed Koch’s freight for years before offering our services externally. This background allows us to be selective, and approach your freight differently than a broker would.
Brokers work your freight one load at a time. Find the cheapest truck on the lane, add margin, book it, move to the next one. Nothing is wrong with that. It’s a real business, and plenty of sharp people are good at it.
However, each load is only one part of a larger network. Focusing solely on individual loads can lead to inefficiencies across the network, with incremental losses that may not be visible on a single invoice.
With 20+ years of experience managing freight costs, I have seen firsthand how these expenses impact profitability. At Koch, every business operates on real margins, so I understand margin pressure firsthand.
We plan with the entire network in mind, focusing on eliminating empty miles. An empty mile represents a cost with no return, which typically affects the customer.
We seek opportunities where our scale secures better pricing and where your loads align with ours to eliminate waste. When there is a strong fit, both parties benefit. Otherwise, we decline the freight.
Our size does real work here. We move across every mode, with truck the biggest, and the volume behind us buys capacity cheaper than a single shipper could on their own. When we find you a lower cost, it’s because we bought it lower, down at the source.
We utilize every suitable mode and arrangement, including dedicated fleets, contract lanes, and the spot market. Our goal is to match your freight with the most cost-effective and reliable solution, even if it is not immediately apparent.
Take an import shipment. The instinct is often to put it on a truck at the port and move it inland. But sometimes a cheaper, equally reliable option involves two or three legs of transportation you might never have considered.
We look for those opportunities because managing Koch’s freight required us to.
The objective is to keep the truck full and moving. Every idle hour is a lost opportunity for both the driver and the company. By maximizing utilization, the driver remains productive, the cost per load decreases, and you benefit from lower invoices.
This approach also affects our compensation model.
Brokers frequently profit from the difference between their costs and what they charge you, which is often not transparent and can misalign interests.
Everyone who moves your freight makes a margin, us included. What matters is where that margin comes from.
A broker earns it one load at a time, marking up each lane on its own, oftentimes with less focus on your network costs you per year. We earn ours differently. Our price can land at or below what the market would charge you, because we take the waste out of your network first. The margin lives in the efficiency, which keeps us pointed in the same direction as you. Lower your total cost, earn our keep by running your network well, and grow as your volume grows.
Within Koch, we apply the same scrutiny and provide honest feedback, declining freight that does not fit. If we operate this way for our parent company, you can expect the same standard for your business.
KBX’s operational background is significant. Our incentives are aligned with yours. Organizations designed to profit from individual loads will eventually do so. We were established to manage a network for a customer that could not afford inefficiency, and we apply that same discipline to your business.
From the seat: It is our perspective and lived experience that the cheapest invoice and the cheapest network are rarely the same thing.
Next time: What that perspective actually saves you, because the price per load looks good on paper… until you add the whole year together.
Annant Patel
Chief Commercial Officer & Asset Strategy Leader
KBX Logistics