The Loading Life: How Freight Brokers Can Find Carriers Fast

freight brokers

Shippers use freight brokers because of their expertise in the field of logistics. Freight brokers know what carriers can meet the shipper’s transport needs. And brokers have the tools to find carriers fast.

The logistics industry has a lot of moving pieces. Shippers, carriers, and consignees all need brokers to coordinate their interactions. And there’s no time to waste!

Logistics are crucial to U.S. commerce. Without a fast-moving shipping industry, the business would come to a grinding halt. Discover ways that freight brokers can find carriers fast.

Try Cold Calling

Once you find the name a freight carrier you’d like to use, it’s easy to find a phone number in a business listing. Many carriers have adopted technology for tracking, but relationships are still developed on the phone. Email and web forms are typically not the preferred methods of communication.

When you call a carrier, don’t try to sell yourself as the best broker they’ll ever work with. It’s good to describe your needs, such as where you’ll need to move freight, the size of the loads you need to be transported, and the frequency. Most in the logistics business will be impressed with action, not grand promises.

Show an interest in how the freight carrier currently transports their freight. Get ready for a lot of carriers to turn you down. But sometimes it’s just the luck of the draw. You might hit a carrier that has a need to fill.

Build Personal Relationships

The transportation industry is very much a business of relationships. You’ll need to build a solid reputation if you’re going to be a successful broker. You’ll need to have a good rapport with shippers, consignees, and carriers.

It’s not just about getting your carriers some freight to move. They’ll want you to share their values. And not just “corporate values.” 90% of trucking businesses have six trucks or less. Truckers want you to have the same values they grew up with. And nothing will get you more business like doing great work for your current customers.

Carriers are going to talk to one another. Establishing s referral system is a great way to generate new business. Come up with a single sheet that explains your program and send it to shippers.

Find Leads with Everyday Products

Most products surrounding you at the moment spent time as freight and were transported on a truck. Office furniture. Delivered by truck. Cars. Delivered by truck.

The device you’re reading this on? Truck. Just look up the products you use every day. Find out where they are manufactured and how they are delivered.

An easy way to find carriers is to think about the items that you’ve ordered yourself. Review bills of lading, tracking numbers, or other shipping info to find carrier names. By doing so, you can find local carriers that contract to national networks, expanding your options.

Give Internet Search a Shot

More and more carriers have started recognizing the value of having a web presence. The reason for the slow adoption is that many carriers are small businesses or independent contractors. There are internet load boards to find a near unlimited supply of qualified carriers.

Work with great carriers. If you’re going to build a network of the best carriers, you’ll need a reputation of working with the best. Do you have policies with carriers setting expectations for deliveries? Are you ranking your carriers’ performance over time?

Create Your Own Detailed Systems

When you have a shipper request, can you quickly locate carriers you’ve used in the past for the shipper, consignee, or cities involved? Can you pull up a bill of lading that shows performance data on the delivery? Having quick access to this data can help you select a carrier fast.

Some shippers require carriers to have a certain safety record. They may ask to see a copy of the terms and conditions you have set up with the carrier. Having this information will give you a huge advantage over other freight brokers.

Know Your Freight

You’ll really need to know your freight if you’re going to convince carriers to haul for you. Some carriers prefer certain kinds of freight. Sometimes equipment can be more suited for other goods. You’ll have more success with a carrier if you can describe the type of freight.

And even more, if you can discuss how it compares to products they are currently transporting.

You’ll also be able to qualify your carriers easier and faster. You’ll know who’s sure to be on time for critical freight. You’ll know who has the best record for fragile shipments. And you’ll know who offers the most competitive rates.

Master the Ins and Outs

Along those lines, it will benefit you to become a master at setting uploads in advance. If you ask a carrier to transport freight into Albuquerque, you’d be smart to already have a load set up to come out.

Carriers don’t want to be stranded in a city with no way out for days at a time. Every day the truck sits empty is money lost. Carriers will want to work with you if you promise a quick turnaround. Drivers want to get on to their next destination or on their way home back to their families.

The logistics industry can be called the lifeblood of U.S. commerce. The human body transports oxygen and nutrients throughout the body using the blood. Just like businesses send goods throughout America using freight carriers. The brain regulates and keeps the circulatory system running smoothly. Similarly, freight brokers help organize shipments and carriers.

Remember the Other Transportation Methods

Truckload motor carrier services are a common arena for freight brokers. But there are other shipping methods out there. Some parts of the country are well served by air freight and rail.

If you keep these other shipping options in mind, you may be able to find a carrier faster. You’ll also develop relationships with even more carriers.

Find Carriers Fast

Brokers must know how to coordinate the needs of shippers, consignees, and carriers. Because critical issues can come up at any time, freight brokers must be ready to respond quickly.

The logistics industry relies on freight brokers to ensure that shipping goes smoothly. Brokers need advanced tools to find carriers fast and coordinate delivery. Sign up for the ComFreight Logistics Marketplace for free. Find empty trucks and carriers now!

How to Finance a Trucking Business Expansion

Trucking Business Expansion

Without trucks, the American economy comes to a complete standstill. 3.6 million heavy-duty Class 8 trucks transport 10.5 billion tons of freight each year.

Are you the owner-operator of a trucking business? Read on to learn ways that you can finance your trucking business expansion. 

SBA Loans for Trucking Funding

Your local Small Business Administration (SBA) may be able to give you a very low interest rate to finance your trucking expansion.

SBA loans are generally long-term loans. You can borrow up to $5 million with a repayment term of up to 10 years for equipment.

If you want to buy several trucks, open a new location or buy a competitor, an SBA loan is a good place to start. 

