The Owner-Operator Independent Drivers Association is placing pressure on Congress to pass legislation that would help protect independent truckers and small trucking companies alike from less-than-ethical practices used by some trucking brokers.
Trucking Brokers and Transparency
When owner-operators and small trucking companies enter into business ventures with brokers, they take on a lot of risk. Some brokers are very transparent about their deals, so independent drivers and trucking companies can see exactly what their rates are and how much the client is paying the broker to have shipments hauled. Over the years, some brokers have become opaque and do not disclose the details of their transactions. Some even sit on invoices instead of paying carriers and truckers in a timely manner. Now, in today’s economy, brokers are offering very low rates which are unsustainable for independent truckers and small carriers.
OOIDA and Trucking Brokers
The OOIDA is pressing Congress to force brokers to be more transparent about their offerings. The trucking industry needs to know what brokers want shipped, the cost of the entire transaction, and what percentage the carrier is receiving. This will hopefully give small carriers and owner-operators more agency when doing business with trucking brokers. The idea behind the proposed legislation is that when all parties are on the same page, business can be conducted honestly, ethically, and result in stronger relationships with less resentment or people feeling cheated.
Receivables and Trucking Brokers
Receivables can be a point of contention when owner-operators and small carriers work with trucking brokers. Sometimes brokers are left waiting for payments from their clients, and in doing so, do not pay the carriers and independent truckers who do the work to deliver the shipments. This is bad for the trucking industry, because they need the revenue so they can keep supply chains moving. Instead of waiting on brokers for payments, small trucking companies and owner-operators use freight factoring. Freight factoring eliminates the lag in payments from brokers, so small trucking companies and independent truckers can thrive and get fast access to the capital they need without taking on debt.
At Express Freight Finance, we offer comprehensive factoring for owner-operators and small trucking companies. We can turn unpaid receivables into cash within 24 hours, so you don’t have to wait on brokers to pay their invoices. Contact our offices today to learn more.