What Is Transportation & Freight Finance?

For companies big or small, a freight payment service can provide assistance with cash flow through freight financing. Partnering with a factoring company should help carriers experience fewer delays in receiving payment and also shorten the payment clock. As the trucking industry continues to expand, companies must find options to gain a competitive advantage…and freight factoring can provide that advantage. 

What Do Transportation and Freight Finance Mean?

Transportation finance can provide businesses a way to release working capital that might otherwise remain tied up in invoices for a long period of time. After hauling a load, carriers will submit paperwork to a factoring company rather than a broker. The broker will then pay the factoring company for the invoice in roughly 15 to 30 days. Freight factoring allows for carriers to receive payment instantly rather than waiting for the average 30 to 90 days most shippers take. 

Using freight factoring can address the problems of slow-paying shippers by buying the invoices and paying the carrier within a day or two. Receiving payments sooner can increase cash flow and allow the carrier to pay operational costs.

A Brief History of Freight Financing

After World War II and the expansion of highway systems in the United States and Canada, the trucking industry had the opportunity to expand. This expansion allowed a surge in freight transportation that prompted funding for transportation companies and freight factoring to begin. Throughout the ‘60s,70s, and ‘80s the trucking industry continued to evolve and become a vital part of society. 

As advancements continued and deregulation occurred, the number of trucking companies in operation increased drastically. More competition led to increases in volumes, freight rates, and interest rates for the companies to secure financial backing. Throughout the decades, and especially in the most recent past, freight financing continues to grow and become a leading financial strategy. 

How Freight Finance Improves Working Capital

The trucking industry faces challenges with freight capital due to the prolonged payment period shippers need. Observing the continuous growth in the market and how freight financing can help free up working capital, Grand View Research mentions, “Significant growth in the Banking, Financial Services, and Insurance (BFSI) industry is considered a key factor in developing a positive impact on the market growth. Moreover, the growing requirement for alternative sources of financing for Micro, Small, and Medium Enterprises (MSME) is driving the market growth. Factoring services enable businesses to obtain working capital loans and mitigate credit risks.

To gain access to revenue and build freight capital, companies in the trucking industry continue to use freight factoring. Transportation factoring can create immediate cash flow for a business and maximize the working capital without creating more debt.

What to Look for in a Finance Provider

Working with the wrong factoring company can cause a negative effect on a company’s cash flow and operations. When deciding on the best freight financing business to partner with, make sure the business can provide:

  • Advanced technology, including a digital software platform to simplify the payment process.
  • A platform that can streamline document management and automate invoicing and paperwork. This will allow for faster processing.
  • In-depth knowledge and expertise of the trucking industry. The potential partner must be able to demonstrate they are up-to-date on market trends.
  • Top-of-the-line customer service, with proactive communication strategies and the ability to respond quickly.
  • Transparency with fees, contracts, rates, and can meet expectations without minimum volume requirements.

Boost Your Finance Goals With the Right Solution

Partnering with the best transportation finance company can provide solutions for when shippers are prolonging the payment process. Factoring can provide a variety of benefits, including increased cash flow, overall business growth, advancements in technology, and the ability to reduce the stress associated with back-office tasks. To see these benefits and learn more about how they might impact your business, request a demo of the HaulPay platform, a creation by industry finance expert ComFreight.

The Supply Chain and Logistics Technologies in Freight that Improves Operational Costs & Margins

Advancements in technology innovations continue to make big waves across industries, and logistics and the supply chain may be one of the most impacted sectors. 

Technology in the logistics industry provides enormous amounts of data that can be analyzed to increase efficiencies, streamline processes, and offer an improved customer and provider experience, as well as protecting carrier or freight broker profit margin

The Internet of Things to See Real-Time Status

The internet of things (loT) can be used to offer predictive maintenance services with a real-time status that can guarantee the product uptime and provide real-time data to improve sales. The deployment of loT can allow for real-time tracking, smart inventory management, asset management, geo-fencing, and real-time vehicle diagnostics. Real-time tracking is achieved with loT-enabled GPS tracking to monitor the vehicle’s location at all times. The data then is transmitted to a central system that sends real-time updates to the mobile devices. Having such updates and tracking can allow for quick responses to potential reroutes and avoid delays through instant insights. 

