The trucking industry is currently in a state of flux. Freight has been on a decline throughout the summer, yet most carriers are feeling momentum towards economic growth heading into 2024. This means trucking companies and owner-operators need to find pathways to Q4 2023 so they can experience growth next year.

The Main Reasons for Lower Demand

Going into the summer of 2023, demand dropped mostly due to fewer shipments. While the United States seems to have avoided a full-blown recession, interest rates at the consumer level are still high, leading to fewer large purchases. This has placed negotiating power on the shipping side of the industry, so trucking companies and owner-operators are getting less per mile. Even the spot and LTL markets are feeling the crunch. B2B companies are in a holding patterns, and private citizens are making fewer purchases for their homes and personal entertainment.

Another factor is covid. While the United States has put the pandemic far in the rear view mirror, the past few months have seen major spokes in “breakthrough cases” – that is, vaccine-resistant variants of the virus that are creating hotspots around the country. This may cause a lapse in the workforce and also cause a disruption to supply chains.

Why There Is High Confidence for Growth in 2024

A recent ACT report – not at the industry level, but at the manufacturing end of the scale – showed high confidence for 2024. There a growing momentum to produce commercial vehicles, which would not happen if there was no demand at the carrier level. The reality is that domestic production and jobs are slated to increase more than in the previous decade, and that will be noticed down to the consumer level in 2024. The end result, in theory, is that by next year, prices should start to drop and overall demand should significantly increase. None of these forecasts take into account the yearly rise in demand due to Q4 sales and shipping rushes, which could also see a higher spike than last year.

How Can Trucking Companies Get to 2024?

The segment of the trucking industry that is feeling most of the slowdown this summer has been smaller trucking companies. Maintaining adequate cash flow can be a struggle, especially when customers are on staggered payment schedules of 30 to 90 days. Drivers need to get paid, equipment needs to be maintained, and overhead needs to be met. To accelerate cash flow, small trucking companies turn to freight bill factoring.

Freight bill factoring serves as a financial lifeline for small trucking companies, offering them immediate access to cash flow by selling their unpaid invoices to a factoring company. Instead of waiting for 30, 60, or even 90 days for customers to make payments, these trucking businesses sell their invoices at a discounted rate to a factoring company, which then handles the collection of the invoice. This financial mechanism ensures that small trucking companies have the necessary funds to cover fuel, maintenance, payroll, and other operational costs, enhancing their financial stability and enabling them to take on new jobs without worrying about cash flow constraints.

Additionally, freight bill factoring is not a loan, so there is no impact on credit ratings, nor is any debt placed on the books. Trucking companies can increase their cash flow, cover expenses, and build up capital to make it through market slumps and take advantage of things when momentum picks up later on.

Single Point Capital works with trucking companies across the United States to help them improve cash flow and reduce costs. From our comprehensive freight bill factoring that turns invoices into cash within a single day, to our fuel discount program, insurance savings, and more, Single Point Capital has become a one-stop shop for new and small trucking companies.

In conclusion, Single Point Capital offers a unique and comprehensive solution for the financial challenges faced by small and new trucking companies. Our suite of services, encompassing freight bill factoring, fuel discount programs, and insurance savings, is designed to enhance cash flow, lower expenses, and ultimately enable your trucking business to weather economic slumps and seize growth opportunities. Don’t let financial constraints limit your potential. Contact Single Point Capital today and discover how our services can help you drive your business forward into a profitable future.