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!

Eliminate The Time Spent Collecting Payments

We talk to hundreds of carriers every week and one thing that typically comes up in the conversations we have is how to ensure rapid payments for freight moves. In other cases carriers who do work with brokers who offer quick pay have trouble depending on the advertised timeline for payments to be processed or sent and almost every broker has slightly different processes for accepting documents or invoices to remit payments.

Most carriers spend hours per day just dealing with handling their incoming payments, working with brokers or shippers to get the right docs over and creating invoices.

In order to solve the payment woes of carriers, we developed an entirely new tool within ComFreight last year called Haul Pay. Haul Pay enables carriers to standardize and streamline their accounts receivable and payments. Carriers can get approved the same day in many cases for the program and no credit check is required.

Haul Pay works by enabling carriers to sell their invoice at the time of pick up or delivery. We’re then able to advance money and process the transaction request the same day. The freight payment then arrives in the carrier’s bank account the next day.

Digital Factoring

Instead of spending time chasing down or checking on payments from shippers or brokers carriers can rest easy knowing that they’ve been paid. Because Haul Pay is a totally new form of freight factoring we’re able to do this with no recourse. 100% free of risk to the carrier client.

No need to worry about having to repay a factoring company if the payment is not recovered by us. It’s on us at that point.

The Haul Pay feature in the ComFreight app also enables you to track your payment status, history and check credit instantly for new customers.

This means carriers can focus 100% on hauling loads, growing their fleets and expanding their business operations.

Accounts receivables and collections become a thing of the past, overnight, with Haul Pay. Learn more today here or give our team a call at 888-633-5558.

We’ve served tons of carriers already with more happy ones being made every day. Eliminate the stress of payments, standardize all of your payments and eliminate the time you take creating invoices and dealing with collections once and for all!

Copyright © 2018 – ComFreight.com™

Tips for Acquiring First-Time Commercial Truck Financing

commercial truck financing

When deciding to purchase a commercial truck, financing it may be your best option. New trucks can cost $80,000-$150,000 each, which may be out of the reach of most operators.

If you have made the decision to purchase your own tractor and trailer, congratulations. Being an owner/operator in the trucking industry comes with a lot of rewards you cannot get working for a major carrier.

Be aware though, commercial truck financing is expensive.

A decent used tractor will start at about $60,000 and go up from there. New tractors are more expensive than a house, so before you quit your job make sure your finances are in order.

Can you afford the down payment? Can you afford the monthly payments?

Let’s find out.

Credit Habits

Before seeking financial arrangements, some basic loan guidance will be helpful.

Individual credit habits will affect loan applicants differently. Persons with decent credit, say a credit score of 660 or greater, usually are able to find financing. On average, a 15% down payment usually translates to an 80% loan success for those with decent credit, although sometimes lower down payments can be found.

For those with poor or no credit, some alternative options may be found here. These options may also benefit those with a new business, low cash reserves or those wishing to purchase older vehicles.

Some of these circumstances have been known to make financing more cumbersome.

Vehicle Age

Vehicle age should also be evaluated prior to financing. Vehicles 10 years old and newer have little trouble finding financing.

Trucks 10-15 years old are slightly more difficult to finance but usually do find financial backing. However, trucks older than 15 years are more prone to breakdowns and are harder to resell so financing them can be difficult.
Vehicle types can also affect financing options.

Vocational trucks, like dump trucks, are more easy to finance than semi trucks. Some institutions will refuse to finance semi trucks while others specialize in these types of loans.

Type of Operators

Fleet operators are also preferred over single truck operators when seeking financing. If a single truck owner has any vehicle downtime, he is unable to earn until his truck is repaired. A fleet owner, however, can still generate income with his remaining trucks, if one is down for repair.

Financial institutions have been known to use this as a determining factor when considering loans.

Bankruptcy

Past due child support, current bankruptcy or recent vehicle repossession can all be red flags preventing you from securing financing. Discharged bankruptcy generally is not an obstacle to finding adequate financing.

So when you’re ready to leap into the trucking business National Truck 8 Equipment Sales has you covered. Whether truck sales, parts, service or repair we have something for you.