AI, Machine Learning, and Analytics

Advanced supply chain and logistics technology can allow companies to automate warehouse operations, properly manage inventory, create more beneficial customer experiences, shorten delivery times, and optimize strategic planning and sourcing. Freight technology can help promote automation and deliver insights that can result in better decision-making that will increase efficiency through data-driven insights. Utilizing the advanced transforming trends in logistics and technology can allow for companies to examine, analyze, and interpret customer trends.

Robots and Automated Workflows

Advancements in artificial intelligence (AI), machine learning, and loT connectivity continue to optimize robots used in warehousing and throughout the supply chain fulfillment process. Furthermore, as advancements in AI continue to rise, improving the precision and mobility of robots, so will the sophistication of the tasks assigned. For functions that traditionally require manual labor, such as picking and packing orders or operating loading tasks, robots will have the ability to increase workflow efficiency. With the benefits of digital tech, trucks driven by robots can be safer and more efficient. 

Route and Optimization Software

According to Mitsloan, “Surveyed companies are investing in predictive analytics primarily to drive cost reduction (cited by 81% of respondents) and improve customer experience (60%). The most promising use cases for supply chain analytics cited by respondents: Inventory visibility and optimization (32%), strategic sourcing and optimization (26%), and real-time product intelligence (22%).” The technology trio of AI, machine learning, and analytics can optimize visibility throughout the supply chain and assist with boosting data quality to deliver genuine business value. 

Increased Cash Control

To improve profitability in customer relationships and orders, companies need to measure the number of order processes and optimize payment settlement to measure consistency in shipping. Informed decision-making about supply processes can also help avoid costly errors. Additionally, the settlement of freight payments services with clients affords opportunities for saving costs by reducing the time between ordering and payment, solving late payments, making missing prices visible, and optimizing invoicing. 

Freight Factoring Software to shorten the Payment Clock

Advancements of technology in supply chain and logistics continue to transform freight payments with digital invoices, tracking loads, and improved data analysis. The trucking industry is a mobile operation, so providing tools that drivers can use on the road is critical. Technology continues to enable fast freight payments directly to the driver or vendor, by bolstering fleet factoring capabilities that result in next-day or, in some cases, same-day cash flow. 

Put the Power of These Supply Chain and Logistics Technologies to Work, While Leveraging ComFreight’s HaulPay to Thrive

As the fast-paced market continues to evolve, businesses must adapt to stay ahead of competitors. To utilize the growth of technology that is integrated with an efficient and streamlined operating system, request a demo to see how the HaulPay platform works.

Why 3PLs, Brokers & Carriers Need Flexible Freight Factoring

Flexible freight factoring and payment for freight finance can provide shippers with the opportunity to stay ahead of costs and carriers never have to wait long to get paid. Combining an audit with analysis and freight optimization tools significantly boosts the savings potential. Freight transportation is a massive spend category. Ensuring freight bill accuracy and keeping cash flow intact—an essential business need—is critical in today’s freight market for 3PLs, freight brokers, and carriers alike. Freight factoring companies that offer flexible factoring terms and are easy to work with can provide the necessary capital to continue to keep all freight parties’ prepared to keep freight moving without business interruption. Learn why in this article.

What is Flexible Freight Payment and Freight Factoring?

Freight factoring occurs when a delivery is made as scheduled. However, rather than waiting for payment, the freight company or owner/operator transfers or sells the invoice to a third-party freight factoring company, which then pays the invoice immediately, minus a nominal service charge. T. The freight company will continue to focus on other tasks in the business while the freight factoring company handles the invoice and does the waiting for payment in full from the shipper or supplier. Partnering with a freight payment company can also provide more benefits to maximize profit margins and avoid the risk of shippers taking longer than usual to pay.

