2016 has challenged truckers in many ways: a spike in stock, a declined demand for freight, a driver shortage, speed limit changes, you name it. Luckily, 2017 shows a silver lining for the trucking industry. Overall, an increase in consumer spending is predicted upon the new year. Outlooks for 2017 expect conditions to improve for the trucking industry, including a spike in consumer spending and manufacturing. With more people buying, stock will decrease, bridging the gap between supply and demand.
Additionally, many retailers are taking advantage of the fast-paced nature of e-commerce that has increased in popularity. The need to buy and get it now will allow more opportunities for truckers to deliver freight. While the shipping volume is reportedly down as of May, report suggest that the second half of the year should bring truckers out of their slump.
The new chief for the American Trucking Association, Chris Spear, is working to prevent over-regulation in the industry. Concerned about tax reform, trade reforms, and fund, Spear suggests that any new regulations should be imposed by people in the field rather than those who do not know the inner workings of the trucking business. With more consideration from the people within the field, the industry will see a much more successful year.
Trucker safety has become a prevalent issue in the past years. Sleep apnea, an issue from which many truckers suffer, is often due to the fact that truck drivers are not given proper resting periods. To combat this issue, Congress is setting forth a new initiative to give truckers ample recovery time between shifts. The new bill mandates that every recovery period include two nights with no driving between 1 am and 5 am. These recovery periods are granted once a week. By passing this regulation, truckers are limited to 70 hours per week as opposed to the sometimes 82 hours a week.
Some are concerned that the time prohibition will cause more trucks to drive during rush hour, which will increase risks of potential accidents. But, Congress is adamant that the time gap is necessary in allowing truckers to sleep adequately. The regulation will also allow a sense of uniformity throughout the industry, and protect truck drivers as a whole.
Vaping has hit the world by storm since it was introduced. While the rising popularity is somewhat harmless amongst teens and the general population, it may pose dangerous consequences for truck drivers. Crashes and explosions are the main concern for truck drivers who vape. FMCSA warns truck drivers to be aware of any smoking regulations while in the cabin. They also say to watch the battery charging while you are away from your truck.
Factoring is a common practice in the trucking industry as a way to keep their finances in order and to collect debts quickly. In the trucking industry, bills and debts from so many companies can get complicated, and trucking companies are sometimes forced to wait a long time to collect the money they are owed. Factoring is advantageous for any trucking company manager who is tired of waiting for a long period of time before collecting each debt and needs the money on a shorter time scale.
In financial factoring, a business sells its accounts receivable, or invoices, to a third party factor. The business sells the accounts receivable at a reduced price in exchange for immediate funds. Some businesses have a varying cash flow– meaning that they have a large cash flow during some periods and a very small cash flow during others. Therefore, some businesses find it necessary to have their debts paid immediately in order to continue their business in a timely manner, rather than waiting for money to come in before making the next business transaction.
How is factoring different from a loan?
There are three big differences between a bank loan and factoring.
Loans depend on a company’s credit score; factoring depends on the value of the company’s receivables.
A loan involves borrowing money; factoring is a purchase of a receivable.
Bank loans involve two parties; factoring involves three.
How does truck factoring work?
Truck companies sell large quantities of products and services to other businesses each day. The price of these transactions is large, but often, the trucking company cannot collect the debt from the other business for a month or more. Therefore, the trucking company uses a third party, the factoring company, to help them receive money immediately. The factoring company essentially buys the debt owed to the trucking company. They give the trucking company the amount of cash they are owed by other companies, keeping a small percentage. Then, the factoring company collects the debts from the other companies.
Why is truck factoring a good option?
Truck factoring is a good option for any truck company who cannot afford to have money owed to them for extended periods of time. The factoring company gives the trucking company the money they need immediately, then collects the debt later.
You do not need to be in business for long in order to pick up some bad debt. No matter how well you think you screen your customers, it is inevitable to find companies that even though you delivered an acceptable product or service to them, they either can not or will not pay your invoice to them.
