Shipping rates are experiencing downward pressure in some markets. Even as some states reopen during the pandemic in a move to kick-start the economy, shippers and brokers still maintain leverage over shipping rates, often to the detriment of carriers and owner-operators. But whether shipping rates are down or up, trucking companies and independent drivers need to maintain cash flow to thrive.
Low Shipping Rates Shouldn’t Stop Cash Flow
When shipping rates are high, carriers tend to ignore staggered payments. However, when shipping rates are low, carriers need access to revenue as soon as possible in order to cover overhead and keep operations rolling. Yet the combination of low rates and staggered payment schedules can cause long gaps in cash flow and force trucking companies to come to a screeching halt. This can be dangerous for trucking companies and owner-operators. More often than not, carriers are tempted to take out short-term loans to fill in gaps in cash flow while they wait for payments, but those loans add debt to the balance sheet. When payments come in from customers and brokers, that money needs to not only cover overhead, but also repay the loans.
Correct Cash Flow When Shipping Rates Are Low
Trucking companies and owner-operators need a faster and more favorable solution than traditional loans to correct cash flow issues. Instead of taking on unnecessary debt, the trucking industry turns to freight factoring. Freight factoring turns those unpaid invoices to cash within 24 hours without putting any debt on the books, so trucking companies and independent drivers can get fast access to capital. Freight factoring is the simplest way to boost cash flow when shipping rates are low, and when rates are high, factoring supercharges cash flow so carriers can not only thrive, but grow.
Express Freight Finance is a national leader in factoring services designed specifically for the trucking industry. If you want to eliminate the long waiting times between payments from customers and brokers, or if you want to correct cash flow issues without relying on loans, contact the professionals at Express Freight Finance today.