3PLs, Brokers, and Carriers All Traditionally Rely on Shippers for Payment

Freight factoring companies help shippers and carriers by giving them the majority, if not all, of the funds needed for their company. Shippers may experience a delay in payment or get behind with accounting and invoices, but it directly affects the carrier. Carriers usually have to pay up-front costs like fuel or repairs, which can cause issues if the payment is not received on time. In explaining the billing system, Supply Chain Dive states, “So carriers may not be due for a freight billing revolution any time soon, but that does not mean they shouldn’t embrace it when possible. Companies pay significant amounts of money or expend valuable resources for invoice audits which, as Supply Chain 24/7 suggests, can be better managed by both shippers and carriers upfront.” Using a digital freight forwarding platform can provide shippers with an upfront efficient way to pay carriers and brokers rather than make the businesses wait for payment. Having the option for shippers to pay upfront and carriers to receive the payment allows for companies to exponentially grow without setbacks.

Additional Reasons to Leverage Flexible Freight Payment Solutions

Freight payment, also called freight audit and compensation, refers to specialized systems and processes that manage high volumes of freight invoices and deliver deep business intelligence about freight costs. Companies can help carriers find more capacity while ensuring shippers can make the proper payment on time.  Freight factoring can help any business experience the following benefits:

  • Flexible payment solutions that reduce the risk of carriers not getting paid and still allows shippers to secure the capacity.
  • Immediate payment which can help prevent the carrier from rejecting the load based on the shippers’ ability to pay.
  • Cost structures that are built with flexibility in mind to meet the needs of shippers, carriers, and the ultimate customer.
  • Flexible cancellation policies, provided the software vendor makes that clear. 
  • Easier financing than going through a bank, by o. By obtaining a next-day payment and immediate processing, shippers and carriers can receive the payment almost immediately.

For companies to achieve growth and scalability, the best decision is to partner with freight payment services that can strengthen specific businesses and provide tools to increase efficiency. For freight spending and payment, putting a freight payment solution in place is necessary to effectively manage costs and ensure on-time payments.

Take Advantage of Fast, Easier Freight Factoring and Payment by Signing up for ComFreight Now

Freight factoring can provide a higher level of business intelligence and ​can integrate data from multiple sources, delivering much more valuable information to be used for decision-making and process improvement. To see the benefits of an easier way to handle payments, request a demo to see how the HaulPay platform works.

How to Handle Freight Finance and Logistics Through Hurricane Season

It’s that time of year again—hurricane season. And for trucking companies, shippers and brokers, it’s also time to balance the run-up to peak with the other disruptions of reality. Meanwhile, the industry is dealing with the fallout from Hurricane Ida’s intense assault on Louisiana. As reported by NBC News, the state’s governor, John Bel Edwards, described the storm as “one of the strongest storms to make landfall here in modern times.” With Hurricane Katrina’s 16th anniversary coming the same day as Hurricane Ida made landfall, this is a time of great concern. Everyone is waiting to see what happens as the devastation of that event continues unfolding in the weeks to come. And freight management parties need to know a few things about what hurricane season means for logistics, how to handle the surge for affected areas, and why freight factoring or other finance options are crucial to success.

Logistics, Hurricane Season, and the Construction Industry Come Together to Add Complexity

Construction trucking, i.e., flatbed rates, always increase in tandem with hurricane season in logistics. That’s reality. However, the past hurricane seasons have led to one inevitable outcome—a greater chance for disruption and increased demand for faster, accurate, and efficient freight finance. But why is freight finance so crucial during times of upheaval like hurricane season? It comes from the need to recognize that nothing is as it seems. And the irony of this lies in how we apply data from the past to plan for the next storm and its aftermath. 

Historical and real-time data insights can help shippers understand the surge in demand. The same can help carriers and trucking companies recognize when to accept tenders with O/D pairs nearest affected areas. Disaster relief loans from FEMA might be available to Louisiana-based carriers to fund operations and recovery. Still, carriers need to move more freight than what those loans might cover. As a result, it comes down to ensuring timely payment, even when shippers begin extending payment terms following such an event’s landfall.

The Things to Know About Freight Finance and Logistics During Hurricane Season

When a natural disaster strikes, carrier rates for loads with origin or destination at the affected area will inevitably increase. Such devastation creates a massive demand for trucking and undermines the efficiency of typical freight finance processes.

For instance, some parishes in the affected area have reported a complete lack of infrastructure, including no cellular service and zero options for getting food. Even worse, freight finance resources at the site may be limited and leave your company to the whims of shippers that are already struggling to get the doors open to their facilities. 

