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Why Does It Take So Long To Get Paid In This Industry?

Discussion in 'Ask An Owner Operator' started by Renegade92, Jan 7, 2023.

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  1. Jan 7, 2023 #1
    Renegade92

    Renegade92 Light Load Member

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    It is my understanding that once an OO delivers a load, they don't receive payment until about a month later. In any other industry, you are typically paid in a more timely manner. In other words, in any other industry, you do the job, and get paid shortly after; NOT weeks later.

    Can somebody please explain why it takes so long, and why that delay is unique to OO and trucking?
     
    Renegade92, Jan 7, 2023
    Renegade92, Jan 7, 2023
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  3. Jan 7, 2023 #2
    Long FLD

    Long FLD Road Train Member

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    It’s not unique to trucking. A lot of businesses are 30 to 90 days, some are even vendor managed inventory so not only do they ship loads of product to a business they don’t get paid until after that product sells.
     
    Long FLD, Jan 7, 2023
    Long FLD, Jan 7, 2023
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  4. Jan 7, 2023 #3
    Ruthless

    Ruthless Road Train Member

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    What businesses are you thinking of? Like pizza delivery?
     
    Ruthless, Jan 7, 2023
    Ruthless, Jan 7, 2023
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  5. Jan 7, 2023 #4
    Renegade92

    Renegade92 Light Load Member

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    Ok, maybe I was wrong about it being unique to the trucking industry.

    But still, why does it take so long? The way I see it, a trucker is given a job to deliver a load. He does it. I don't understand why it takes weeks to get paid. He/she should be paid as soon as the job is done. Not a month later.
     
    Renegade92, Jan 7, 2023
    Renegade92, Jan 7, 2023
    #4
  7. Jan 7, 2023 #5
    abyliks

    abyliks Road Train Member

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    a company I used to work for was 120 day billing because they would get paid and put your money in a 90 day CD to make interest off YOUR money before paying you

    I’ve got a few 7, 14, and a 21 day customer, really just all depends, the longer you make me wait the more I charge though
     
    abyliks, Jan 7, 2023
    abyliks, Jan 7, 2023
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  8. Jan 7, 2023 #6
    wis bang

    wis bang Road Train Member

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    Money and banking class in college teaches business to collect payments as rapidly as possible while delaying sending out payments to your suppliers and make interest on the float.
     
    wis bang, Jan 7, 2023
    wis bang, Jan 7, 2023
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  9. Jan 7, 2023 #7
    Allow Me.

    Allow Me. Trucker Forum STAFF Staff Member

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    I suspect brokers don't want to "front" any $$$ to the trucking co. That means they book the load, the truck co delivers it, but the broker hasn't been paid yet from the shipper, so, until he does, the truck co. waits, and waits and waits. Most business models only pay vendors around 30 days. When you do millions in business monthly, holding off means more $$$ in interest.
     
    Allow Me., Jan 7, 2023
    Allow Me., Jan 7, 2023
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  10. Jan 7, 2023 #8
    Antinomian

    Antinomian Road Train Member

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    Not even close to being true. Every business that extends credit has a payment terms policy yet often has to hound their customers for payment. Being paid immediately is the exception, not the rule. If you are getting your invoices paid within 30 days then you are doing good.
     
    Antinomian, Jan 7, 2023
    Antinomian, Jan 7, 2023
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  11. Jan 7, 2023 #9
    KrumpledTed

    KrumpledTed Medium Load Member

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    Pretty much every industry has 14/30/60/90 day terms. However, and this is also not unique to trucking, most of our expenses are up front. It is mainly about managing your cash flow with a 1-2 month lag time.

    Of course many brokers offer quick pay for a percentage of the gross. And there’s factoring companies as well.
     
    KrumpledTed, Jan 7, 2023
    KrumpledTed, Jan 7, 2023
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  12. Jan 7, 2023 #10
    NightWind

    NightWind Road Train Member

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    NightWind, Jan 7, 2023
    NightWind, Jan 7, 2023
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