Monthly Archives: March 2020

The Impact Fuel has on the Logistics Industry

Nearly every member of the logistics industry has felt the implications of evolving and often erratic fluctuations in fuel costs – leading to industry instability. Rapid variation from the fuel status quo, severe drops or rises in costs could result in a profit boost or a surge of competition. Regardless of the outcome, many trucking companies do not understand the direct effect fuel costs have on the logistics industry. In the content below, we explore and demonstrate the implications of fuel costs, helping freight companies aptly prepare for when fuel fluctuates.

The State of the Logistics Industry

Before discussing the implications of fuel cost fluctuation, it is imperative to understand the current state of the logistics industry. As an industry, logistics and transportation are highly competitive in the United States. Select USA states:

By investing in this sector, multinational firms position themselves to better facilitate the flow of goods throughout the world’s largest consumer market. International and domestic companies in this industry benefit from a highly skilled workforce and relatively low costs. United States Business Logistics Costs reached $1.6 trillion in 2018 (8 percent of GDP that year).

The complex logistics and transportation industry play an integral role in national and global markets. Thus, changing fuel costs impact a highly competitive and economically vital industry. From this perspective, fluctuating fuel costs are worth diving into, as both members of the logistics industry and members of the global market.

What Happens When Fuel Prices Rise?

When fuel cost rises, trucking companies have two choices: raise prices or incur losses. Of course, trucking companies do not operate as a single entity. Therefore, fluctuating fuel prices ultimately affect the shipping company and the shipper’s profit source as well. If trucking companies are required to spend more during transportation, shippers will either be charged more – or trucking companies experience a loss in revenue. Shippers, paying more for transportation, will charge the receiver enough to make up for the increased rate.

Furthermore, fluctuations in fuel costs affect all members of the logistics industry, from trucking companies to receivers – ultimately, extending to the general public. How? As fuel prices rise, transporting freight via trucking fleets becomes less economically viable and inefficient relative to market demand. To account for increased expenses, consumers must purchase goods at higher costs. In an already competitive industry, decreased demand also proves detrimental for logistics companies.

When fuel prices rise exorbitantly, product inflation follows. When trucking companies are forced to pay for higher fuel costs, consumers pay for higher product prices.

What Happens When Fuel Prices Drop?

As expected, when fuel prices drop, the opposite occurs. Savings in fuel are ultimately passed along to the consumer. As cost decreases, market demand increases, resulting in greater shipping service demand. Trucking companies tend to flourish during these times as demand increases and cost decreases. In this scenario, companies no longer worry about fuel prices and can relegate efforts into service efficiency and company improvements as a result. Ultimately, lower fuel costs result in decreased transportation prices and decreased product prices.

Can Fuel Logistics Companies Prepare?

While the increase or decrease of fuel prices directly affect the profitability of the logistics industry, volatility and rapid change is perhaps the most challenging aspect of fuel fluctuation. Most trucking companies calculate fuel surcharges based on the previous week’s prices. Unfortunately, the speed upon which fuel prices change often catches companies off-guard – an unavoidable lag between actual prices and surcharge estimates exists. Of course, if fuel costs decrease exponentially, companies experience higher profits. However, fuel costs often rise again, setting companies back.

Regardless of fluctuation patterns in the cost of fuel, trucking companies can and should take steps now to prepare for unavoidable fuel price fluctuations.

Control Fuel Usage

Regardless of the size of the fleet a trucking company is managing, it is wise to carefully control your fuel inventory and usage. Cardlock systems provide extraordinary accountability of fuel usage, tracking every gallon of fuel utilized. Unauthorized fueling is quickly and often identified, fuel theft is prevented, and real operating costs are revealed. Trucking Info insightfully explains the importance of controlled fuel usage:

Today’s fuel control systems also can help drive efficiencies in your operation. For example, many fleets still rely on manual statistical inventory reconciliation, which is inaccurate, inefficient, and expensive. Automated reconciliation programs eliminate hours of manual data collection, calculation, and reporting, and today’s software-based solutions improve the accuracy of the fuel usage data that is collected. Fleets that incorporate a tank gauge and a full-featured reconciliation software into their system significantly increase the depth of inventory data available to them while also streamlining reconciliation procedures. Through instant visibility into fuel volumes and anticipated usage, fleet directors are able to optimize the timing and pricing of fuel deliveries, a cost-cutting strategy that quickly pays off, whether buying millions of gallons of fuel annually or less than 50,000 gallons.

Controlling fuel usage should ultimately lead to reduced fuel consumption. For some trucking companies, this may look like streamlining routes, selecting more environmentally-friendly fuel alternatives, maintaining vehicles, or hiring more efficient drivers.

Evaluate Shipment Packaging

Along with strict observation and documentation of fuel usage, reducing extraneous costs in other areas prepares companies for fuel fluctuation. Shipment packaging is one area to re-evaluate. Can reductions be made in the use of cardboard or in the amount of space occupied?

Automate Processes

Automating manual processes to reduce staffing requirements is another key consideration. Can processes be automated while remaining scalable, controlled, and cost-effective? Will customer satisfaction be improved?

Ship Less Often

If possible, transport bulk shipments less often and avoid small, frequent trips. Highly profitable trips involve multiple carrier stops along a single route.

Efficient Factoring Services for Truckers with Advanced Commercial Capital

At Advanced Commercial Capital, we are poised to help your trucking company thrive. During difficult periods of intense fuel fluctuation, we provide factoring services for truckers, tailoring our solutions to the cash needs of the trucker. Our team understands the unique needs and challenges faced by trucking companies of all sizes, paying for fuel, maintenance, and payroll – while waiting to get paid by customers.