Operating Lease

If you need access to new trucks, but can’t afford high monthly loan payments, an operating lease may be a good fit for you.

With an operating lease, you lease (or rent) a truck from a supplier. You don’t own the truck. At the end of the term, you give the truck back or pay fair market value to keep it.

The monthly lease payments are quite lower than many loan payments which makes this option good for business owners who need to keep costs down.  

Small Business Line of Credit 

Another option for commercial vehicle financing is a business line of credit. The good thing about lines of credit is that they are not a one-time loan.

A line of credit gives you access to a set amount of funding. As you pay it down, you can use the funds again. This way you can fund your company’s growth.

And, you only pay interest on the amount you use, not the full amount of the line of credit. Having a line of credit for an owner-operator trucking business gives you peace of mind because you have access to funds should you need them for unexpected costs.

You only need to apply once and then you always have that line of credit available for you to use as needed. Don’t forget that your business has various tax deductions that can help you save money come tax season. 

Equipment Financing 

When you want to replace trucks or acquire new ones to add to the road, equipment financing is a great option. Basically, you use your existing trucks or other equipment as collateral for the new loan.

Because the loan is secured (through your collateral), the lender can afford to give you a lower interest rate.

It is common for new and expanding trucking companies to choose this financing because it is a long-term option that comes with low interest rates. Typically, you can expect to pay between 6-9% interest.

Best of all, there’s no penalty to pay off the loan early. So if business is booming, go ahead and pay off the loan as soon as you can. 

Short-Term Trucking Business Loans

Short-term trucking business loans work best for companies that need to take on a new expense in order to grow their business. 

Let’s say you have a profitable new route available to you, you’ll need to fund the labor and other expenses for the job before your customer pays. This is when short-term loans are worthwhile.T

You can get approved for a short-term loan in one day, which makes it a great way to get funds quickly. 

Be careful though, the APR can be as high as 50%. Yet, if you repay the loan within the first year, the total cost is a pretty good deal.

If you plan to pay this loan back in full as soon as your customer pays you, it’s a great option for expanding your trucking enterprise.

Invoice Factoring

It’s important to understand that loans aren’t the only options for trucking funding.

One -outside-the-box option for you to consider is invoice factoring. This option lets you turn unpaid invoices into cash. 

You sell your unpaid invoices to a factoring company who pays you cash for the total amount minus a small percentage. This factoring company then deals with your customers to get paid.

Not only does this give you an influx of cash all at once, but it also frees you up from having to work on accounts receivable work. 

Plus, invoice factoring doesn’t impact your credit rating in any way. You can get your funds in just a few quick days from a factoring company.

Invoice factoring is not a loan. It’s just a smart way that you can get an influx of your cash without going into debt.

Working Capital Advances

Another trucking finance option is a working capital advance. This option is not a loan. It is a new source of funding for various types of business.

These advances give you funds upfront that you will then pay back over several months. The advance amount you qualify for depends on your company’s revenue.

Over the following months, you will put a certain percentage of your income to pay back your advance.

This option is not available to everyone. To qualify, you must be in business for a minimum amount of time and earn a certain revenue each month.

Approval is easy and only takes a couple of hours. That means the cash could be in your account in just a day or two.

If your trucking business has got a steady track record, this may be your best bet. 

Final Thoughts on Trucking Business Expansion

Thanks for reading! We hope this guide helps you understand your options for your trucking business expansion.

The fast, open load matching and freight bidding marketplace of the future is here! Learn how Com Freight works and get started today.

Secure Trucking Contracts: What is a Freight Load Board and Why Should I Use One?

trucking contracts

There are 3.68 million Class B trucks moving 71% of the country’s freight across this great nation. That’s 10.55 billion tons of freight moved every year.

So how can your carrier business get a piece of that huge pie? You win trucking contracts, that’s how. But wait, that makes it sound too easy.  

When you have access to load boards, it is that easy. Not sure what a load board is? Don’t worry, we’ve got you covered. Keep reading to learn what a load board is, how it works, and how it can benefit your carrier business. 

What Is a Load Board?

A load board or freight board is an online marketplace that allows freight shippers to post their needs. Then carriers can bid on these shipments. 

It works to create a centralized location to connect shippers, carriers, and brokers.

How a Load Board Works 

Load boards are hosted online and work as an online portal that shippers and carriers log into. Some boards require users to pay a fee for access. 

The Carrier 

We are referring to carriers, but load boards work for truck owner-operators, small fleets, and larger freight companies. The process works the same for all of them. 

When a carrier sees that they have empty trucks, they can log into the load board and look at the listings posted by shippers. They will narrow down the listings based on load size, pay offered, and geographical origin and destination. 

This allows the carrier to find the loads that fit their services. They wouldn’t want to pick up a shipment headed to California if their lanes are all focus on the east coast. 

Once they find a shipment that fits, they can bid on it. At this point, they are competing with other carriers who are also bidding on the shipment. 

Sometimes the shipper is purely money motivated. In this case, the shipper will pick the lowest bid. The carrier will need to know how low they can bid while still remaining profitable. 

On the flip side, the carrier can also post empty trucks. This is useful for when you have a shipment going to an unpopular destination. You can then pick up a shipment for the return trip and cut your operating costs. 

The Shipper 

Shippers will use the load board by posting their needs. This could be a business that delivers oversized products, such as furniture. 

They will sell their item, then post on the board where the item is located, where it needs to go, and information about the item. Relevant information includes the dimensions of the item and its weight. 

It is also vital to include if the item has any particular restrictions. This becomes important when the item is perishable or considered hazardous. Both of these types of shipment have special requirements that limit who can transport them. 

The shipper will then field the bids from potential carriers. Often, they will reach out and negotiate the specific terms. They will then choose one and move forward. 

