good Non-recourse factoring

Me neither but by booking with recognized brokers only. Perhaps it is too reserved, which could also mean that I might have missed on finding better contacts. I rarely waited more than 30 days though.

 

Oh, I've waited up to 42 days to get paid, not often though, even though my invoice clearly states NET 30 for payment terms.

The key to not having to factor are two fold in my opinion, profitable rates and living within one's means while allowing the cashflow to build.

 

I completely disagree. I use Loves 4% on 300k to the truck that’s 12 grand a year to them. I scan it to them get paid no issues in over 15 months.

How much time do you spend keeping track of the money owed to you? I bet a lot. Even at 20 bucks and hour you get 600 hours a year to break even and I’m guessing your time is worth more than 20 an hour


Be Safe Out There


Captain Dave

 

Scooter,

I wouldn't say as much "lucky" as well-managed. You've done well in 3 years, good revenue #'s and no issue collecting. You must have a good head on your shoulders and able to communicate well with customers. Not everyone has that working for them.

Hopefully, you are seeing your revenue numbers going up. ELD's, truck shortages and the increase in fuel have definitely been a blessing to revenue this year. The key is keeping it going.

I read what you wrote in your post before about asking for more on a rate to help cover the QP fees. I feel the same and always ask for more, regardless if I am using QP or not. It is just a smart business practice to always ask for more. If you sat on the other side of the phone, you'd probably be shocked at how much of the actual rate these brokers sometimes keep for themselves.

Rarely do I accept the rate offered.

I am not saying a load broker shouldn't make money, we all have a part to play, but, 10% of the load is PLENTY for what they are doing. When you stop and consider if you were leasing on to a common carrier and running under their authority, they'd be taking anywhere from 12-30%, brokers shouldn't be making the same. The load broker isn't stuck in the middle on the receivables, they aren't providing insurance or running the risk of freight damage, loss or having the load get stuck someplace.

I know you have your own authority, as do I...I have run in the past as a leased on owner operator, and, it bothered me to know they were taking 30% of the revenue for what they did versus what I did. But, at least they did a lot more for me than just act as a load broker.

For those who are new or don't do this, if a load broker asks how much I will run a load for, I always try to turn it around on them and say "Gee, you got the computer in front of you, what has that load been running for the last 3 times?" If that doesn't work, I say "What is the highest the customer will accept?" And, then I always ask for more. Or, say "Oh, last time I ran this lane I got X" which of course is higher. Or, I say "I have had this load before with another broker and they paid X" (higher).

You might not always get more, but, there is no harm in asking. Generally, if it is a short run, only $600 load, you might not be able to get more than an extra $25 or $50...but, sometimes you'd be surprised, they come back $100 more. If I know the rate is REALLY low or the rates going back out are bad, I'll simply say so. Or, if I have a bigger deadhead going in, I'll let them know that too. You'd be surprised what you might find. I have negotiated $1,200 loads up to $1,650. It all depends on how desperate the customer is to move the freight and how much profit the broker is trying to make. When I hear the broker say "I am not making any money on this" or, "I am only making $25"...don't believe him/her, don't feel sorry. They sit in an air conditioned office, have a bathroom at their disposal anytime they want, take lunch breaks, and work from 9-5 or thereabouts. By far, we work WAY harder than they do.

More brokers are offering QP services now. I used to be a much rarer thing, usually only offered by the big guys like Landstar, CH Robinson, CRST. It seems now you are more likely to find a load with QP service than not.

It's nice to have the flexibility to take it, and, good if you can just wait the standard term so you get 100% of what you are owed.

Now, if we wanted to get under a micro scope and analyze the true economic burden, there is a cost of money for being out of pocket for fuel, tolls, and deferred maintenance for 30 - 60 days. I know you have never been burned on a load, I can't say that I have ever been completely shut out, but, I have been screwed out on things like detention, accessorials, I have gotten paid less than what was negotiated for things that were perceived as my fault that actually weren't, or were miscommunication. I have had customers who damaged my equipment due to improper shipment loading or handling that they wouldn't own up to and pay. Those things cost me money. I have had to FIGHT to get paid, get a lawyer to send a letter or two. I have been blacklisted from a few brokerage's as a result of the issues mentioned.

I think that, if you run long enough in this business, odds are, you are going to take some lumps.

The key is, not to get dinged so bad it really hurts or puts you out of business.

 

Thanks Captain Dave!

I will look into the Loves program, although, 4% seems a bit steep compared to others, but, perhaps there are some ancillary things that make it worth while.

 

I will look into the Loves program, although, 4% seems a bit steep compared to others, but, perhaps there are some ancillary things that make it worth while.

And...I completely agree with the equation on what your time is worth. I'd never take a job for $20 an hour unless I was completely desperate and needing $. I am hoping, if you are earning $300K yr in revenue, you are keeping close to half of that yourself...depending on how any hours you work, you are earning way more than $20 hr, so, might be even fewer hours to break even on factoring.

You are right, your time is worth something, so, every task you can unburden yourself from has got to be worth something.

 

xsetra,

That is a good point too.

I have never had to file on someone's bond, but, I sure have used it as ammo in an argument.

 

Look, if someone wants to pay a loan shark a 48% APR to get their money within a few days, more power to them, ain't no sweat off my back, it's their money, not mine.

I have to say though, the logic that a one man operation spends 600 hrs a year @ $20 an hour keeping on top of his receivables, thus justfies paying a loan shark 48% for their money, is pretty skewed. If he does, he's got real problems! LOL

I can count on one hand the number of times I've had to send an email or make a call to check on a payment status of a payment.

It's really not that complicated...

But once again, as the old saying goes; "different strokes for different folks."

 

I'm at 2% with Phoenix capital