The Transportation Industry’s Cash Flow Gridlock

The transportation industry serves every single business in the United States. From the food we buy at the grocery store to consumer electronics, raw construction materials, and everything in between, our economy thrives due to efficient supply chains and logistics. Yet even in the current economic climate, the transportation industry is facing growth challenges to meet rising demands from every industry.

Favorable Economic Conditions

The reports about our strong economy have not been exaggerated. Manufacturers are producing more goods. Consumers have extra capital and are purchasing more. The demand for capacity trucks has increased, giving transportation companies the leverage they need when entering into contracts. Even load matching apps are being used by larger clients, providing even more revenue options for independent owner-operators. Everything is lining up to favor the transportation industry, so why is it so challenging to meet the increased demand for goods to be shipped?

Tight Cash Flow

Currently, the transportation industry is running with restricted cash flow conditions. Sales have increased, customer demand is on the rise, but most of the revenue is locked in unpaid invoices. With more drivers and equipment needed to take the place of retiring truckers, and the need for increased recruitment campaigns to grow and meet the rising demand, the transportation needs immediate access to capital. Just because the economy is strong doesn’t mean transportation companies want to take on debt through loans. Debt-based financing creates liabilities and hinders growth plans. Certainly there must be a better way to get capital.

Transportation Factoring

Instead of relying on debt-based loans for capital, transportation companies are unlocking the revenue tied up in unpaid invoices and bills of lading. By using transportation factoring, trucking companies can get fast access to revenue instead of waiting a month or longer for customers to make payments. The improved cash flow provided by transportation factoring gives businesses the industry the ability to quickly accumulate capital for new vehicles and equipment, hiring additional drivers, taking on larger client accounts, and even taking on business in new territories. With the current economic trends, there is no reason for trucking companies to be locked in a holding pattern due to cash flow strains – nor should they feel forced to use debt-based financing.

New Century Financial offers comprehensive transportation factoring. As a national leader in accounts receivable financing solutions, our team works with trucking companies throughout the United States to ensure supply chains have the capital necessary to operate smoothly and grow in today’s economy.