Shippers can also browse the open truck listings. This is a great way for them to score deals. Most carriers offer discounted rates on these return shipments since the carrier made the bulk of their money on the outgoing shipment. 

The Benefits of Using a Load Board 

Load boards provide a platform to make it easy for shippers and carriers to connect. It gives carriers one central location to access potential customers. This reduces the time and labor cost of finding new business. 

Intuitive 

Most boards are easy to use. They will display all of the necessary information for you to make an informed decision. 

Up to Date Information 

The best load board will give real-time information. This way you have the most up to date information and opportunities available to you. 

If you want to stay competitive, you need to act fast and bid competitively. You can’t do this with out-of-date information. 

Affordable 

Many load boards are going to be free or charge a low amount to use. This makes them a smart investment in the future of your business. 

Mobile Friendly

If you are a smaller carrier or a driver that owns their own truck, you don’t have a lot of free time to hunt down loads. Load boards today are mobile optimized.

That way you can hunt your next shipment while out on your current shipment. Now you reduce your downtime, and as we all know, downtime means lost profits. 

Available 24/7

Best of all, load boards are up and running 24/7. You are no longer limited to business hours to call on potential shippers. 

Integration

Look for load boards that can integrate with your existing systems. Many load boards offer an API that can allow direct access to the board from your own portal site. 

This allows you to book and manage your shippers quickly and easily from one place. 

Score More Trucking Contracts

These days load boards are the go-to way that truck owner-operators and small freight fleets find new loads. It gives them one easy to use portal for finding new shipments. 

This reduces their labor costs in trying to go out and hunt down their own shipments. With an effective bidding strategy, they will have enough trucking contracts to keep their trucks full and on the move. 

After all, you aren’t making money if the truck isn’t moving freight. So stop staring at your empty trucks and start winning bids. 

Sign up today for our freight loads board and start finding loads and getting paid. 

Don’t Forget the Write Offs! Tax Deductions for Truck Drivers

tax deductions for truck drivers

There is over 1.8 million truck driving jobs in the United States. And the industry needs more drivers.

There are great reasons to become a truck driver. The pay is good and there are tons of benefits like a full pension, health insurance, and a 401k. 

The downside is you travel a lot of the time. But sometimes, that travel pays off in other ways. 

Especially when it’s time to pay your taxes. Luckily, there are a few tax deductions for truck drivers most other people don’t get. 

We want to help you get a bigger refund this year. Keep reading to learn what truck driver deductions you need to know about. 

Determine Your Tax Home in Order to Receive Tax Deductions for Truck Drivers

Since truck drivers travel so much, it’s often harder for them to have a permanent home. However, if you want to claim any deductions, the IRS requires you to have a “tax home”. 

A tax home means you must have a permanent location where you receive mail. You’ll need to use that same address to pay your taxes. 

When to Use your Business as a Tax Home

Most use their regular place of business as their tax home. In this case, it won’t matter where you live. 

Your tax home also includes the whole city or general area where your business or work is located. For those with more than one business location, use your main place of business as your tax home. 

When to Use Your Home as a Tax Home

If there is no main place of business, use where you live regularly as your tax home. And for those who don’t have a regular place of business and no home you live at regularly, you’re considered a transient. In these cases, your tax home is wherever you work. 

Travel Expenses

Truck driver expenses differ depending on whether you travel for work or not. If you’re local, you can’t deduct travel expenses.

Travel Expense Requirements

To get travel expense deductions you must be away from your tax home for longer than a day’s work. You also must need to sleep or rest due to work demands while away from home to use travel expenses. 

If you return from work the same day you left and also have an hour off for lunch in between jobs, it’s not considered traveling from home. 

Common Travel Deductions

However, if you do travel for work, you can deduct expenses such as transportation to and from work. Expenses also include your meals, including tips. 

Keep in mind that there is a per diem cost for meals of $66 per day. 

Your lodging is also considered a travel expense. Always keep all of your on-the-road travel receipts. 

Keep a List 

You should also create your own tax deductions for truck drivers list to help you document the amount, time, place, and business purpose for each expense to back up these expense claims. 

Personal Necessities

Other truck driver tax deductions you can take are personal necessities. These are only items you’ll need to work on the road. 

Which means that any calculators, overalls (or other specialized clothing), luggage, log book papers, gloves, sunglasses or coolers for food are deductible. Even mini-fridges and bedding for your sleeping berth are deductible.

However, items such as gifts for your family or a new suit that’s perfect for a wedding you found while traveling for work are not deductible. 

Electronics

Keep in mind, you can only use electronics as a deduction if you only use them for work purposes. As long as they’re only used for business, you can even deduct repair costs for these items. 

Deductible electronics are your DB radio, GPS, and GPS map updates. If you have a cell phone and/or laptop you use for both personal and business, don’t worry. 

You can still deduct up to 50% for these items.  

Truck Upkeep Expenses

Keep in mind that truck driver taxes differ from others who use a vehicle for business purposes. The IRS qualifies semi-trucks as non-personal-use vehicles. 

Therefore, the standard mileage method isn’t applicable but other actual expenses for the truck are. Some common deductible truck expenses are for:

  • Fuel
  • Insurance
  • Oil
  • Repairs
  • Washing

Other expenses like batteries and tires are also tax deductible. And you can take these deductions whether you own or lease your truck.

You can not deduct any costs that are reimbursed by your employer. Also, check to see if there are any cost limitations. 

Expenses such as fuel are only a deduction if you’re paying out-of-pocket, it won’t be reimbursed, and it doesn’t exceed $100.

Fees and Dues

Most truck drivers are required to have some type of union or collective trucking group affiliation. You can deduct the dues for those memberships. 

