We’ve hit T-125 days and counting down before Christmas arrives. It’s now the peak time for trucking companies to have an abundance of work. Drivers need to make sure merchandise arrives at stores on time. Fall harvests are soon to follow. Seasonal items like winter tires, Thanksgiving turkeys, Christmas hams and beef roasts, and New Year’s décor all need to be hauled from one area to another.
When it ends, work can also dry up. That impacts monthly revenue and can make it hard to pay your bills. How do you manage seasonal fluctuations as a trucking company owner? Freight factoring is the perfect solution.
Freight Factoring Helps You Find More Work
Manage seasonal fluctuations by taking on more work. A load-finding app can help you search your area or areas your drivers pass through to look for loads in need of drivers. If there’s one that fits your needs, you can apply to transport it. You may never have worked with this company before, but you can run a business credit check to look up their payment history and see if they have a history of paying on time.
When you are looking for work, try to avoid having an empty trailer during the trip. If you’re heading from Chicago to Dallas with half of your trailer full, look for another half load that’s heading to Dallas. If there’s nothing in Chicago, find cities along the route you take. If you can’t find anything going to Dallas, see if there are any loads in need of drivers with an endpoint along the way.
You might find a half load that needs to go from St. Louis to Dallas. That will help. You make more money with two jobs at the same time, and you avoid having wasted space on your trailer. Do the same thing on the return trip. Look for loads going from Dallas up to Chicago or as close as you can get.
Stay Ahead With the Use of Technology
Technology can help you deliver loads on time and keep track of where your drivers are. If you notice a storm has temporarily closed a stretch of interstate miles from where your driver is now, you can reroute your driver now. By being reliable and delivering loads on time, you can gain word-of-mouth recommendations that help keep your drivers busy.
GPS does a lot to help, but it’s not flawless technology. Make sure your drivers know that GPS isn’t always perfect. They need to read and follow signs, too. Smugglers Notch is a shortcut across the mountains in Vermont, and it has a notorious reputation for getting truck drivers stuck in hairpin turns. Drivers see the signs saying not to take that route, GPS directs them that way, and they believe the GPS over the signs. Many drivers get stuck, leading to costly fines and towing/removal services.
Common sense does need to prevail, even if you have the latest technology. Avoid fines by making it clear to your drivers that they need to watch the signs and reroute before they run into issues.
Rely on a Low-Interest Business Line of Credit When Needed
You may not want to have to take out a business loan right now, but it’s better than missing payments and taking a hit to your credit rating. A business line of credit is there if you need it, but you don’t have to use all of it. Use only what you need and pay it back when seasonal trucking work increases again.
With a business line of credit, the amount you have is attached to a card that you use to charge purchases. It goes against the line of credit. You make minimum payments, and some banks may require you to clear the balance at the end of the year by paying everything you owe. This is a good choice if you need flexibility when it comes to covering gaps in your company’s cash flow.
When you use it to cover seasonal fluctuations in your trucking business, you can pay bills on time. As business increases, pay off everything you used from the business line of credit. Responsible use of your business line of credit improves your business credit score, which helps you find more clients and qualify for lower interest rates in the future.
Get Paid Instantly to Ensure Money Continually Comes In
In the past, it was normal to deliver a load, print out and mail or fax an invoice, and wait for the check to arrive. As many companies pay invoices at the end of the month, it could take weeks to get paid. Plus, you’d have to wait for the check to clear the bank. In those weeks, you were having to keep up with bills, employee wages, insurance, and permits/licenses.
Freight factoring helps resolve this problem. Instead of waiting weeks to get paid, the freight factoring company advances the money you’re owed minus a minimal fee. You’ll have money the same day or within a couple of days, depending on your preferred payment method. If you have a gas card and submit your bill of lading before the daily deadline, same-day payments are possible. Otherwise, it can take a couple of days for the payment to reach your bank. Still, a couple of days is a major improvement over several weeks.
Don’t You Lose Money?
A lot of people worry that freight factoring will take too much money from them. There is a fee for freight factoring, but it’s not going to be higher than credit card interest rates or late fees if you have to pay your bank, utility company, or other creditor late. It’s far more advantageous to pay a freight factoring fee of typically less than 5%.
If you’re worried about that 1%, 2%, etc. being held as a freight factoring fee, you can always increase your rates slightly to cover the difference. You should always set your rates to be competitive in your area but also to make sure you’re earning the amount you need to stay in business.
Ensure you have revenue all year by partnering with Saint John Capital. With our load-finding app, there are thousands of jobs at your fingertips. Take as much work as you need to get through the seasonal fluctuations. Who knows, you might find another dream client when you take on additional work in the slower months. Our free business credit checks help you choose clients who have a solid history of paying on time.
It takes minutes to create an account with Saint John Capital. Give us a call if you’d like to learn more before you get started. Our freight factoring experts speak multiple languages, so don’t let language barriers keep you from working with us to get same-day payments, qualify for business lines of credit products, and find more work.