It’s a grim reality for those faced with cleanup, but it will result in highly lucrative loads for the area. As such, here are the things to know about it before accepting any request despite the urgency:

  1. Do not take freight on a shipper’s or customer’s word. This is perhaps the most challenging issue to recognize. Carriers want to make money, and if a shipper is willing to pay, it’s a high-profitability opportunity. However, it can easily lead to lost revenue and even result in a shipper going back on the contract terms. That’s why it’s critical to get everything in writing, from the surcharges through the delivery expectations. If it isn’t in writing, it’s best to assume it isn’t reality.
  2. Recognize that extended dwell times will happen. Another factor that will affect your profitability is dwell time. During hurricane aftermath transport, dwell times grow exponentially. They’re even longer if warehouses or shippers have experienced extreme damage. These extended times mean you should build in additional detention charges well before accepting a load. 
  3. Carefully consider the requirements for each load. Freight comes with special handling and equipment needs, especially when viewing construction and food shipments. What good is it to get a food supply to an area without electricity if it requires refrigeration? Take these issues into consideration and recognize that you might need to go with more reefer loads than those usually shipped without such concerns. 
  4. Plan on waiting in traffic. Dwell time might lead to delays on side streets and traffic issues, but those problems aside, there will still be traffic delays. Debris and floodwaters may block the optimum routes, and your mileage can quickly soar if a detour adds 50 more miles and extends your costs. Plan on waiting in traffic and build those delays into your costs, using them to ensure profitable freight finance throughout the whole journey to and from affected areas.
  5. Do not plan to get paid earlier by a shipper. There’s a perception that urgency equals urgency of pay. That’s the farthest thing from reality. Shippers need to return to operations, not focus on administrative issues, like paying carriers. Your invoice payment terms, typically 30-day to 90-day standards, will increase by a month or more. The duration of recovery may also extend freight payment on outstanding invoices as well. Therefore, you may need to take other means of recourse to get paid. For example, if your company typically waits on shippers to pay at a 90-day interval, hurricane-induced demand may make freight factoring more appealing. Additionally, it is worth considering the differences between recourse versus non-recourse freight factoring. In other words, it’s imperative to assume that the shipper may not pay in the end, and if your company is on the hook for paying back advanced funds to the factoring service provider, your cost control goes out the window. Always ensure you know what might happen if the shipper never pays and who will carry the burden of paying in the end. 
  1. Remember the surcharges brokers may assess. Even if your company works with brokerages to find loads, remember that the rates offered may not yet include brokerage disaster surcharges and fees. Brokers get paid their base rate plus an urgent rate for freight heading into and out of affected areas. Always look for these surcharges and determine how they affect the true profitability per load. 
  2. Be ready for manual logs and limited connectivity. This issue is especially prudent for Louisiana areas without cellular service right now. Without an active internet connection, your ELD may not update properly. As such, trucking companies may need to rely on paper logs to handle things. That’s also true if water or other possible damage occurs to your rig and leads to a failure of the ELD.
  3. Take advantage of external resources where possible. Many things can and do go wrong in the aftermath of a major storm’s landfall. While it’s an opportunity to increase profitability, it’s important to remember that you are not alone and that options exist. These options include leveraging external resources, like mainstream freight data sources, such as DAT and JOC, to help your team understand what’s happening. Additionally, other freight finance solutions can still function throughout the disruptions caused by storms, provided you know where to look. 
  4. Know when to look for other loads too. It’s easy to want to help and provide transportation to areas affected by natural disasters like hurricanes, but other moves might prove more lucrative in a highly volatile market. It all depends on where your fleet is located right now and whether you can justify the costs of getting freight delivered on time and in full. With that in mind, consider checking other load boards, like ComFreight, to review moves that might be more lucrative without running the risks associated with transport to hurricane-affected areas. 

Enhance Freight Finance Efforts to Help With Recovery by Leveraging the Expertise of ComFreight and the Power of HaulPay

The Atlantic hurricane season runs through November 30 annually, and this coming winter is anticipated to see increased precipitation due to the mounting risk of La Nina. 

It’s going to be more critical than ever to take weather-related disruptions into account when reviewing available loads, and part of the risk can be mitigated by following the steps above and putting a dedicated freight finance solution like HaulPay to work. Request a demo to see how your team can still get paid on time, using HaulPay, despite the disruptions caused by this and future hurricanes.

