Heavy haul trucking is a specialized transportation sector for oversized and extra-heavy cargo. While it’s a critical sector of the trucking industry, it’s also one where careful planning and consideration must be taken to ensure there are quick solutions to any problems that arise.
With heavy haul trucking, the equipment that’s required is often specialized, and permitting processes are much more complex. There can be additional rules in areas that limit heavy haul trucking to specific hours and days of the week. Explore the intricate nature of heavy haul trucking, the rules you often must navigate, and the benefits of freight factoring when you haul specialized freight.
Understanding the Challenges of Heavy Haul Logistics
Because heavy haul trucking involves unusual freight, such as sectional homes, turbines, construction equipment, and heavy military equipment, it can be a lucrative business, but it also poses problems that you can’t ignore.
These heavy loads require special equipment such as extendable axles, cranes, and lowboy trailers. You also need to get the right permits, and route planning takes special care as your drivers may not be allowed to go on certain roads at all or during certain hours. The ability to plan around these restrictions is a must.
Those are the challenges that people usually consider, but there’s something that people don’t think about. Heavy haul trucking invoices may not be paid as quickly as others. While many haulers are paid every 30 to 60 days, heavy haul trucking brokers and shippers may not pay for 90 to 120 days.
Waiting upwards of four months to get paid is hard on any company. Even with a solid reserve of cash, four months without incoming funds is brutal.
The Downfalls of an Unsteady Cash Flow
When you don’t get paid on time, you can’t pay your creditors on time. Some might be nicer about it than others. When you pay bills late, expect creditors like credit card companies to take on late charges and high interest rates. If you don’t pay within 30 days of the due date, you’ll find it hits your credit report and starts lowering your score.
As your credit score plummets, the interest rates you’re offered on truck loans, business loans, and credit cards increase dramatically. Poor credit leads to more money spent paying for necessities like a warehouse or garage, trucks and trailers, and business credit cards. It becomes harder to pay your bills due to the rising interest rates, and that adds to the vicious debt cycle.
If you don’t pay your employees on time, you face penalties from your state’s Department of Labor. Plus, you could lose valuable employees to your competitors.
Manage Your Cash Flow Using Freight Factoring
Instead of dealing with the negative impact of waiting months for a heavy haul invoice to get paid, freight factoring pays you the same day or within a day or two, depending on your bank. You have a consistent cash flow coming in, which makes it easy to pay bills on time.
The money that’s coming in covers bills and payroll, but it also helps you invest in equipment upgrades and expand your fleet. You can quickly grow your company to better serve your clientele.
The factoring company generates the invoices for you. They also chase late payments, which frees up your time. You transfer the invoices from their software to your accounting software, and bookkeeping takes far less time. Your office staff can focus on route planning responsibilities to ensure your drivers don’t get stuck on routes at the wrong hours.
Freight factoring is a service where you pay a small fee in exchange for immediate payment. That fee is typically less than 5% (depending on the number of trucks in your fleet). The factoring company deducts that fee from the money your broker or shipper owes you. You collect payment that day instead of waiting months.
Choosing the Best Factoring Company for Heavy Haul Trucking
While freight factoring can be a valuable tool, you do need to pick the best heavy-haul factoring company. Look for a company that has several decades of experience in freight factoring. Compare rates between companies to see which offers the best rate for the services you gain in return. Check for hidden fees to make sure you’re not missing anything.
You want a flexible freight factoring arrangement. If you have to factor every invoice you generate, it may not be worthwhile, especially if you have trusted clients who’ve been with you for years. You also want to choose a factoring company that is easy to reach and responds quickly to your questions or concerns.
Ask to view the contract first and read it over. Look for hidden fees that weren’t shared with you from the start. A company shouldn’t be hiding terms in fine print, especially when those terms drive up the cost of factoring.
Consider These Additional Benefits of Factoring
There are other benefits added to many freight factoring plans. One of the best is the access to fuel discounts. Even saving a few cents per gallon can lead to substantial monthly savings. Many freight factoring arrangements include free business credit reports. You can take on new clients after thoroughly vetting them to ensure they pay on time and have a solid credit rating.
Your billing and collections are streamlined with one experienced factor, and that’s beneficial to many clients as they can pay online and not have to write out or mail you a check and then wait for it to get deposited and clear your bank.
You have access to real-time reports on what money is being deposited to your bank soon, what invoices are outstanding, and what you haven’t yet submitted for factoring. It’s all there in one app, which streamlines your bookkeeping duties.
Many factoring companies offer load-finding services. You can look for more heavy haul job opportunities and grow your client base.
Use Factoring to Navigate the Heavy Haul Industry
One of the best ways to improve your cash flow is through a freight factoring partnership. Instead of waiting months to get paid, you have money coming in regularly, which makes it easier to keep up with fuel costs, permits, etc.
Make sure you choose an experienced freight factoring partner. Saint John Capital has been in the freight factoring industry for several decades. We offer both recourse and non-recourse factoring arrangements. Non-recourse arrangements are ideal if you’re looking to avoid taking much risk.
When you balance the challenges of the heavy haul industry and carefully select a factoring partner with a lot of experience in the field, you’ll find it easier to navigate the complex world of specialized freight and easily manage your company’s growth. Saint John Capital is the partner you need to grow your heavy haul business.
