Shippers and Carriers: Availability Vs. Capacity

There is no doubt that the trucking industry is experiencing “crunch time.” If you ask most drivers and fleet owners, “crunch time” has been happening for almost a year straight, and possibly longer. But no matter how you slice it, the crunch comes down to availability and capacity in an ongoing tug of war between shippers and carriers.

Shippers Place Availability over Capacity

Shippers want drivers and they want them now. While many in the trucking industry are very aware that goods need to be shipped on time, there are some major challenges that have to be overcome. First, there is a deficit of qualified drivers, which places a strain on availability. Second, the limited hours of service due to the ELD mandate are slowing down supply lines. Third, unpaid invoices prevent carriers from having the working capital necessary to purchase more trucks and hire additional drivers. Yet shippers will take any truck for any size shipment as they are available. This does nothing to help the situation because sometimes drivers end up hauling a fraction of their capacity due to the demands of shippers.

Carriers Want Capacity and Efficiency

Trucking companies understand logistics better than any other industry. Efficiency cannot be maintained when shippers are hiring driving to carry partial loads simply because they are available. Capacity shipments allow trucks to move large amounts of goods to one or multiple destinations. A dedicated truck with a small shipment only exacerbates the strains being felt by both shippers and carriers. Having to wait 30 days or longer to see payment from shippers for carrying goods only places a further strain on cash flow, which means finances can get very tight when paying for drivers, fuel, and regular overhead expenses.

Alleviating the Strain

While shippers and carriers are still going to go back and forth until a resolution is met, the trucking industry can at least increase their cash flow. Carriers can use freight load factoring to clear up unpaid invoices and get immediate access to the revenue they’ve been working so hard to earn. Factoring converts open invoices to cash within 24 hours, which removes staggered payment schedules and improves cash flow to cover expenses and keep shipments moving.

Express Freight Finance provides the most complete freight load factoring services nationwide. Contact our offices today and get a more competitive edge during these fast-paced times for the trucking industry.