Retail and industrial supply chains have risen by over 30% in the United States this quarter, thanks in part to logistics being reconfigured to handle the surge of B2B and B2C e-commerce, along with upward economic trajectory as more people are getting vaccinated. However, with business booming in two of the biggest sectors of America’s economy, trucking companies are still experiencing cash flow issues.

The Bottlneck Caused by an Economic Upturn

As stores and businesses reopen and ramp up operations, trucking companies are being called on to deliver more shipments than they have over the previous year. That means the trucking industry is signing new contracts and taking on more spot loads. In theory, those sales should translate to a lot of revenue. The bottleneck occurs because clients pay carriers and owner-operators on staggered payment schedules of 30, 60, and even 90 days. Carriers are extending their resources to keep shipments rolling while they wait for payments from their customers, and in the meantime trucking companies have to cover overhead, payroll, maintenance, fuel expenses, and more. Even in an economic upturn, traditional business practices life staggered payment schedules can throw a big wrench in the works. Unfortunately, because the economy is at an uncertain point, banks are hesitant to provide even short-term loans to smooth over uneven revenue cycles. At the same time, trucking companies are hesitant to take on debt and impact their credit scores over something like staggered payment schedules, especially when it can turn into a recurring issue. The trucking industry need a better solution to speed up payments so they can maintain and grow their operations, and keep supply chains running strong.

Unclogging the Cash Flow Pipeline

In order to remove the waiting time so carriers can reap the benefits of a growing economy, trucking companies utilize freight bill factoring. Freight bill factoring is specifically designed to eliminate staggered payment schedules and unlock the revenue from unpaid receivables quickly and efficiently. Single Point Capital’s freight bill factoring gives carriers and owner-operators to convert their unpaid receivables into cash and access funds within a single day. This means carriers can succeed and grow with the economy, instead of being held back by staggered payment schedules and cash flow strains. Instead, trucking companies and owner-operators accelerate cash flow, build up capital reserves, and expand their operations without relying on short-term loans and other debt-based programs to smooth over uneven revenue cycles.

The Driver Shortage Remains an Issue

The trucking industry is experiencing a larger gap in the workforce compared to the pre-pandemic economy. As trucking companies of every size muster their resources to keep supply chains moving, they need a new wave of Class-8 drivers to take the wheel and offset the burden on the existing workforce. Furtunately, trucking companies that use freight bill factoring have the capital reserves to offer incentives to new drivers, as well as train emerging truckers with the dedication to make a career out of hauling.

If you want to put your trucking company’s cash flow on the fast track, contact the team at Single Point Capital today.