Truckers face challenges every day. Some of them are avoidable, but others are completely unexpected and frustrating. Breakdowns are one of the frustrating ones that often hit without warning.
While the risk of some breakdowns can be decreased through regular maintenance and inspections before leaving the lot, others are impossible to predict. One thing you can do is ensure you have the funds available to handle these breakdowns.
Understanding Common Breakdowns and Their Cost
Tires are the leading cause of breakdowns. While some tire blowouts are tied to low tire pressure or low tread depth, other causes are harder to avoid. You can’t always avoid hitting debris that fell out of someone’s truck bed, such as a board with nails sticking up or a fallen tree limb on a windy day. Having a spare tire gets you back on the road, but you have to have a new tire. On average truck tires can cost upwards of $1,000 each, though they’re usually around the $200 to $600 range.
Battery and alternator issues are often identifiable before they get bad. It’s still costly, however, and cold weather worsens issues with batteries. Batteries are usually less than $200, but it can make you late for a delivery. Alternators are usually around $200 to $400, and there’s also the wait while a mechanic removes the old one to install a new one.
Brakes are another concern, and it can be a costly one. Until the brakes are repaired, the truck needs to be off the road. Before a driver sets off, brakes should be checked. Brake fluid leaks must be addressed before heading out. Pads, rotors, and calipers may need fixing, too. Brake jobs typically cost upwards of $500 to $600 per axle, depending on the mechanic. Until this is done, you can’t haul loads with that truck, and that loss of business gets costly.
Keep up with regular maintenance to avoid one of the more costly issues facing truck drivers. Engine problems like a blown head gasket often occur over time or when coolant levels are too low and not addressed. If you’re often seeing low oil levels, it’s important to have the engine checked. Having an engine overhauled can cost more than $20,000, and there’s all the time your truck is in the shop adding to your woes.
Finally, one of the more frustrating issues is with electricals and onboard computers. If they fail, it can take time to determine what’s causing the problem. It may also take time for the correct part to arrive. That’s a lot of lost time with deliveries.
Use Freight Factoring to Your Advantage
When you set up a freight factoring account, you’re able to get paid quickly. Typically, a trucker delivers a load and brings the bill of lading back to the office. Someone in the office generates an invoice and bills the client. That client can now take weeks or months to pay the money that’s owed.
Instead of the long wait for cash, submit your request for payment to a freight factoring company. A small fee is deducted from the amount you’re owed, the factor invoices your client, and you get paid immediately. The freight factoring company waits for your client to repay them.
In addition to having quick access to the money you’re owed; your office workers have less work to do in terms of invoicing. They can devote their day to marketing, finding new loads for your drivers, and calculating efficient routes.
Freight factoring doesn’t impact your credit score at all. In fact, it can help improve your score. With a strong cash flow, you have the funds for emergency repairs. You no longer need to rely on business credit cards, which have high interest rates and late payment fees. Those do impact your credit rating. Plus, late and missed payments impact your credit score. Poor credit means loans and credit cards needed in the future are harder to qualify for.
Another factor to consider is that clients often look at a trucking company’s credit history before hiring them. Your poor credit can keep you from getting more work. Are you willing to risk your future and impact how fast your company can grow?
Questions to Ask a Freight Factoring Company
You’re ready to sign up for freight factoring and improve your cash flow. How do you find the best freight factoring company? Four questions help you make the right choice.
What experience do you have in the trucking industry?
There are factoring companies that don’t have a particular specialty. They offer factoring for any qualifying business. Freight factoring companies only work with trucking companies. Not every company has the same experience in the trucking industry, however.
Look for a company’s history in trucking and see if they have a solid history of helping small trucking companies grow into national ones. Explore their industry experience as far back as you can to see what experience they’ve had as truck drivers, trucking company owners, or administrative employees within the trucking industry.
What are your rates and how do they vary?
Most freight factoring companies offer the lowest rates to trucking companies with larger fleets. If you only have one or two trucks, rates will be higher. However, the rates are still lower than credit card or business loan interest rates.
Different factors also impact overall rates. If you want a non-recourse arrangement, it costs more because it reduces your risk of having to repay the money you received in the event your client fails to pay the invoice. Recourse arrangements where you have to repay have lower fees.
If you get paid all 100% instead of an arrangement where you get 85%, 90%, or 95% upfront and the balance when your client pays, that can also impact the freight factoring fee. Make sure you weigh the different options and choose the best plan for your company.
How long does it take to get paid?
Any freight factoring company pays you quickly, and you have the money within a few business days of requesting payment. Saint John Capital is one of a handful of companies that offer same-day payments. As long as you submit your payment request before the deadline, you can have money that afternoon.
What additional services do you offer that can help my company cover emergency and unplanned expenditures?
What other services are available that help your company with emergency repairs and other unplanned costs? Services like fuel discounts are a must. You might also benefit from low-interest business lines of credit, load tracking, and load-finding software.
Saint John Capital helps trucking companies of all sizes navigate the unexpected. You can’t predict when a windshield will get hit by ice off another truck and crack. You never know if a driver will hit debris in the road and blow a tire, but you can have a strong cash flow to ensure emergency repairs aren’t stressful. Fill out the free online form to learn more about freight factoring with Saint John Capital.
