Please ensure Javascript is enabled for purposes of website accessibility Spot Rates Are High, Can Trucking Companies Capitalize on Revenue?

Spot Rates Are High, Can Trucking Companies Capitalize on Revenue?

While headlines keep hammering the bad news of inflation, supply chains, and fuel costs, there is good news that the major outlets have not been covering. Spot rates are really high right now, which could offset operational costs for small and large trucking companies, as well as owner-operators. But to truly capitalize on higher rates during economic uncertainty, trucking companies and owner-operators alike will need to accelerate their revenue.

High Spot Rates and Slow Payments

Trucking companies and drivers that have been chasing high spot rates have had no shortage of customers since the start of 2022. However, a high volume of shipments at decent rates does not always translate to lots of revenue. Staggered payment schedules on freight invoices can slow revenue streams to a trickle, as payments have windows of 30, 60, or even 90 days. This means trucking companies are still spending money on fuel, maintenance, payroll, overhead, and more while they wait for customers to pay their invoices. The gaps in revenue can place a severe strain on cash flow and even force some trucking companies to take on debt from short-term loans. Unfortunately, many fleets and owner-operators feel caught between a rock and a hard place because they still have to cover their financial obligations, but they cannot force customers to make payments faster.

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Accelerating Revenue for Trucking Companies

No one can force customers to pay faster. Invoices with staggered payment schedules of a month or longer have been an industry standard. However, there is one way to accelerate revenue without breaking the system. Factoring has been around almost as long as businesses have been issuing invoices, and in the trucking industry, freight bill factoring has been used to accelerate revenue, prevent strains on cash flow, eliminate long waiting times for payments, and enable growth. Freight bill factoring is a simple transaction whereby unpaid invoices are sold to a factoring company. Because this is a sale of an asset, no debt is placed on the books and credit ratings are preserved. In exchange for the invoice, the trucking company or owner-operator receive cash equal to the amount on the invoice, minus a small percentage for processing. The difference is that instead of waiting 30 days or more to get payments, freight bill factoring can cut that time down to a single day. This means that trucking companies and independent drivers can speed up cash flow so there is always ample capital on hand to cover their expenses. Additionally, this allows trucking companies to amass funds for growth without needing to rely on debt-based loans.

Choosing the Right Freight Bill Factoring Service

Not all freight bill factoring companies are the same. Some have extra fees. Others will cut down waiting times, but still take anywhere from five to ten days to make funds available. It helps to understand how a freight bill factoring company operates before submitting your unpaid invoices. At Single Point Capital we build customized freight bill factoring plans to fit the needs of your trucking company. We do not require original copies of invoices, and can provide funds based on electronic copies. Our clients receive a personal account manager to answer questions, as well as a suite of tools so they can keep track of payments, rates, and more. We also give our clients the ability to perform credit checks on their customers so they can make informed business decisions before entering into any binding agreements with them. The most important aspect of freight bill factoring from Single Point Capital is that we can turn invoices into cash and make the funds available in a single day, so our clients get the fastest turnaround available.

Preparing in an Uncertain Future

No one can say for certain where fuel prices, inflation, demand, and rates will be in a week, a month, a year, or really at any point in the future. Yet in spite of the uncertainty, trucking companies and owner-operators do have agency over the speed of their cash flow, instead of leaving things up to customers to make payments after 30 days. To take control and prepare for the financial future of your trucking company, contact Single Point Capital today and start factoring your invoices.

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