Hauling for Direct Shippers

Discussion in 'Freight Broker Forum' started by joker760, Feb 21, 2013.

  1. joker760

    joker760 Light Load Member

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    When dealing with direct shippers, how long do they usually take to pay for your services???

    I ask as I've never moved any freight from direct shippers, I've always relied on brokers. A few weeks ago I read somewhere they sometimes take up to three months to pay brokers; from the same reading I believe someone mentioned they were paid COD. I honestly wouldn't mind waiting 30-40 days to get paid, however I'm not so sure I would be willing to wait 60-90 days. As for the "rate confirmation", do you have to create one and make them sign it or will a signed BOL suffice ???
     
  2. Oregon Grown

    Oregon Grown Light Load Member

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    Some pay almost immidiately
     
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  3. stocktonhauler

    stocktonhauler Medium Load Member

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    I think you already understand the value of a DOT registered broker. They pretty much have to pay up within 30 days. If they don't call the load board where they found you and complain, or call OOIDA. As you found, shippers aren't regulated by law, so it helps if the confirmation agreement has the "days to pay" written right on it. While most shippers aren't going to jerk you around too much, if they seem defensive about exactly when and how you'll get paid, I'd be reluctant to work with them direct. You shouldn't have to apologize for squaring away payment details in writing before loading the trailer. That's business.
     
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  4. ralph

    ralph Road Train Member

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    I hardly believe that Bob's Trucking needs a written agreement to haul a bit of crap for Bill's Manufacturing. I'd be more concerned about Bill's credit score than some legal agreement.
     
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  5. Marlin46

    Marlin46 Medium Load Member

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    A couple of small shippers that I work with are ( friend of a friend ) type deals and they typically will send over a BOL and they ask what the rate is first and we have a few emails going back and forth. When I submit my invoice typically put 15 days to pay in the box but it usually stretches to 21-30 days till I actually get paid. I will also send a copy of those emails in with BOL and Invoice and that serves as kind of the rate confirmation. A small shipper may not have actual rate cons. If it is a small or medium size shipper then 15-30 days is generally accepted. If you have somehow made it into a Fortune 500 shipper directly then you may wait up till 90 days.
     
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  6. bullhaulerswife

    bullhaulerswife Forum Leader/Admin Staff Member Administrator

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    You also can add your payment terms to the invoice. So if you want paid sooner, then on the invoice Place a clause at the bottom. Something that says "Payment Due 7 days from date of invoice." That usually speeds up the payment, in my experience. Because they know that they will be getting past due notices after those terms.
     
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  7. Calspring

    Calspring Light Load Member

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    It will be a unique situation with each company and something you can try to negotiate with them. It will depend on the company about how flexible they are. If they are a small company with a bookkeeper in the office they could get a cheque to your in as little as a day. If it is a large company with a centralized Accounts Payable department then they will have a predetermined time frame to pay you, as they will process the cheques on a weekly or monthly basis.

    I am paid by two different companies. The first is a larger organization. They pay automatically 6 weeks after. I do not need to bill as it is all done within their order system. For the other they are smaller so I won't be paid until I send in my invoice. It will vary sometimes they will write me the cheque that day, sometimes it is a few days later but it is always within 15 days.

    If you are hauling consistantly for a company or group of companies it will not become too big of a deal how long it takes them to pay you especially if the volume you haul is relatively stable. I was getting low on cash when i first started up waiting for my first payment for 6 weeks, but now that i receive it every week it doesn't matter too much to me if it was 2 weeks of 12 weeks after the load was hauled. I just had my christmas and new years payments go through the past two weeks, they were low because of the few loads I hauled but now I am back up to my normal weekly revenue.


    If you want to get paid quicker you will have to offer a better rate. a 2/15 or something like that where they will get a 2% discount if they pay within 15 days. I would advise against that as trucking is low enough margin I wouldn't walk away from 2% of the load. This industry is all about cash management. Work with your bank to see if they can get you set up on a Revolving loan or Line of Credit. Dont use it regularily but it can help out in an emergency. For myself I try to keep an average balance of about $25,000 per truck in the account. Some weeks in a month it will climb higher but for the middle of the month when payroll, truck payments and fuel all go out within a few days it will dive quick. I haven't set up a LOC yet as I am a new business and want to have year end financials first before I apply for one.
     
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  8. x-dispatcher

    x-dispatcher Bobtail Member

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    This is absolutely correct. Credit is your best asset. I would caution however that you do not want to pull credit from certain bureaus like Experian or Trans Union as they are more consumer related. I would also tell you that using a load board to verify credit is also not recommended there data is often (45) days old. The best bureau to use for a trucking company is Compunet. They provide literally up to the minute credit scores utilizing Dun & Bradstreet and assessing the PayDex score, provide a payment history to other trucking companies and the HI/LOW credit extended from trucking companies. The service price is reasonable and always correct. I am an independent truck dispatcher and rely on it heavily. Hope this helps.
     
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  9. x-dispatcher

    x-dispatcher Bobtail Member

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    Sometimes shippers do take (90) days to pay. You have to take this into consideration when assessing the rate. If you know they have a slow pay history, you raise the rate it is that simple. You have to structure the payment clauses in your contracts (Not Rate Confirmations) that they will be assessed a premium invoice rate if payment is made after a certain amount of days. If payment is made within an appropriate time frame "Say 30 Days" then a discount rate or normal rate would be applied.
     
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  10. ShortBusKid

    ShortBusKid Heavy Load Member

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    Ask them. I have one that pays in 7 days off faxed bills, one that is 30-45 days and kind of a pain. I would definitely check credit before hauling. One does e-mailed rate confirmations and the other does a fax just like a broker would.
     
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