It was a combination of these problems that a Nevada USA Temporary Employment Agency found itself in. They had a few accounts that had been hit by the recession and filed for bankruptcy protection and a couple others that just decided that they were not going to pay. All invoices were supported by the proper sign offs so the customers had no grounds for non-performance or non-delivery of services but the Placement Agency was still sitting there with bad paper.
It was after this happened 3 times that the owner of the Placement Agency decided to look into options to stop this problem from really getting out of hand. They had already depleted their cash reserves and they could not withstand another customer not paying their Invoices or they would be looking into bankruptcy protection themselves.
The part of the solution to the problem was for the company to look at Insuring its Receivables. But what about the Cash Flow problem?
The owner of the Employment Agency decided to look for options using a Commercial Finance Broker because they had the best options available on the market plus it would not cost him anything for the service because the Business Finance Broker is paid by the lender.
The Broker was able to liquidate their current bad debt, put them into a Commercial Factoring program which was insured so that they now had a Non-Recourse Invoice Factoring and the advance they took on their Accounts Receivable would never come back against them.
When you begin a transportation company, a sturdy cash flow is just as critical to your business success as your faithful semi truck. As you may be familiar with, freight factoring can be a perfect financing option for a trucking business. Unlike the long process of securing bank loans after deep dives into your credit record, a factoring company can find you started right away, giving you quick cash when you need it.
Actually, savvy truckers often advocate that new truckers secure a factoring company right away. That way, you’re all set up and prepared when you require it.
How to begin a Hot Shot Trucking Business
If you’re gravely thinking of starting a trucking company, before you buy your rig believe through what type of hauling as well as deliveries you want to make. Another thought will be whether or not you plan to make your own customer base as an owner worker. This takes time, and time is cash when it comes to hauling loads, particularly when you have truck payments to create. If you previously have connections to get you started, though, you can make your hot shot trucking business into a self-governing and profitable venture.
The faster route to getting your business going is to rent your services or sign on with a trucking business looking for hot shot truckers. This choice not only takes the pressure off for discovery loads to haul, but it also removes the liability of paperwork and billing from your shoulders. Naturally the trucking business finds the loads to haul for a cost. Usually this arrangement puts about 70% of the freight charge into the pouch of the trucker, and the other 30% goes to the trucking corporation.
Purchasing Your Truck
If you don’t previously own a rig and your desire to start a hot shot trucking business, it is most excellent to buy a used truck to get started. Buying used over fresh will save you thousands in initial costs. Sites offer a great inventory of in the past owned hot shot trucks. However, a word of concern must be extended with buying a second-hand truck. Take the time to investigate manufacturers and models. Learn what’s reliable and look for a truck that can be elastic in regards to what type of load it can bring.
The most ordinary features for trucks used in hot shot trucking comprise of tandem axle, dual tire and 24,000 lb gross weight ranking.
Getting Financial Support
The transport industry has a low barrier to entrance at the bottom of the market, meaning that anybody with a bakkie or a minibus can begin offering transport services. This results in a flood of opposition at the bottom end of the market.
In a lot of instances, the entrepreneur starts a business with small to no capital, relying instead on income derived from the business to cover every overhead from day one. This lack of funds curtails marketing actions that may result in increased income.
Where To Locate A Mentor To Assist In Launching A Transport As Well As Logistics Business
The Transport as well as Logistic industry is extremely competitive and because this over-supplied marketplace, mentorship will be extremely useful when opening a new business.
As a beginner, you will have to surpass your competitors and research the market cautiously to find a gap that will aid to successfully establish the business.
Many mentors have exact knowledge of specific types of businesses for example a transport or logistic business, a restaurant, bakery, hotel, butchery, garage, supermarket, or businesses in security, manufacturing, trading, or services. Don’t worry too much about it, as time will definitely tell you exactly what you have to do to succeed in this business with everything that you can learn.