Brokers & Owner Operator Truck Carriers Should Have Freight Finance Options for Credit, But Fewer Fees

Learning the details of owner-operator financing, ranging from a freight broker credit check through managing the freight finance to free working capital to make more moves can be troublesome at best. In today’s age, the push for faster service and lower costs is absolute. As reported by John D. Schulz of Logistics Management, strong truckload roads coupled with an increase in GDP are creating year-over-year growth opportunities for brokers and owner-operator truck carriers. Unfortunately, there are only so many trailers and trucks available, and any delay in payment for services increases the risk to these companies. Ultimately, brokers and owner-operators need a better approach to freight finance. Let’s take a look at the problem of high costs for credit, why an expert is essential to navigating the industry, how a line of credit (LOC) can help, and a few other points of consideration.

The Problem: Fees for Freight Finance Can Be Exorbitant

The simple reality comes from the issue of an owner-operator financing bad credit among its brokers or shippers. If the cargo owner doesn’t pay, the trucking company loses profitability, and even if everything is paid on time, there are still the added costs of processing. In the worst-case scenario, the trucking company may need to pursue legal options for obtaining payment, and that’s an adverse effect because it digs into the working capital of the transporter. Additionally, the fees for financing can be extreme and vary widely based on the nuances within each contract. There is clearly profitability within offering owner-operator truck financing, indicated by a growing CAGR for this industrial sector, noted in a past blog. However, there’s also another reality. Larger carriers have access to more resources to keep their freight financing costs under control, but others, including those of mid-size stature, may simply have limited resources. In a highly volatile market, even the largest carriers may experience cash flow disruptions due to the unrelenting demand on the industry. As a result, it comes down to knowing what to expect and working with the right services for finance.

Freight Financiers Must Have Expertise in the Trucking Industry

Freight financiers are a dime a dozen, but they are not created equally. These companies could charge up to 30% or more for simply offering an advance on an expected payment. Moreover and without experience in trucking, these companies cannot conceivably maintain a financing presence. In other words, freight financing depends on knowing the details of all shipments, contracts and ways to ensure shippers pay on time and in full. By the same measure, the value of a broker credit check conducted by these companies can help your team identify shippers or brokers that have a history of delayed payments. How is that valuable?

Well, the creditworthiness helps your team plan for when a realistic payment will arrive. That’s essential to maintaining a positive cash flow and leveraging commercial truck financing for owner-operators.

LOC for Commercial Truck Financing for Owner Operators

Another option in freight financing is a line of credit. This is a resource that doesn’t rely solely on invoiced transportation but rather a combination of expected payments with the ability to use funds for virtually any need. This is an excellent way to augment financial stability through periods of uncertainty, such as when your competitors undercut your rates and when the market is shipper-favorable. 

Building Credit Starts With Short-Term Funding

The best way to build credit with owner-operators is to work with shippers and brokers that have a strong history of paying on time and in full. However, building credit can also begin with short-term funding solutions that consider the uniqueness of each contract and help your team maintain transportation needs through the immediate future. This ensures you are able to recoup your expenses while making a sizable profit with a faster payment window. Of course, that also depends on reviewing the fine print listed in each contract to ensure your team invoices all shipments properly. After all, an error on your end could lead to lost opportunities for profitability. And when things go awry, short-term funding can help you get over the hump.

Choose HaulPay to Finance Freight With Less Risk and Greater ROI

Today’s transportation industry is a living, complex organism, and like every animal on the planet, it requires regular energy—i.e., working capital in this metaphor—to live on and thrive. There are always going to be companies that have a poor credit rating and those that might put your livelihood at risk. However, you can offload those risks by choosing the right partner for your freight financing needs. ComFreight is that partner, and their solution, HaulPay, is exactly what you need. Request a demo to see how the HaulPay platform works. Learn more information on how to build credit as a freight broker or how commercial trucking financing for owner-operators works.

What Is a Freight Factoring Company & What’s Its Role in Freight Finance?

Finding the right freight factoring company can prove challenging, especially for smaller fleets. Freight factoring services can help with processes associated with trying to improve cash flow or mitigating financial risks that threaten the business. As billing for the freight industry becomes increasingly frustrating, many fleets and owner-operator carriers look to freight factoring for resolutions. 

