Trucking companies need to protect themselves against bankruptcy in order to keep our economy moving. 2019 is shaping up to be an odd year for the trucking industry. On one side of the scale, the trucking industry is experiencing slower movement from manufacturers and retailers, which is compounded by looming tariffs.
On the other end, there is a huge increase in shipping from the e-commerce sector, but that is forcing smaller trucking companies and owner-operators to up their game by providing additional services, including last-mile delivery.
With all of these new market pressures, some trucking companies—most recently Falcon Transport and New England Motor Freight—have declared bankruptcy. Even carriers such as FedEx and UPS are not immune to the current market and are posting lower figures than previous years.
Loans Do Not Prevent Bankruptcy
It may seem like a no-brainer, but loans cannot stave off bankruptcy. Saddling your trucking company with more debt to overcome cash flow issues or to get additional working capital will only make it harder to tread water.
Yet when things get rough, business owners will go to great lengths to cover overhead costs and make payroll, even if it means taking out loans. Fortunately, there is a better alternative.
Freight Factoring Is a Solution
Freight factoring allows trucking companies to protect themselves against bankruptcy while simultaneously sidestepping debt. One of the biggest contributors to bankruptcy is the inability to get access to revenue and working capital that is tied up in unpaid receivables.
Freight factoring eliminates these hold-ups by converting receivables to cash within 24 hours, giving trucking companies the ability to cover overhead costs, make payroll, and accumulate capital to weather rough periods or expand operations during lucrative times.
Our economy relies on the trucking industry, and bankruptcy in the freight sector can have a ripple effect. While current market pressures and demands from Washington, DC, have created an uncertain outlook, there is no reason why trucking companies should struggle because of outstanding receivables.
Express Freight Finance is a national leader in freight factoring solutions. To boost your cash flow and build the capital reserves necessary to handle whatever the future holds, contact Express Freight Finance today.