If you’re not required to be part of a union but wish to join one, you may still be able to deduct the expense. Just make sure you can demonstrate that your membership helps with your career. 

Licensing Fees are Deductible

There are also licensing fees associated with getting and maintaining your commercial driver’s license. And these fees are also 100% deductible. 

You can also deduct any costs associated with your continuing education requirements. 

Publications are Also Deductible

If you subscribe to a trade magazine or journal and it’s directly related to your work, it’s deductible. 

Load board subscription fees are also usually a legal deduction. 

More Deductions for Owner-Operators

There are other truck driver deductions for those who are owners or operators. If you fall into one (or both) of these categories, you can also deduct the cost of your insurance premium payments. 

There are also the leasing fees for the truck and any interest payments you made on your loan. The loan must be for the truck’s purchase or any upkeep. 

Depreciation Deductions

Also, vehicles begin depreciating as soon as they’re purchased. And it’s something you can deduct. 

You can use this deduction for every year the truck is owned, used, and depreciates in values. 

Check with an accountant or the IRS to see how much you can deduct from your vehicles each year. 

Learn About All Your Deductions

While we mentioned quite a few tax deductions for truck drivers, there are still more. Always ask your accountant to see if there are any other typical deductions you can use. 

Also, always keep your receipts and document what you can during the year. You’ll find tax season is far less stressful this way. Click here to learn how to prepare for this year’s tax season

Strategic Freight Bidding: 7 Tips For Developing a Successful Bid Strategy

freight bidding

Thanks to skyrocketing freight rate hikes in 2018, many shippers are changing their strategy for 2019. Spot truck rates increased a whopping 20% from 2017 to an average of $2.14 per mile.

So how are you going to adjust your freight bidding strategy? You want to take into account the changing industry trends for both the rate and shipper bidding strategy and still remain profitable. 

Keeping reading for a guide to developing a successful bidding strategy for your commercial trucking company.  

1. Know the Market

You can’t start successfully bidding if you don’t know what the current market rates are. There is no doubt that shippers have their thumb on the pulse of marketing pricing. So you better know it too. 

Use cold hard facts and data to know the historical pricing of each lane. Then combine this with a bidding software solution. 

By combining these resources you take the manual labor factor out of the process. Your software will alert you to annual drops and raises in price for a particular lane.

That way you aren’t under or overbidding. For example, we mentioned at the beginning of the article that we ended 2018 with rates at $2.14 per mile.

But by the end of January, they had dipped below two dollars. If you aren’t keeping up with the market, then your rates will be off.

The second advantage to keeping in touch with the market is that you see trends and are able to adapt and adjust with the changing market. Remember, successful companies do not operate in a vacuum.  

2. Know Your Competitors

Before you start creating your competitive bidding strategy, you need to do your research. Find out what your competitors are charging.  

This process of knowing where you stand is called mapping your competitive position. This strategy works because it doesn’t just compare price. It compares price with the benefit the customer receives from the product. 

By doing this dual comparison you take into account that a higher priced product may be providing more of a benefit. This would make the higher price worth it in the eyes of the customer. 

Keep in mind that this is not a one-time project. Just as you change your bid strategy, so do your competitors. So this research should be ongoing. 

3. Optimize Your Bidding 

Have a conversation with your team about what opportunities are best for your fleet. What lanes do you underperform in? What lanes do you dominate in? 

Use this data to help shape your bid strategy. If you want to improve underperformance, figure out why and focus your bidding in that area. 

Or maybe you decide to cut the underperforming lanes. Then you can dedicate more resources to the lanes that you dominate in. 

4. Stay Consistent 

Whatever strategy you are your team decide on, stay consistent with it. This will be the only way to tell if it works for your company or not. 

After you stick with the strategy for a while, and you have sufficient data, then you can analyze its performance. If you find that your strategy has holes or lacks in areas, then you can address those. 

When you do decide to make changes, only make one adjustment at a time. Otherwise, you won’t know what change works and what change isn’t. 

5. Leverage a Solution to Maximize Profit 

Now that you have your strategy in place, you need a bidding platform and management solution that will help you maximize your efforts. This will save you in both effort and time. 

You will want to look for a service that can fully integrate into your other software and programs. That way you have a seamless workflow from bidding, to shipment management, to invoicing and accounting. 

6. Get Familiar with Mini-Bids 

Shippers are now using a strategy called mini-bidding. This is where shippers bid out only a small portion of their volume. This is different from years past where shippers leverage their high volume to negotiate for lower rates. 

With the price hikes though, using their entire shipping volume exposes them to a great amount of financial risk. So by mini-bidding, shippers can limit the burden of annually bidding their entire network.  

The advantage for carriers when they agree to these “surgical bids” is that they don’t have to completely redraw the lanes map every year. The extensive annual bidding process is time-consuming for both parties. 

Consider agreeing to longer than a year generalized contracts. Then more frequent mini-bids throughout the life of the contract. 

7. Don’t Assume You Have the Upper Hand 

They silliest mistake you can make is to let your guard down on an existing relationship. Just because you have a relationship with a shipper doesn’t mean that you no longer need to cultivate that shipper’s business. 

Many shippers will analyze current relationships and rates as a way of culling the budget. So be sure to make compelling bids that make the shipper feel as though you are a “value-added” service. 

Develop Your Freight Bidding Strategy

With the beginning of the year comes bidding season for the freight industry. To ensure that you stay competitive and have a strong bidding strategy you need to stay on top of industry trends. 

This means understanding both lane rate trends and shipper’s changing negotiating strategies. Carries can no longer approach freight bidding with ambivalence. 

