Past: Original Paper work required for Funding Less people needed, credit limits assigned electronically.Allows real time accuracy, and immediate booking of loads if needed.Present: Online access to credit approvals in seconds More employees needed and the data was weeks old.Too much time elapsed and the trucking company would lose load commitments to competitors.Past: Freight Broker/Shipper had to be approved by phone or fax in order to factor the invoice. Here’s a comparison of the process for factoring in the past and present: Trucking companies are uninformed about the options now available to them, and there are some factoring companies resisting change, lacking financial resources to invest in the digital age and refusing to evolve. Incredibly there are still factoring companies and trucking companies operating in the past. This involved a lot of time and cost for both the trucking and factoring company. A trucking company was required to submit ORIGINAL paper work for the load transaction. How the digital age forced the industries to evolve, and others have fallen behindīefore the digital age became popular in the trucking and factoring industry, the funding process was very slow and involved a lot of paperwork, mailing, and phone call verifications. An invoice for a completed load that has been accepted by the client is an immediate asset for the trucking company that can be pledged as collateral for funding. These companies that specialize in funding invoices on credit terms are called Factoring Companies. Due to the continuous slow payment from freight brokers and shippers, trucking companies have had to search for financial companies that specialize in advancing funds against the freight bills/invoices. The load dispatching to trucking companies is moving at a fast pace, but incredibly, invoice payments are slower today than they were 10 years ago. Traditionally trucking companies would get a dispatched order by fax or a phone from a shipper, but with today’s trucking market, it’s more likely an email from a freight broker working on behalf of a shipper, or a notification from an online Trucking Load Board Service. Even with all these gadgets and digital enhancing devices, invoices are still paid in a slow manner, causing extreme cash flow issues. All businesses expand and invest as they grow, and look for more efficient methods while keeping cost down and production high.Ĭash flow shortages in the trucking industry still exist today as much as they did back then. If you’ve been around the transportation and trucking industry for a while, you may recall the days when there was no email, cell phones, GPS, fuel cards and many other beneficial devices and services that are here today to help trucking companies succeed. To determine if a factoring company is the right fit for your trucking company, let’s take a look back at how the trucking industry has evolved. Advertiser Content provided by 1st Commercial Credit