How to Purchase Your First Truck

You should have good credit and a good work history.

When you go into the process with a less than average credit rating and a spotty or short work history, you can get hurt on the interest rates and the size of the down payment.

When you finance a vehicle, at the end of the loan term you own it outright. You are responsible for all taxes, insurance, and maintenance.

Financing a vehicle will improve your credit rating as the years go by, as long as you make payments on time.

Different Types of Commercial Truck Loans

There are a lot of different truck loan types. The type of truck and its age are considerations. There are companies who make loans on commercial vehicles to people with poor credit.

There are companies that make loans on vocational (dump trucks, cement trucks) only, while some companies finance both vocational and OTR. Do your homework and find the interest rates and financing structures that work best for you.

The most important aspects of financing a commercial truck:

1. How much will the down payment be? You should be able to get a clear and concise answer to this question. If your credit is good or the machinery is newer, you may not have to make a down payment at all.

2. How much will my monthly payments be? Again, this should be an easy answer for the salesperson. You have to find payments that work within your budget or you will run into trouble.

You Can Also Lease a Truck

Depending on your financial/credit scenario, you can lease a truck. You can lease a tractor from an independent leasing company, or lease with an option to buy from a carrier.

Leasing can be far less expensive than financing depending on factors like the age of the equipment and your work history. Generally, you don’t have to make a down payment and the monthly payments are less expensive than financing.

This is a good alternative for people with bad credit. At the end of the lease term, you might have to pay a sizable amount of money if you decide to purchase the truck.

Things to Know When Leasing

You need to know who is responsible for repairs and maintenance. In the event of an accident or emergency, who is responsible? Who pays taxes, insurance, and fees?

Assess a lease contract as carefully as you would a loan contract.

Section 179

Are you looking to add a new or used truck to your fleet, or are simply considering the purchase of your first truck?

There is not much time left in 2018 to make a purchasing decision that could potentially benefit you and your company well in the form of tax write-offs.

Section 179 is a tax write-off for any new or used medium or heavy duty truck purchased in the 2017 calendar year.

If you’re trying to decide whether or not you want to purchase or lease, this may very well affect your decision as this tax measure allows business owners to write off $500,000.

Obviously, with the potential to write off half a million dollars, this can have a very big impact on your overall equipment costs.

Reliable Commercial Truck Financing

Buying a truck comes with a lot of financial responsibilities.

Make sure you are capable of taking them on. Don’t be so rushed that you walk into a financing structure that will crater your finances.

When you are ready to find out more about commercial truck management, please contact us.

7 Tips for Starting Your Own Trucking Business

trucking business

Every year, trucks in the United States move 10.5 billion tons of freight, which is 78 percent of all freight tonnage in the country. This effort requires over 3.6 million trucks and 3.5 million truck drivers.

Clearly, without the trucking industry, America would crumble to its knees. With the supply line from manufacturers to wholesalers, retailers and end consumers cut, millions of Americans will be unable to access various products.

Do you want to play a part of this industry and help to keep American moving? Well, you can do so by becoming a truck driver or starting a trucking business.

But we’re not interested in truck drivers today. In this article, we’re telling you how to build a trucking company from the ground up.

Understand the Market

About 30 percent of new businesses fail within the first two years of operation, and the number 1 reason, according to Investopedia, is founders fail to investigate the market.

To start a successful trucking business, you must gain an intricate understanding of the trucking industry. Does your location have a great demand for trucking services?

What trucking problems or gaps is the market facing? What does the trucking future look like? How will disruptors, such as self-driving trucks, shape business?

If you already have some experience as a truck driver, or you’ve previously worked in an established trucking company, you certainly already have a fairly good grasp of the industry.

Build on that by doing more market research. Read up the latest industry magazines and journals, and talk to experienced truckers and freighters, shipping brokers and other industry players you can get ahold of.

Identify a Business Model

Trucks and truck drivers are the lifeblood of any trucking business. As such, the next step is to establish how you will acquire these assets.