Once you have your bidding strategy in place, you need to optimize your system. The best way to do this is to streamline your internal processes by integrating your bidding, tracking, and financial processes. 

Learn how you can integrate with ComFreight to make invoicing and load matching easier. 

Ready for Tax Season? Top Tips for Filing Your 2019 Taxes as a Truck Driver

2019 taxes

Every year, people spend approximately 13 hours preparing their tax return. But when you’re a trucker and are in charge of your own business, that number can quickly go up.

The more time you have to spend taking care of your tax return is less time you can be out on the road. This cuts into your bottom line and hurts your profits.

But that doesn’t mean you can’t shorten the amount of time you’ll spend getting your 2019 taxes in order. You just need to have the right strategy in place.

And it’s far easier than it sounds!

We’ve put together a few simple tips to help make getting your tax return ready as simple as possible.

Start Compiling Your Receipts

When you’re an owner-operator, business expenses happen almost every day you’re on the road. Everything from lodging to repairs could be a qualifying business expense.

But you can only claim them if you have the receipts to prove how much you spent. Without the receipts, you’re stuck paying for those things out of pocket.

Have a look through the cab of your truck and pull out any receipts that might have slipped beneath the seats. Once you’ve found as many as possible, start looking at the types of purchases you made.

Organize the receipts by category: lodging during forced layovers, repairs, office supplies, union dues, and work-related costs. The more organized you keep the receipts, the easier it will be to prepare itemized deductions.

If you’re an employee with a trucking company, the company should have reimbursed you for many of those expenses. If not, speak with the human resources coordinator with your company to discuss compensation.

Keep in mind that any expenses a company reimburses you for cannot be claimed as a deduction on your 2019 taxes.

Get Documents in Order

If you work as a full or part-time driver with a company as an employee, you’ll receive a W-2 to report your income. Owner-operators, on the other hand, should receive a 1099 MISC form from each company they contract with.

Both forms must be sent out by January 31. If your employer has not sent out W-2s by that date, they’re subject to fines.

For contract employees, it’s a bit different. Companies are required to send you a 1099 form if you make more than $600 on a run. But that doesn’t mean they always will.

Go through your paystubs, checks, and direct deposits and add up how much you’ve earned from January to December 2018. This way, you’ll have a clear picture of your earnings even if a 1099 form gets left out.

Check all earnings against the invoices you sent to companies throughout the year. If anything is inaccurate, try to resolve it as soon as possible.

Catch Up on Quarterly Payments

This is not necessary for employee drivers, but for owner-operators, quarterly tax payments are required.

Ideally, you should have made three quarterly tax estimate payments during 2018. If you missed one or paid less than you should have, make a larger payment for the last quarter.

Remember, the IRS charges you fees for missing quarterly payments as well as underpaying on those quarterly payments. Sending a larger payment in for the fourth quarter of the year will help you avoid those fees.

This is also the perfect time to get ready for the next year. Put reminders in your phone’s calendar to tell you when it’s time to send a quarterly payment. If possible, set aside money from each payment to cover those taxes so you’ll have it on-hand.

No one likes sending those quarterly payments in, but doing so will save you money and frustration in the long-run.

Compile Both Employee and Contractor Tax Info

In some cases, drivers switch between working as a company driver and an owner-operator. Since you get two different tax forms, it seems only natural to file two separate returns, right?

Luckily, you don’t have to. If you made the switch from employee to owner-operator mid-year, you won’t have to file more than one return. Instead, you need to include both incomes on your single return.

The same is true if you switched career fields. Your old job’s earnings should be reported with your earnings as a driver.

Figure Out Where Your Tax Home Is

A tax home is where you do the majority of your business. This means if you report to the same company in the same town for business, that location is your tax home.

If you’re an owner-operator, on the other hand, your tax home may be your place of residence.

Tax homes are how the IRS determines whether or not your travel costs are tax-deductible. For most truckers who travel away from their tax home for more than one day, those expenses will be deductible.

However, if you do mostly local deliveries, costs for food, lodging, and other related expenses are your responsibility to cover. You cannot use them to decrease your taxable income or offset how much you owe the IRS.

Don’t Be Afraid to Get Help on 2019 Taxes

Taxes are difficult for everyone, but for truck drivers, they can be even more complex. Instead of trying to handle things on your own, consider working with an experienced accountant.

They’ll take all your receipts, wage statements, and records to determine how much you owe the IRS. Best of all, they’re familiar with the tax code and can help you maximize deductions to save you even more money.

Final Thoughts

Paying your taxes on time is easier when you stay organized throughout the year. All it takes is a bit of determination and persistence. Keep track of your expenses, save your receipts, and get help from an experienced accountant if you need it.

The more prepared you are for your 2019 taxes, the better off you’ll be. Need help getting your business’s recordkeeping more organized? Contact us today and see how we can help!

The Ultimate Guide to the Ins and Outs of Freight Factoring

freight factoring

Stuck in a financial rut with no financial options left? For trucking companies in need of urgent financial help, freight factoring may be something to consider.

Not sure what that is? Let alone, if it’s right for your financial situation and business?

We’ve got you covered; read on to learn trucking factoring basics including what it is and the pro and cons that come with it.

Freight Factoring Explained

One thousand of the biggest public U.S. companies took an average of 56.7 days to pay their bills in 2017. This is up 3.4 points from the year before (2016).

So if you’re waiting for that invoice two months in you’re not alone. With operating costs adding up, a walk to the bank for a loan may seem like a good idea.

As Syracuse University professor, Kenneth Walsleben, told the New York Times (NYT) going to your local bank for a loan are long gone.

He tells NYT that small business now can turn to more creative lending options, many of which are more expensive than traditional loans. With time and more demand for creative lending, Walsleben mentioned to NYT that some of these alternative loan options have gone down.

