Another main industry that accounts for a good deal of factoring volume is the trucking industry. In this industry trucking companies and owner operators suffer from the same cashflow mismatch as staffing and apparel companies. The invoices to the customer end up getting paid in 30 to 90 days while the bills for driver’s payroll, fuel expenses and equipment payments are due weekly, bi-weekly and monthly. A trucking company has high fixed costs of equipment and high variable fuel costs so they cannot afford to let their trucks and trailers sit idle due to cashflow problems.

    The main piece of paper documentation that drives the trucking industry is the freight bill also known as the bill of lading. It contains the crucial details of who is hauling what where and when. One very important thing a factoring company looks at on freight bill is that their client is listed as the carrier. The entity listed as the carrier has the right to receive payment from the shipper for that load even if that shipper already paid someone who was not listed as the carrier.

    In the trucking industry there are many brokerage type businesses as well. These businesses broker freight loads and help make sure that trucks do not run empty. Some factors will factor a freight brokerage business. These are usually factors that have a greater specialization in the transportation industry due to the added risk and complication a brokerage business presents for a factor.

    Factoring for the trucking industry is highly specialized. Some factors offer more complex services such as fuel and payroll debit cards for drivers. Some also offer sophisticated back office services such as billing, accounting, payroll, tax remittance, credit research and collection services. Credit research information is especially valuable to smaller and startup trucking companies that do not want to make bad credit decisions but cannot afford separate credit services.
 
    If you own or are starting a trucking company and have questions on how factoring your invoices can help you we can help.