The drive to remain competitive is always present but has reached new heights, thanks to the overwhelming increase in online ordering and the propagation of ecommerce. In addition to e-commerce, the number of avenues for ordering — or omnichannel ordering — continues to drive this need. Companies must also assess various other factors that are influencing the business, including the credit risks of a commercial shipping company. Hiring a freight factoring company can mitigate these risks and many others for carriers. 

What Does a Freight Factoring Company Do?

Many carriers and fleets do not know what to do when invoices become past due, rates continue to surge because of the pandemic and peak season, or they are faced with limited capacity issues. Factoring companies are dedicated to helping carriers navigate these difficult situations. To begin working with a freight factoring company, everything starts with a credit check and a commercial invoice

Freight factoring businesses verify the credit of a shipper or carrier, and then they front the cash for the client so that they do not need to wait the typical 30-90 days for an invoice to be paid. This keeps cash flowing for those carriers or shippers, and in return, the company takes between 1% and 5%. Essentially, it is a win-win scenario. With the market trending upward, keeping payments flowing will be imperative for this season. 

How a Freight Factoring Company Helps Shippers Find Capacity

To find more hauling contracts for carriers and more capacity for shippers requires expanding their network. Sure, shippers can search the databases, but that takes time they may not have. Freight factoring services have already consolidated the information and can help ease the stress of locating freight capacity in the following ways: 

  • Digitizing systems help centralize data. These services keep a database of their own, leaving shippers to do what matters most: keep their customers happy. 
  • Facilitating on-time payments, which will help prevent load rejection. At times carriers can reject loads based on a shipper’s ability to pay on time. Preventing that begins with finding the best freight factoring company.  
  • Providing services that give shippers the funds they need when they need them. Shippers can find themselves needing capacity but without the funds to secure it. Hiring a freight factoring business provides that freedom while offering a steady payment plan. 
  • Allowing shippers to see side-by-side rate comparisons and availability in real time. Some shippers need to see their options because they may only need a partial or LTL. Knowing where they can move their freight and their rates in real-time help save on costs in the long-term by pairing them with the suitable carrier for their load. 

The Role of Factoring in Shortening the Payment Clock for Carriers

Like any worker in any industry, carriers would prefer to get paid sooner rather than later. The freight payment clock starts to tick the moment a carrier accepts a load. Although carriers need the payment to continue their businesses, sometimes shippers cannot provide payment until 30-90 days later. This seems like a short time, but consider the costs associated with freight transport do not stop while awaiting payment. According to Logistics Management, freight payment as a whole is in need of a major overhaul. From providing an invaluable service to using the services to prevent fraud, the role of factoring eliminates a lot of “what-if’s”. An overhaul of freight payment has been on the horizon, and many experts agree the most successful leaders in the industry embrace technology, states Supply Chain Dive. For them and others in the industry, driving down external costs may lie within freight payment. 

Ways to Improve Factoring Through Digital Integration of Systems 

For other ways to increase your hauling income and improvements for the supply chain industry, experts look to digital system integrations. The top freight factoring companies use a variety of components that look to improve system processes from back-office tasks to provide more cash flow to carriers and shippers. These factors look like: 

1. Factoring Reduces the Delays Carriers Experience in Getting Paid. Freight factoring companies help shippers and carriers by giving them the majority, if not all, of the funds needed for their company. Shippers may experience a delay in freight payment or may just get behind with their accounting, but it directly affects the carrier. Carriers often must pay their up-front costs like fuel or repairs, leaving them in the red if they do not receive payment in time. 

2. Working With a Digital System Eliminates Confusion in Payment Processing. A digital, centralized software platform will eliminate confusion. User-friendly application platforms help users pay their installments at the touch of a button. Most technology now has smartphone capabilities, which means everyone can use them as needed. This software also automates specific invoicing or paperwork, eliminating the hassle of filling it out manually. 

3. Streamlined Document Management Allows for Faster Processing. Automating these processes also streamlines document management. Collaborative technology takes this software and allows users to process their items quicker by providing a centralized system to access documents. 