The key word to remember? Some. What does this mean if you’re looking for an alternative loan? Research, research, research. (But we’ll talk more about this later.)

Some types of alternative loans borrowers can search for include lease-back and nonbank loans, peer-to-peer loans, asset-based lending, and, yes factoring, plus more.

So What is Freight Factoring?

Freight factoring is a type of alternative financing.

Trucking companies that are stretched thin can sell a part of their invoices to a third party (aka a factoring company).

In a couple of days, the factoring company gives the trucking business a percentage of the invoice value.

This is the biggest perk considering trucking companies might wait a couple of months before receiving that same money from the client (but read on, there’s more).

Once the clients pay the invoices, the factoring company gives the trucking business the balance. The trucking company also pays a factoring fee or transaction fee.

The Trade-Off: How Much Do Factoring Companies Cost?

Is it cheaper for trucking companies to wait for the customer to pay the invoice? Yes.

But, waiting for 14, 30, or 60 days for that paid invoice may not be an option for trucking businesses neck high in utility bills with payroll coming around the corner.

Here’s the trade-off: You pay more for access to available funds right away. Or, you save more and wait for clients to pay.

Who is Trucking Factoring For?

Like most forms of alternative loans, freight factoring is a financial option for trucking businesses that are out of options. They’ve repeatedly applied and have been denied for traditional loans from banking institutions.

They’ve opened up and maxed out several lines of credit, and have played the credit card game of opening and maxing cards.

Family and friends already have donated or loaned their business money and don’t have any more money to give.

With operating costs stacking up and a pile of overdue bills that still need to be paid, such trucking operators are out of traditional and less expensive options.

On the edge of bankruptcy, freight factoring may be an option for trucking companies to consider.

Think of it as a temporary, financial crutch to help your business get back on track.

A Possible Option for New and Seasoned Trucking Companies Out of Financial Options

Load factoring can be for new trucking companies just starting, that need financial help with start-up costs.

They can’t get a traditional loan and have already bugged family and friends for donations and loans. Let alone, they’ve depended on credit cards to get them by the start-up phase but have little to no available credit left.

It can also be for more seasoned trucking businesses that want to expand and need help to make up the financial gap. Like with the start-ups, they’ve explored traditional financing and are out of short-term options.

Thinking of Freight Factoring? Some Things to Consider

For those interested in load factoring, here are some basics you need to know.

1. Shop Around

Be it auto insurance or a personal loan or freight factoring, shop around. Get quotes from at least three, if not four factoring companies. That way, you can compare each and choose the one that best fits your financial and business needs.

2. Do Your Research

Check the Better Business Bureau (BBB) to make sure the factoring company is legitimate and has good reviews.

Search other review sites and see what prior customers have said about their service. Also, become familiar with basic factoring terms like the difference between recourse factoring and non-recourse factoring.

Just like with negotiating a car, why not use your research and many quotes as negotiating chips to help you secure a lower factoring fee?

3. Know What You’re Paying For

Does the factoring company offer non-recourse factoring, recourse factoring, or both? Which do you prefer?

A quick look in the Factoring Glossary and you’ll see that recourse factoring is a type of factoring where the third-party company does not pay up if a customer defaults on their invoice.

Non-recourse factoring is the opposite. When customers default on their invoices, the factoring company takes the loss. Meaning, the trucking company won’t absorb that loss of cost.

Usually, non-recourse factoring is riskier for factoring companies. Trucking companies that choose this type of factoring can expect to pay more.

Also, according to the Trucker’s Report, ask factoring companies what expenses your company will pay. Some factoring companies may only charge a factoring fee.

But don’t be surprised if there are other costs tacked on.

The Trucker’s Report also encourages trucking companies to ask about if the factoring company charges per load. A per load basis may be a better choice for trucking companies that don’t want to have all their invoices go through the factoring business.

Other topics to ask the factoring company include:

  • Downpayments
  • Interest rates
  • Credit scores
  • Contracts

The Takeaway

Without other financial options, freight factoring can be a great temporary financial cushion.

If considering this, make sure to do your research, talk with your attorney, and secure several quotes. Have any more factoring tips? Leave a comment below. Any questions? Feel free to contact us today.

How to Start a Trucking Company with No Money and Get Financing Today

how to start a trucking company with no moneyWould you like to start a trucking company? If so, you’ll need a lot of money.

At least, that’s what some people would tell you. Did you know there are actually ways to start your company if you’re short on funds?

Trucking is a major industry in the U.S., so you’re smart if you want to take part in it. As long as you learn the ropes, you’ll be well on your way to making a great income.

So how can you get started if you don’t have funds? Keep reading to learn how to start a trucking company with no money, plus some other important information.

Financing Options

No doubt about it, if you want to start a trucking company, it’s going to require a lot of money, whether provided by you or someone else. While some people have thousands of dollars waiting to be used for this purpose, most of us don’t. Luckily, there are various funding options available.

Here are some options for you to consider. As you read through them, keep in mind your specific situation. One method will work for some but not for others.

Commercial Truck Loans

If you don’t have thousands of dollars sitting around waiting to be used, a loan may be your best financing option. Loans have their own rules, though. When comparing loan options, consider your monthly payment, the down payment, and every other detail (don’t forget to read the fine print).

In general, to qualify for a typical loan and get a good interest rate you’ll need good credit and good work history.

Consider Renting

Purchasing the trucks and other equipment you need can be very pricey. To combat this, consider renting these items.

Using an equipment lender may be just what you need to get up on your feet. Instead of paying a large sum of money, you’ll pay for your equipment bit by bit.

