Since the advent of big rigs, truck drivers have been romanticized in country music, movies, and on television. Today's "knights of the highway" are sometimes compared to the cowboys of the 19th Century. For all the romance and mystique, trucking is still a business. As with any business, a transportation company has to take advantage of every available resource.
Trucking companies can increase cash flow and reduce overhead through freight factoring. A simplified explanation of freight factoring is that the hauling company sells their customer's outstanding debt to a freight factoring company. The factoring company makes its money by paying the motor carrier a percentage of the value of the debt a portion of which is paid up front.
While it may sound like the trucking firm is losing money, factoring freight actually reduces the hauler's overhead. The factor assumes the expense of collecting the purchased debt. A factoring company for truckers can offer cards for discounted fuel.
Global Positioning Systems (GPS)
GPS devices can be mounted in the truck or utilized via smartphones or tablets carried by the driver. The primary benefit of GPS is improved logistics, which in turn improves reliability.
Having the ability to track your fleet in real time benefits a company in multiple ways. Accidents and the theft of a truck can be reported immediately. A primary advantage of GPS is that it can improve customer relations. Clients can be kept accurately appraised of the location and ETA of their delivery, giving the hauler a reputation for being responsive to customer needs.
Dispatchers can monitor traffic and calculate the most efficient route and relay route changes and traffic conditions to the driver in real time, improving delivery times. GPS creates more efficient scheduling procedures and increases employee efficiency. If a customer calls for a pick-up, the dispatcher can locate the nearest available truck.
Excessive fuel consumption and increased company liability, because of excessive speed, can be brought under control using GPS. If a driver is behaving recklessly, the issue can be addressed immediately. In short, global positioning is the equivalent of having a supervisor in the cab with the driver.
Earlier we talked about freight factoring as a way for motor carriers to eliminate the expense and hassle of getting paid. Now we are going to focus on collecting overdue payments. Collecting from delinquent accounts increases company overhead by forcing a firm to either absorb a loss, hire people specifically for the purpose of collecting on delinquent bills, or place extra demands on their staff possibly causing them to neglect their regular duties.
In the long run, contracting with a licensed and reputable collection agency can save money. A collection agency has resources at their disposal their client's do not including experience and software that is unique to the debt collection industry.
Even though the agency is working on the hauler's behalf, the process insulates the trucking company so they are less likely to lose future business from the client whose bill is overdue. Collection companies can adversely affect the defaulting company's credit rating by reporting the default to the major credit bureaus.
Electronic Logging Devices
An Electronic Logging Device (ELD) eliminates log books. ELDs are either hardwired into the truck's electrical system or are portable units that plug into the tractor's diagnostic port.
The Electronic Logging Device records miles traveled and engine run time, providing a means to monitor driver behavior. ELDs eliminate unauthorized use of a rig and ensures that drivers are hours of service (HOS) compliant. This reduces loss and liability by guaranteeing that drivers receive proper rest. Federal Motor Carrier Safety Administration regulation 49 CFR 395.15 requires all trucks in the US be ELD equipped by December 16, 2019.
More expensive ELDs have built-in GPS. Other available advantageous features include engine diagnostics and fuel consumption and tire pressure monitoring.
By selling outstanding bills, freight factoring increases a trucking company's revenue stream. Global positioning systems save money and promote customer relations by improving logistics and efficiency. Collection agencies are a better way to collect on delinquent accounts. Electronic logging devices eliminate paper logs and track driver activity.