You can purchase your own trucks and hire drivers, or you can subcontract the service to drivers who have their own trucks

Either model has its own strengths and weaknesses. Buying your own trucks, for instance, is cost prohibitive. Entrepreneurs who pursue this model typically start out with one or two trucks, and then scale over time. On the upside, you’ll have greater control over your business, and the model has a higher profit return.

The subcontracted driver model doesn’t require as much capital to start and you won’t go through the hassle of hiring competent truck drivers, but you have to put a lot of effort into building a recognized brand that can pull in shipping clients.

This model is ideal for people who have vast connections in the trucking industry (can easily get clients) but lack the capital to invest in their own trucks.

Register Your New Trucking Business

Although registration requirements for trucking businesses vary from state to state, you generally need to:

  • Choose and register your business name and physical address
  • Pick a business structure (Sole proprietorship, partnership, limited liability company or corporation). Find a business lawyer to help you make a smart choice
  • Get federal and state tax IDs
  • Apply for business licenses and trucking permits. These include the Federal DOT Number and Motor Career Authority Number, Heavy Use Tax Form, International Fuel Tax Agreement Decal, Internal Registration Plan Tag, and BOC-3 Filing.

Set Up Your Business Office/Premises for Success

Regardless of the model you choose for your trucking business, you’ll want to set up a proper office. This is not a kind of business you can run from your garage at home.

In the early days, you don’t need a large team to keep the wheels turning. A front office manager, bookkeeper or accountant, and one or two sales personnel will suffice.

Also, set up a reliable business phone, get an internet service provider and secure any other service that is crucial for your daily operations.

Purchase Business Insurance

Truck accidents are a constant worry for trucking business owners. In 2015, 4,050 trucks were involved in fatal crashes, and 87,000 were involved in injury crashes.

A single truck crash can have devasting effects on your company. You could lose to the truck driver to death or a long-term physical injury, the truck, as well as the freight. Cumulatively, the loss can render your business bankrupt.

This is why it’s very important to buy adequate insurance for your fleet. You also need general liability insurance, workers compensation insurance, cargo insurance, and even cyber liability insurance. In the event of an accident or any other event that results in loss, your insurance provider will step in and provide compensation.

Do your homework well to find a reliable insurance company. You don’t want to get on board with an insurer who will take ages to process and pay out your claims.

Make Use of Trucking Technologies

Self-driving trucks are here, but that’s not the only technology you should be thinking about.

To find clients and ensure your trucks are always on the move, use load boards. These are web and mobile platforms that connect shippers, freight brokers, and forwarders to trucking companies.

The shipper posts a load, trucking companies bid for it, then the shipper selects the winning bid.

While load board makes finding clients easier, you’re advised to keep using other methods to find clients.

For instance, you can reach out to manufacturers in your region and propose to be their shipping partner.

Stay on Top of Industry Trends

The trucking industry has a well-worn reputation for being slow-moving and resistant to change, but that is slowly changing! From new technologies to safety regulations, trucking companies have no choice but to embrace them.

As a trucking company owner, you have to stay on top of these changes and adapt to them accordingly. If a new safety law is enacted, you’ve to comply or risk facing hefty fines.

Get Your Trucking Business Moving

Starting a trucking company is a smart choice. With the manufacturing industry grinding on to meet increasing consumer needs and the e-commerce industry exploding, the demand for trucking services to move goods will keep surging.

With the tips fleshed out in this article, you’re now in a better position to start a trucking business that can grow into a dominant player.

And when the time to find your first client comes, count on us to hook you up.

Your Guide to Commercial Truck Financing

commercial truck financingAre you getting into the commercial trucking industry? Then you’ll want to learn your options for commercial truck financing.

Commercial trucks are incredibly expensive. When you’re just getting started, there’s probably no way you have the cash to buy the trucks you need outright. Luckily, there are plenty of financing options that will help you get your business underway without breaking the bank.

In this guide to commercial truck financing, we’ll walk you through the whole process.

Keep reading before you get started!

Why Do You Need Commercial Truck Financing?

