Data providers, telematics, hardware communications systems – today’s trucking industry is leveraging more technology to improve supply chains, increase safety, and provide increased communication between the driver, vehicle, carrier, and shipper. However, the new business model of technology as a service has trucking companies and owner-operators alike paying for multiple subscriptions to maintain access to that information and functionality, and the increasing overhead cost is becoming a burden.
The Cost of Technology as a Service
As a whole, we’ve become used to subscription-based services. We watch streaming movies and listen to music for monthly subscriptions. Some of our personal software is a “pay as you go” service. These are minor compared to what a trucking company is paying for necessary things like data and diagnostics. Required hardware for trucks can cost up to $1000 per vehicle. The subscription-based software needed to keep the hardware functioning is an ongoing cost that is many times more than a simple movie streaming service, especially when many carriers have to purchase bulk licenses and maintain them monthly or yearly to cover their entire fleets. The cost of technology as a service means carriers and owner-operators need to portion out more money on a regular basis to adjust for the increase in overhead expenses.
Cash Flow Is Key
Making sure cash flow is strong and healthy is integral to making sure the cost of technology as a service is met. If there are gaps in revenue due to unpaid client accounts, the strain could mean one or more subscription services will lapse. Taking out a loan will not solve the problem, because technology as a service is a recurring expense, not a one-time purchase. The best way to maximize cash flow and ensure subscription-based costs are covered is to use freight factoring. Freight factoring takes unpaid receivables and turns them into cash within 24 hours. This helps trucking companies boost cash flow and build up reserves so technology as a service doesn’t place a strain on finances.
Express Freight Finance specializes in factoring services for the trucking industry. To boost your cash flow and cover overhead expenses, contact our team today.