4. Improved Service and Detail-Oriented Systems Lead to Fewer Complaints and Delays. Without the assistance of human error, digitized systems within the freight factoring company community help improve overall service. These systems are created with details in mind, which means they catch issues before they escalate. This means less delay and more happy carriers, shippers, and customers. 

5. Next-Day Payment Processing Improves Working Capital to Help Carriers Stay Operational. For many carriers, faster is better. Keeping cash flowing for smaller fleets or owner-operators means keeping them on the roads. This gives way to more capacity for shippers. All in all, next-day payment processing keeps everyone operational faster.

6. Integration Further Allows for Better Reporting and Control Over Freight Spend, Whether That’s a Shippers Total Spend or a Carrier’s Overhead Costs. Cost reduction is the ultimate goal for shippers and carriers. Keeping data at hand and continuous freight auditing will lower costs for both parties. 

Boost Finance in Your Network by Becoming a HaulPay User.

Shippers, carriers, and the ultimate customer all benefit when the right network comes to bat. Boosting finance has never been easier. By obtaining next-day payment and immediate processing, carriers and shippers receive the funds they need almost immediately. This keeps carriers on the road and shippers demanding capacity, everyone wins. 

To experience the benefits and achieve overall business growth by using a freight factoring company, request a demo to see how the HaulPay platform works.

What Do Freight Payment Service Providers Offer & What Are the Benefits?

For companies to grow and scale, adopting freight payment services that strengthen specific business processes is absolutely necessary. The multitude of advantages that technology provides allows parties across the board to benefit in many ways. Not only do these tools amplify efficiency but they also mitigate risk and lower costs.

They Offer Broker, Third-Party, and Carrier Factoring

The best freight payment companies also offer brokers and carriers a third-party freight factoring company at a flat rate through accessible and streamlined technology. Other beneficial services include providing freight finance for receivables to freight brokers and offering quick pay at various rates to carriers. Another serviceable feature is transportation or freight factoring with no minimums, no reserve, and a low flat rate. This provides carriers with obtainable options when trying to secure the best hauling contracts.

Load Board Integration Payment Management Helps to Keep Freight Moving Without Added Costs

The digital technology that freight payment service providers offer for shippers and brokers keeps freight flowing smoothly and substantially reduces costs. Integrating online load boards (that offer a listing of digital freight options) allows shippers/brokers to post loads and gather bids on freight from the expansive pools of quality options (from other brokers and carriers). Through this service-enhancing method, negotiating rates becomes simplified and instantaneous, including lane matching with real-time alerts when loads and trucks match. The accessibility that these tools provide allows for a shipping company to accurately measure capacity and have access to the best terms possible.

Prepaid vs. Collect Freight Are Other Options for Those With High Uncertainty

Having different options on freight arrangements eases uncertainty. With a prepaid option, the shipper is responsible for shipping charges and ancillary expenses. When using the collect freight option, the receiver covers the freight charges. This is also known as “collect upon arrival,” and includes any additional shipping charges.

Digital Credit and Cost Underwriting Is Useful to Helping Unlock More Value With Limited Resources

In the modern supply chain network, freight payment providers should offer solutions that empower logistics companies to grow. Even if a business has limited resources, unlocking potential opportunities should still be a possibility. Integrating a digital credit and underwriting platform to establish or maintain credit is key for growth and mitigating risk. As further explained by Jack Glenn of FreightWaves, “Not only does credit insurance allow companies to mitigate risks beyond their control and protect against non-payments, that same credit insurance also allows companies to explore growth opportunities with existing customers. Insured companies can sell on open account terms where they may have previously been restrictive or only sold on a secured basis.”

Benefits of Multiple Freight Payment Services

With a wide array of freight payment services and options, companies reap the benefits of convenience. Many manual processes have been replaced with modern technology that enhances business and amplifies efficiency. These accessible options allow organizations to lower costs and scale through automation without a significant amount of money or change. As these tools can be integrated with current systems, no rehauling of the entire system is required. These benefits include:

  • Better cashflow – Streamlined tendering and transactions allow for automated payment collection, for both commercial invoice processes and regular invoice processes.
  • Fewer delays in getting paid – No more confusion or delays on payments that cost the company valuable time and resources.
  • Lower risk – Risk is mitigated and minimized through accurate reporting and invoicing.
  • Increased cost forecasting – Insight and analytics provide companies with a deep understanding of current rates and deals.
  • Improved driver and employee morale – With magnified awareness, optimal deals can be generated resulting in both driver and employee satisfaction.
  • Business reputation gains – Good and fair business creates a reputation that has a ripple effect across the entire market, which leads to more customer acquisition.