Renting equipment may get you in business more easily than searching for the right financial institution. Banks will generally want to see a couple years of operating history before approving a loan.

Lease to Own

If you don’t want to dump money into a rental, consider a lease to own program. Any money you put toward the truck will ultimately go toward buying it. Once you’ve paid your lease in full, the truck will be yours.

Buy Used

If you have some funds to put toward a truck, consider buying one that’s used. A used truck that has been well cared for is a great option. It will cost a lot less than a new truck.

If You Have No Money

If you don’t have any money to start out with, there are options for you too! Some loans don’t require a down payment and others allow poor credit.

There are companies that specifically finance truck loans. You just need to do a little research. Explore your options to see what works best for your situation.

Ideally, you’d have some money for a down payment, or you’d have good or great credit. That may not be the case, though.

Once you find a good financier, hold onto it! You may need funds for other business operations down the road. These may include vehicle repairs, hiring staff, and general expenses.

Read the fine print and make sure you understand all the details of a loan before you get into it. Some require previous experience operating/working with the type of vehicle you’re looking to finance. Others require years of CDL possession before they offer funds.

Setup Your Business

You’ll need to go through several steps to set up your trucking business. Finding funding is only one of those steps, so let’s look at some of the other things you’ll need to do.

Get a CDL

In order to drive trucks for business, you’ll need to get a Commercial Driver’s License (CDL). A CDL allows you to operate vehicles for commercial purposes.

The requirements for obtaining a CDL may differ depending on the state you live in. But in general, you’ll need to complete a written test and a physical driving test.

Federal regulations require you to test for and hold a Commercial Learner’s Permit (CLP) before you take the tests to get a CDL.

Various things will be considered when you apply for your CDL. You’ll need a driving history, medical certification, funds to cover fees, and the ability to pass written and driving tests.

Do Your Paperwork

A CDL isn’t the only requirement you’ll have to meet before starting your trucking business. You’ll also need to fill our various forms, register your company as a Limited Liability Company (LLC) and register with various institutions.

Secure Business Insurance

Purchasing your vehicle(s) and filling out paperwork is only the beginning. There are plenty of other steps you’ll need or want to take.

One of those steps is securing business insurance.

Your work is on the road, which can be a dangerous and unpredictable place. Make sure you have adequate insurance. This needs to include worker’s comp, cargo coverage, and liability insurance.

Research insurance companies before going with one. Choose one that processes and pays claims quickly

How to Start a Trucking Company with No Money

It costs a lot to set up a trucking company. The good news is, you may not have to pay for it.

If you’re wondering how to start a trucking company with no money, the answer is simple: find the right financing.

While traditional financing will still cost you, certain options allow you to start up without any out of pocket costs. So get researching and find your ideal financing plan today!

Have you thought about what life would be like as a trucker? Check out our article for some valuable insights.

4 Tips to Start a Successful Freight Broker Business

freight brokerAs nearly half a million businesses get started every month, not many of them will be a successful freight broker business. If you want to get involved in the freight industry, becoming a broker is a smart way to make a big impact.

You’ll be part of a growing industry while you also have the flexibility to move into whatever niche that you find most interesting.

Here are four things to remember when it comes to starting your fright business.

1. Flex Your Accounting Muscle

When it comes time to start a business, most business owners will start off thinking about the most exciting aspects of the business. They’ll be coming up with names, buying URLs, and drawing up logos before they start thinking about the boring stuff like their accounting system.

However, in the world of freight brokering, your accounting system is one of the driving forces behind your day to day functions. If you choose a system that has a strong payroll program that’s integrated with your scheduling and invoicing, you’ll be much better off than playing catch up.

If you leave accounting to be one of the last things you think about, you won’t end up setting yourself up to succeed.

Your accounts payable and receivables staff will ensure that your ledger is always balanced and your clients are receiving their freight on time. When you have strong accountability built into your system, your customers will be pleased and you’ll be able to balance your pay sheets easily.

Find a digital solution that offers a cloud-based option so that your staff can work remotely and you can check in when you’re off-site.

2. Have a Sustainability Plan

The first thing you have to ensure when you start getting clients for your freight company is to have prices that make sense for your loads. Every single transaction you make should have some kind of margin that benefits you. When you look at your spreadsheets, it should be clear that there is profit coming in.

However, you won’t be getting cash in your pocket based on each transaction. You’ll have to make a plan for that turnaround time that it takes for your shippers to pay. Carriers will expect to be paid within about two weeks, but it could take months for shippers to send you what you’re owed.

As your company expands, you’ll see yourself consuming more and more capital.

IF you haven’t set up a financing program with your accounts receivable department, you won’t be able to keep everyone happy. Traditional banks will offer you lending options like this but most banks don’t know what to do with a freight broker.

Find a lending institution or a firm that understands the financing that you need and can provide you with some working capital. Otherwise, you’ll have a lot of unhappy clients and customers who you’re having to bug more often than you should.

3. Get Insured

One of the things that you absolutely can’t overlook as a freight broker is your insurance. You’ll need several types of insurance when you’re starting your business, so be sure you’re covered on every base imaginable. And make sure you’re never relying on your personal liability insurance for your business.

First, you need to have property and general liability insurance for your company. This will cover you if your freight gets damaged or if a driver damages something or someone while they’re on your site.

You also want to be covered in case something falls on a staff member’s foot or if someone has a slip and fall in your parking lot or in your office.

You should also have workers’ compensation in case anyone gets hurt on the job.

You should also get vicarious auto liability and umbrella insurance. With all the miles your staff could be traveling, they will need some insurance to cover in case of accidents. On top of that, get some contingent cargo insurance so that anything that you’re transporting is covered and you’re not liable for it.

Find a broker who specializes in commercial work or, better yet, understands the industry.

