by Ashley Wilks
Fleet factoring is key in growing operations
With the economy nearing an all-time high and the unemployment rate lower than it has been in 50 years, the United States seems to be more stable than ever. According to The New York Times, “Tax cuts and federal spending are adding fuel to the already strong economy, putting the United States on a pace for its best year of growth in well over a decade”. So, with the economy booming, why is the trucking industry struggling, and how can fleet factoring help to ease the pain?
With a gross domestic product growing at a 4.1 percent rate in just the second quarter of the year, consumers are leading the way with spending. The demand for cars, clothing and entertainment is surging, which means the demand for delivery will follow suit. That seems like great news – but with the driver shortage, the trucking industry is stressed and currently unable to meet that demand.
A report from NPR claims “According to an industry analysis by DAT Solutions, just one truck was available for every 12 loads needing to be shipped at the start of 2018, which is the lowest ratio since 2005.”
Unfortunately, it seems there is no relief in sight. The Washington Post recently reporting that driver shortage is growing. They show that the industry has roughly 63,000 open positions this year alone with that number expected to double in the coming years. That is bad news for the industry but could also mean bad news for the U.S. economy through higher prices and delays in shipping. Fleet managers are doing all they can to address the situation but while the need for drivers is at critical mass, the show must go on. Deliveries still need to be made, current drivers need to be paid and operations need expanding to meet the demand as well.
That is why many fleets are relying on factoring for help. With freight demand soaring and too few drivers, they are in need of not bigger fleets, but better fleets. Companies are replacing old inventory with newer and more reliable trucks. Truck sales are at a yearly high and there is no indication they will be slowing.
Peterbilt is forecasting that sales in the industry’s heaviest weight class will be in the range of 235,000 to 265,000 vehicles in the U.S. and Canada this year. That would be the third-best year ever for sales of trucks in the heaviest Class 8 weight segment.
With a booming economy, shipping rates are increasing and that means more money for the industry, but it is not guaranteed to come in at the same time that fleets are requiring it. Companies are turning to fleet factoring for more balance and consistency. Factoring can help to finance new vehicles and infuse immediate cash flow into their financial supply chain. Companies like FleetOne Factoring understand the industry needs in terms of trucking requirements, payroll and vendor payments. They can offer factoring rates sometimes as low as 1%, enabling immediate cash flow without a huge strain on the company financial status. Factoring companies can also customize solutions based on specific needs. However, what it really comes down to is reliability and trust. FleetOne Factoring has the trucking experience along with a strong financial foundation to manage the financials and guarantee cash-flow, so the fleet can focus on the demand of delivery. Factoring has the ability to strengthen the foundation of the company especially at a time when the economy is at is healthiest and the opportunity is vast.
With a reliable and experienced fleet factoring partner, companies get responsive customer service and customize solutions that provide more than just the ability to grow your operations. Along with recourse and non-recourse options for financing, companies are able to leverage their own financial capacity in choosing the best factoring solution. Fleet factoring provides the confidence and peace of mind that you will have what you need, when you need it whether it is payroll, vendor payment, vehicle purchase or operations expansion.
The Advantages of Working with FleetOne Factoring:
- 28 years of experience in trucking finance
- An easy application and set-up process
- Funding within 24 hours
- Competitive rates with no hidden fees
- Outstanding back office support, including credit analysis and your own dedicated representative
- No limits on the amount of funding we can provide
FleetOne Factoring can help in the day-to-day management for drivers as well. With same day funding, fuel discounts and easy online invoice upload through the mobile apps like FleetDocs, drivers will find the same confidence and peace of mind. The easier and more robust fleet operations are for the driver means higher rates of recruitment and retention. Factoring helps build your reputation and your fleet, helping you grow along with the booming economy.