Start Reaping the Rewards of Digital Freight Payment Services with HaulPay by ComFreight

In the modern fast-paced transportation market, businesses must do everything they can to stay ahead of the curve. By offering freight payment services that benefit shippers, brokers, and carriers, companies can exponentially grow without the major risk often associated with change. Improving business no longer has to come with overwhelming challenges. Start succeeding. Request a HaulPay demo today.

What Is and What Are the Types of Freight Payment Services & Options

Today more than ever, managing payment reporting and providing logistics excellence within the supply chain is essential for achieving continued growth and profitability. Finding the right mode of transportation can be challenging enough, but securing payments can be equally daunting. Network managers must balance local needs and restrictions with an increasingly global focus on transportation management and various freight payment processes. And with transportation costs increasing around the world, cost controls and guidelines have become more vital than ever for the modern-day transportation network manager. 

What Does Freight Payment Services Mean?

Freight audit and payment are vital services that keep the supply chain functioning smoothly by ensuring payments are made and received for services rendered during shipping. The freight payment process focuses on auditing and paying freight invoices promptly to prevent missed opportunities and payment delays. It also focuses on collecting the data needed to create records and reports that track freight spend, commercial invoices, and logistics payments throughout the supply chain. Global managers aim to standardize practices and collaborate with a worldwide partner to solve  challenges. The key to freight payment services is managing these expenses and overcoming difficulties with invoices and payments as efficiently as possible within the network.

Problems Surrounding Traditional Logistics Payment Processes

One of the most significant challenges associated with freight payment services is cost management. Reducing freight spend and lowering shipping overhead costs is vital for ongoing growth in today’s competitive global market. Any way the freight payment process can improve is critical. According to The Journal of Commerce Online, reducing freight spend can have a tremendous impact on profitability. Consider this: A shipper with $1 billion in revenue could end up paying $50 million to $100 million in freight spend. This same company could end up managing over 40,000 invoices in a single year. All of these costs and expenses can quickly add up and eat into profits. Therefore, freight payment process management is critical to achieving sustained profitability.

Defining the Top Types of Freight Payment Services

Knowing the various freight payment meanings is critical to understanding how they can impact the supply chain network. Developing industry and company-specific freight carrier payment terms can help managers to easily determine the right freight payment services for their unique needs. Some of the more common options include:

Broker or Third-Party Factoring

Freight brokers provide financing and payment reporting on behalf of the company, usually for a flat-rate fee, which enables shippers and carriers to focus on tasks other than invoicing. This is thanks to the use of online dashboards, apps, and innovative software.

Carrier Factoring

This unique option provides services with no minimums, no reserve and a low flat rate. Carriers experience additional peace of mind while securing the best rates with easy-to-follow steps that help to streamline the freight payment processes.

Load Board Integrated Payments

Shippers and brokers use online load boards to post loads and get bids from a vast pool of brokers and carriers. This allows for faster capacity management, easier rate negotiation, and access to the best freight carrier payment terms.

Prepaid Freight

When logistics managers and directors have a general idea of what their freight loads will cost to ship, a prepaid approach may help free up team members and give management one less concern.

Collect Freight 

This option for supply chain payment reporting focuses on the amount of freight that gets transported and presents the shipping rate based on volume, weight, or several shipments made. This method is based on a predetermined base fee.

Digital Credit and Cost Underwriting

Additional fees such as inspections, legal fees, customs and duty fees, and similar operational expenses also need to be considered when managing payments and finding the correct freight carrier payment terms. 

Maximize Profitability Quickly and Easily With the Right Freight Payment Options

From implementing the right freight payment software and processes to choosing from among the many types of freight payment available, it is essential that the freight payment services align with the needs and goals of the transportation service providers implementing them. Get a demo today of HaulPay, a ComFreight product, to see how the platform streamlines freight payment processes.