Poor cash flow is the precursor to bankruptcy. In 2019, declining freight rates led to bankruptcy filings and shuttering of 640 trucking companies, reported Scott Simanek of FreightWaves. Since the onset of the pandemic, bankruptcy has seemed like a far-fetched risk.
Rates have been higher through 2021, but rising fuel costs and market headwinds are pushing rates down. Some have expressed worry over what the rest of 2022 will bring. The brokers that source capacity for shippers face a very clear threat, regardless of demand trends.
If the rates fluctuate upward and extended payment windows remain, there’s a risk of burning through cash faster than it’s replaced. However, digital freight finance for brokers is poised to save the day, and it’s important to understand what it is, what it is not, and what it means for the future of freight management in 2022 and beyond.
What Is Digital Freight Finance?
Digital freight finance can be a complete solution that allows brokers to establish or repair their credit following strained cash flows. It also helps create more fidelity in the payment process. This is an in-demand need for a post-COVID world of soaring rates soared while brokers still had to pay carriers. Furthermore, digital freight finance goes a step further by allowing brokers to leverage factoring options and additional software to support changing finances and workflows.
Solutions for freight finance can help you accelerate your own cash flow through forms of invoice factoring and often help you streamline the payment process to your contracted carriers. In recent years solutions have been moving digital, leading to even more transparency for all parties on the transaction and more options to pay and get paid at different speeds.
Keep your carriers happy and their cashflows rapid, and they’ll be more likely to be there when you need them most. With rising fuel and headwinds for carriers in more aggressive markets, you can also leverage the right freight finance partner to accelerate payments keeping carriers in business longer. A clear, easy automated payment process for carriers also means less time juggling carrier payment issues and invoicing requests. The best solutions take this busy work off your team and roll this up as an included part of the product or service.
However, digital freight finance is not an end-all solution. It’s not a magic key that can force shippers to pay. It is, however, the key to getting payment for services rendered and holding shippers accountable, not your brokerage’s value, when shippers do not pay on time.
Finding a flexible solution that fits your needs as you grow or encounter challenges can mean the difference between just surviving or continuing to grow even in choppy markets.
See a quick demo of HaulPay’s funding request process from the recent FreightWaves Future of Supply Chain Conference in May 22 by Steve Kochan, Founder & CEO of ComFreight.
What Are the Benefits of Digital Freight Finance for Brokers?
A digital freight finance solution for brokers helps streamline many typical processes that eat away at cash flow. The top benefits of using such a service include:
- Option for payment on invoices within one day of making a funding request.
- Ability to process payments to partnering carriers faster and digital management of payments and invoices.
- Automated software to track payment status and expected deposits, as well as integration into your TMS.
- Non-recourse solutions mean that shippers are responsible for failure to pay, not your brokerage.
- Clear, concise. and competitive fee structures are built to help you succeed.
- The best options also reduce the possibility of fraud with carrier account vetting.
- Access to more carriers with credit-building opportunities through established partnerships and a growing trusted payment network.
What Are Today’s Brokers Saying About Freight Finance?
There’s a saying that the proof is in the pudding, and that’s certainly true of ComFreight’s HaulPay digital freight finance customers. Here are a few of their stories:
“The team at ComFreight HaulPay continues to impress with their ability to reshape the idea of what it means to be a factoring partner. From seamless TMS integrations for automated accounting to capacity matching from within the system, their heavy investments into the technology platform and engineering team are abundantly clear,” said Nathan McGuire, COO of Wicker Park Logistics.
“ComFreight is the best factoring company which we came across. Double A Logistics is very grateful to have such a factoring company. We are pleased to do business with such a company who has always put our needs first. It’s one company who is always there to help and our relationship is that of trust,” said Akashna Singh, CEO of Double A Logistics and Dispatch.
Secure Your Brokerage’s Financial Future
As the future unfolds, everyone must manage the inevitable disruptions at play in the freight market. Meanwhile, brokers that take their needs and find the right solutions to financial straits will have the opportunity to survive and thrive. That’s the potential of working with a digital freight finance solution like ComFreight’s HaulPay. Get started today by signing up, which is free too, and see how the benefits can help your team get back in the cockpit of your next carrier or shipper interaction.