If you’re a truck driver or work in the trucking industry, you might decide to walk away from your regular paycheck for the exciting promise of being a business owner. Becoming an owner-operator can be incredibly rewarding, with a high-income potential. But as a business owner, you’ll also have new risks and responsibilities to manage.

Getting financing for your truck or trucks is just one of those responsibilities, but it’s a big one. Without the vehicle, you can’t get your business started at all.

There are a few steps you need to take to help ensure that you’ll qualify for commercial truck financing at the lowest rate possible. The good news is that this kind of financing is easy to get compared to a lot of other kinds of business loans. The truck works as a form of collateral, so institutions are more likely to take the risk of financing you, knowing they can easily get their money back by selling the truck.

However, if you’re only buying one truck, lenders can be a bit more reluctant to give you the funding. That’s because your entire business becomes reliant on that single vehicle. And, if you’re just starting out, you won’t have a track record to prove your business can make money.

That’s why it’s so important to follow all the necessary steps so you’ll qualify for commercial truck financing, no matter what your business situation is. With these tips, you’ll be well on your way to financing your commercial venture in no time.

1. Show Proof of Business

First, you’ll need to prove that you own a registered business that the lender can finance.

There are a few different ways to show this proof, depending on the kind of business you have.

Corporations and LLCs

This is the easiest type of business to show proof for. The lender can simply look up the official records of your business on the internet – you’ll be listed on the Secretary of State site for your state. The good news is that it’s also very easy for you to set up this type of business.

Sole Proprietorships and Partnerships – Existing

If you haven’t yet organized your business as a legal entity, you’re a sole proprietorship or a partnership by default. If you’ve shown business income on your taxes for at least a year, you can use your Schedule C form as your proof of business.

If it’s a partnership, you’ll use the Schedule K-1 form instead.

Sole Proprietorships and Partnerships – New

If you don’t have a year’s worth of taxes to show, you can use your Employer Identification Number to show proof of business instead. You can sometimes also use your Doing Business As name.

To get your Employer Identification Number, just visit the IRS’s website – it’s free. The confirmation letter they send will serve as your proof of business.

What Else Will You Need?

In the trucking industry, you won’t just need proof of business – you’ll also need your Commercial Driver’s License (CDL). You might also need to get a U.S. Department of Transportation number.

Even if your lender doesn’t ask you to document these things, you should still have them – otherwise, you risk getting in trouble and losing your business.

2. Grow Your Credit Score

Next, you need to get your personal credit score in order so you’ll qualify for commercial truck financing. This can have a huge impact on whether or not you qualify, especially if you’re just getting started.

You’ll need your credit score to be approved for your fuel card and fleet card, too, which are important tools for your business cash flow.

The higher your credit score, the lower your down payment will tend to be. If your credit score is low, getting a co-signer for your application can help.

3. Find Your Truck

With that in order, it’s time to find the right truck to lease.

You probably won’t be able to afford to finance a new truck, so you’ll need to look for a good used option. Find a truck that’s under 10 years old, and has under 700,000 miles. The better the condition, the better your financing options will be.

Most lenders won’t want to finance old, worn-out trucks at all. That’s because they’re more likely to break down, and don’t offer as much collateral value.

4. Save Up Your Down Payment

If you’re just getting into the business, you’ll need a down payment for the truck. You should also have some cash reserve saved up for business expenses along the way.

Depending on your credit score, you can expect to pay a down payment of about 10 to 30 percent. Save up enough cash to cover a month or two of repairs, living expenses, insurance premiums, and the like. Lenders like to see that you’ll be able to keep things going if business starts out slow.

5. Get Insured

Proper insurance is essential for commercial truck financing. Even if you get pre-approved without insurance, you’ll need to show proof of insurance after the financing goes through.

Looking for Commercial Truck Financing?

Once you’ve completed all these steps, the only thing left is to find the right commercial truck financing company for your needs.

When you become an owner-operator, you can be your own boss and grow your business to your heart’s content. Good financing sets you up for success by getting you off to the right start. If you follow these steps, you’ll have everything in working order before you approach a lender.

Want to know how to make your trucking business stand out from the crowd? ComFreight can help – find out more about us here.