Transportation Factoring: Problems And Advantages

Freight bill factoring is the preferred method for truckers to tide over funding issues. In its simplest form, the trucker submits freight bill raised on a member-shipper and gets the bill discounted up to 90% within a day. As is the case with any mode of financing, transportation factoring has some obstacles. But, the nice news is that factoring is simpler to manage.

Who Can Benefit?
Obviously, freight brokers, fleet owners, van operators can benefit from freight bill-factoring services. Majority Freight brokers, buffeted on both sides, from the shippers as well as the truckers, have lost credit rating; and find it impossible to receive financing at reasonable rates of interest. The same catch 22 situation haunts fleet operators, for whom difficulties grow bigger as their business expands. Given this scenario, less said about the owners who operate a single van on their own is better. Factoring finance is a great relief for all these people.

The Hitches:
Financing day-to-day operations is side of the story, but it is the critical part of the travails. Transportation factoring companies are more understanding, when it comes to credit standing and such 'formal' obstacles. These companies appreciate the peculiar snags freight brokers face and are considerably more flexible. The same goes for fleet owners and individual truckers.

Shippers are beneficiaries of the service; truckers prefer to select up lots from shippers authorized by their factoring company, since they are definite of immediate discounting of bills.

Transportation factoring organizations go beyond providing credit; they offer plenty of other niche kinds of support, tailor made for the fleet owners & truckers.

The Choice:
Freight bill factoring is tuned for transportation industry; but this is of coursework, only partly true. A factoring company formed by truckers & operated by truckers alone can work for the truckers. There's several instances of 'adventurous' factoring companies, who delivered shoddy service or fleeced the already harassed van owners.

As such, it would be prudent to check out a few things. Opt for a factor where board members to the managers have been in the freight hauling business. Membership & acclaim from Transportation Intermediaries Association & other trade bodies show that the company is trusted by the industry.

The Advantages:
Freight bill factoring is flexible & convenient in several ways. The credit line can be increased or reduced as per need; & documentation is much simpler. Insurance costs definitely less, when you buy it through a factoring company. Fuel cards (provided they are issued by a reputed factor,) are honored across the country for fuel & also repairs.

Freight bill factoring can play a significant factor in success for transporters & shippers similar.

The greatest of all advantages is the business leads. If it is nice, the transportation factoring company collects information about available lots from shippers; & helps truckers by listing it on the net site or send alerts.