4. You Need a Niche

While there are lots of companies that are able to broker freight and handle the kind of work that you do, you need to differentiate yourself from the pack. Will you be handling just any freight that comes your way or do you prefer a certain type?

If you’re currently working in another industry, you probably have some insight as to what kind of freight they need.

You can make a successful transition from fine art if you understand what it takes to pack and ship expensive paintings or fragile sculptures. For people who’ve worked in the food and beverage industry, they might understand refrigeration or how to handle liquids properly.

If you want to accept any kind of load, you need to have a lot of different kinds of trucks. If you have a flatbed hauler, you’ll only be able to carry a certain type of product or equipment.

Consider a dry van for products that are a little more sensitive. IF you can get a good price on a refrigerated truck, beware of buying one used. HAve an expert look it over before you hand over the cash so you don’t get left with a busted truck and a load of quickly expiring frozen goods.

Being a Freight Broker Is Exciting and Lucrative

If you’re interested in becoming a freight broker, you’ll find there are a lot of directions to go in the industry. Between moving freight across international lines and working domestically, you’ll get to learn about commercial trade while also participating in it.

If you want to understand more about how a broker gets paid, check out our guide.

A First-Timer’s Look at How to Land Your First Trucking Contract

trucking contractEverything’s finally come to fruition. The open road called– and you answered.

Successfully financing your own commercial truck is no easy feat, but the real work begins now: finding and landing your first trucking contract.

It probably seems incredibly daunting to you now, but with the right resources, it doesn’t have to be so scary. Keep reading to learn everything you need to know about building your trucking business, from finding companies needing freight moved to landing truck driving contracts.

Get Your Authority to Operate

First things first: it’s likely that you’ll need to get operating authority, or an MC number, in addition to your DOT number. Unlike your DOT number, your MC number will dictate the type of business you can conduct with your commercial truck and the type of cargo you’re allowed to carry.

Do You Need Authority?

Not all commercial truck operators need to get operating authority. Make sure you determine your need before you start the process to save time and money if it’s unnecessary.

If you’re a private carrier who transports your own cargo, you don’t need operating authority. If you only haul commodities exempt from federal regulation, commonly known as a “for hire” carrier, you don’t need operating authority.

Finally, if you work solely within a “commercial zone” as designated by the federal government, it’s likely you don’t need operating authority. Interstate authority regulations don’t apply to these zones. One example of a commercial zone is the area along the Southern U.S. border, bordering Mexico.

Types of Authority

There are different types of authorities according to the various intentions of a trucking business and the freight it carries. Here are some of the main types:

  • Carrier of household goods
  • Broker of property (excluding household goods)
  • Broker of household goods
  • International cargo carrier
  • International household good carrier

There are other authority types, too, if none of the above apply to you. Notice how carrying household goods plays big into your authority type. This is largely due to the nature of your clientele.

It’s essential to figure out your authority type early on. This will inform almost everything about your trucking business, from your insurance to your clients to your capability to carry international goods.

Get Started with Load Boards

There are tons of trucking contracts available out there– the key is to get your hands on them. This is where using a great load board comes in.

For beginners without long-term clients, load boards are where you’ll find most (if not all) of your freight. Load boards are essentially freight-matching services that pair you up with clients needing your services.

They can be competitive, though. You’re not the only one showing up every day, ready for the long haul.

Make sure you’re using the best load board service you can find. The good ones will offer you the ability to create a truck posting in addition to searching for freight so clients can find you, too. The best ones will even have a quick payment system integrated for faster payment on your hauls.

Of course, your long-term goal is to build a trucking business on long-term contracts so you don’t have to rely on load boards forever. Load boards are a great way to find them, but they’re not the only way.

Think Long Term

In addition to your load board postings, you should also take matters into your own hands. Cold pitching to clients who need freight carriers seems like a shot in the dark, but can actually be incredibly effective.

Take some time to consider your ideal client’s qualities.

What’s their budget? How frequently do they need your services? How long or short term are their contracts?

Doing some self-reflection about your business this way is key to finding clients that are a great match for you. Once you’ve nailed down the characteristics of your ideal client, find them in the real world and start pitching. Usually, they’ll love the initiative that shows and will want to work with you.

Top Tips for Finding Great Clients

Everyone has a hard time finding their ideal clients, across all industries. You’re not alone.

Check out industry boards for industries you know use trucking services frequently. Many of your potential clients will display these on their site. If you can become a member, you’ve got access to tons of potential clients who are ripe for the pitching.

For instance, supermarkets make up a big bulk of freight clientele, so the National Grocer Association would be a great place to try to find a new contract.

The U.S. government also uses independent contractors like yourself for tons of shipments every day. The U.S.P.S. is always looking for owner-operator freight services, and pre-qualification is pretty simple. The General Services Administration, or the GSA, is usually looking for freight carriers as well.

Besides finding great clients, probably the most important piece of advice for building a trucking business with longevity is to keep great clients. Load boards are awesome tools for freight carriers just starting out, but your ultimate goal should be to build a strong client base with long-term contracts so you don’t have to wonder where your next job is going to come from.

In order to build that clientele, you need to keep your current clients as happy as a clam. Sometimes, you have to eat short-term costs to keep a long-term client.

In every business decision, consider whether or not your decision will support the health of your relationship with that client. That should be your only deciding factor!

Land Your First Trucking Contract Today

Now that you’ve read up on how to land your first trucking contract (and all the ones afterward), hopefully you’ve found your footing in the owner-operator freight carrier field and are ready to get out there and get started!

Still need to find that first contract? We’ve got you covered.

Sign up for our load board service (it’s free!) to post your first carrier listing and get on the road ASAP!