While the trucking industry is not experiencing the same crunch cycles it was half a year ago, the economy as a whole is still growing. Manufacturing and construction are expected to grow by at least five percent over the next year. While this may not sound like a lot, when broken down into dollar amounts, those industries are slated to generate roughly $26 billion and $28 billion, respectively. That growth means construction companies and manufacturers will rely heavily on the trucking industry for supplies, raw materials, and also – in the case of manufacturers – haul finished products.
Keeping Pace with Economic Growth
While the demand is coming from different sectors as opposed to retail shippers, trucking companies still need to be prepared to facilitate supply chains. In many cases, this means purchasing more vehicles, hiring more drivers, and increasing marketing campaigns to reach manufacturers and construction companies. All of which, of course, requires capital. While betting on growth right now will have decent returns, using debt-based loans to achieve those goals before revenue starts coming in is a fiscally risky move. Instead, trucking companies are keeping pace with economic growth by leveraging what they already have – receivables.
Using Receivables for Growth Projects
For all the work the trucking industry does for the other sectors within our economy, cash flow still remains an obstacle. Revenue is tied up in unpaid receivables with staggered payment schedules ranging from 30 to 90 days. Instead of waiting or pushing growth projects to a later date, trucking companies are using freight factoring to unlock the capital tied up in unpaid receivables. Freight factoring eliminates long waiting period by converting unpaid receivables to cash within 24 hours. Because freight factoring is not a loan, no debt is placed on the books. Trucking companies can build up capital quickly, keep things moving, and jump on opportunities such as purchasing more trucks, hiring more drivers, or taking on larger client orders.
Express Freight Finance is a nationwide leader in factoring services for the trucking industry. Whether you are positioning your trucking company for growth, or simply want to build up extra capital while boosting your cash flow, contact the experts at Express Freight Finance today.