The past few years have seemed like a roller coaster for the trucking industry. Up until 2017 demand for capacity was very high. 2018 saw demand artificially increase due to threats of tariffs on products coming into the US from overseas manufacturers. 2019 saw mild industry normalization from the artificial increase, but that dive from the previous year’s high placed a lot of downward pressure on finances for a lot of trucking companies. Now in 2020, the trucking industry has slightly more leverage with spot rates and LTL because current conditions are placing a focus on supply chains. At the same time, many sectors are going through economic contractions. Fleets need a strong finance plan to handle economic disruptions and weather economic downturns.
Creating a Finance Plan
No one knows where or when the next crisis will occur. Southern trucking routes are about to enter hurricane season. The Midwest is vulnerable to tornadoes. The West Coast is worried about earthquakes and fires – and those are natural disasters, some of which occur regularly. Pandemics, freak storms, tariffs, and other things can greatly impact supply chains and the economy as a whole. To form a strong finance plan, fleets need to build up capital reserves that can be used to cover expenses ranging from small purchases up to fuel, payroll, and even equipment. This can be challenging when trucking fleets of every size are waiting at least 30 days for payments from clients. To build up capital, a fleet needs to have a strong cash flow, and staggered payment schedules can be a big obstacle.
There Is a Simple Solution
Instead of waiting on payments for delivered shipments, fleets are using freight load factoring. Freight load factoring is a debt-free financing solution that turns receivables into cash within 24 hours. This eliminates waiting times and supercharges cash flow so fleets can build up capital reserves and roll out a finance plan. By building up capital reserves with freight load factoring, fleets can weather a crisis, natural disaster, or economic downturn without relaying on debt-based loans. Similarly, when the economy is running strong, fleets can use those capital reserves to grow their operations.
Express Freight Finance is a national leader in freight load factoring for trucking companies of every size. If you want to boost cash flow so your trucking fleet can implement a finance plan, contact the experts at Express Freight Finance today.