Factoring with Advanced Commercial Capital means you receive immediate cash, without waiting to receive your money. Thus, when you need immediate invoice funding, we provide it. Your rate will never change, and you won’t be responsible to buy back uncollected invoices.

To get in touch, contact us today at 855.465.4655 or via our online contact form! We look forward to walking beside your company and watching it thrive.

Commercial Truck Maintenance: Checklist and Importance

Maintaining a fleet of commercial trucks is of absolute importance to a thriving transportation company. Both company fleets and driver-owned commercial trucks are often neglected due to the time commitment demanded by regular maintenance. However, any extraneous time spent repairing commercial trucks is far outweighed by the positive results. In the content below, we explore the importance of commercial truck maintenance – outlining a checklist to simplify the process for you and your fleet!

Commercial truck maintenance impacts a company’s bottom line, proving cost-effective for a plethora of reasons. Thus, regular preventative maintenance should be a routine element to your company strategy.

1.) Fewer Unexpected Breakdowns

Regular commercial truck maintenance reduces the number of vehicle breakdowns. Unexpected time spent off the road and in the shop dramatically outweighs moments spent performing maintenance on your fleet. Furthermore, breakdowns produce unexpected disruptions in your operations schedule, causing shipments to fall behind. After identifying an issue, do not wait to fix it! Perform a minor repair in preference to delaying it, allowing the issue to compound until major damages eliminate your truck from action for an extended period.

2.) Fewer Accidents

According to the United States Department of Transportation, there are approximately 500,000 truck accidents – supplying nearly 2.5% of all vehicle accidents in the country. Although passenger vehicle drivers majorly contribute to this shocking statistic, the poor condition of commercial trucks also plays a significant role.

Regular maintenance helps prevent unexpected tragedy. For example, brakes should be regularly examined and maintained. Waiting to examine brakes until grinding, squeaking, whining, or complete failure occurs renders the vehicle extremely dangerous – unfair to fleet drivers and surrounding vehicles. Simply put, performing routine maintenance always results in fewer accidents and smoother daily operations.

3.) Reduced Operating Cost

Lessening the number of major repairs is one important facet of reduced operating cost. Maintained commercial trucks, operating at optimal functionality, also lower both your business fuel expenses and insurance bill. Furthermore, lengthening the life of your commercial truck compounds your initial vehicle investment.

4.) Increased Customer Satisfaction

As mentioned, unexpected breakdowns disrupt business operations, resulting in inconsistent, unpredictable delivery times. In the worst case, a simple breakdown potentially results in the loss of a large client. A dissatisfied client may turn to a competitor who delivers consistently, on-time, and without unexpected repairs.

5.) Abide by the Law

Surprisingly, most commercial vehicles do not meet the proper, required road safety standards. Performing regular maintenance and minor repairs ensures high probability in passing the Commercial Vehicle Roadworthiness Tests (CVRT) upon first inspection.

Commercial Maintenance Checklist

Commercial truck fleet managers are not obliged to create a proper maintenance checklist. The Federal Motor Carrier Safety Administration (FMCSA) – the U.S. Department of Transportation’s federal agency supervising commercial truck operations – outlines an excellent pre-trip vehicle check.

Pre-Trip Maintenance Checklist

These simple pre-trip maintenance checklist items can easily be performed by the truck driver. FMCSA’s pre-trip checklist includes:

– Check all truck tires. The FMCSA states that tires account for nearly one-third of commercial truck maintenance costs. Thus, careful inspection is crucial. The truck driver should especially examine air pressure and tire tread.
– Check all fluids. Checking fluids includes both searching for leakage and inspecting for adequate amounts of fluid. Pay attention to coolant, antifreeze, fuel, and oil. Finally, the driver should start the truck and ensure all dashboards lights confirm his or her conclusion.
– Check the brakes. The driver should examine the standard and parking brakes. Drivers should find proper lining, a leak-free air pressure system, auto-engaging parking brakes, a functioning low-pressure alarm, and proper air pressure rates.
– Check all electrical systems. All electrical components and wires should be verified for proper functioning, including brake lights, headlights, turn signals, flashers, clearance lights, and warning lights.
Taking ten to thirty minutes reviewing the aforementioned items dramatically helps reduce the risk of unexpected breakdown and accidents.

Scheduled Maintenance Checklist

Along with regular pre-trip maintenance, be sure to schedule in-depth maintenance checks on your trucks. If a series of effective, preventive maintenance is scheduled to occur, follow-through is highly probable! As an individual driver, it is up to you to schedule or perform regular inspections. However, if an issue arises, notify the appropriate individuals. Furthermore, companies with a large fleet of commercial trucks should hire or outsource professional technicians to perform regular maintenance, usually inside a facility. Of course, the maintenance checklist should be completed, documented, and filed. JB Tools, an automotive repair supply provider, provides a helpful checklist, including:

– Engine oil and filter changed
– Transmission fluid checked
– Fuel and cooling systems, including leaks
– Engine and transmission mounts
– Drive shafts or CV joints
– Belts and hoses
– Various tune-ups
– Aforementioned electrical system components
– Brakes
– Steering and suspension system
– Tires, wheels, and rims
– Exhaust system
– Undercarriage and frame
– Exterior and interior lights
– Body, glass, and mirrors
– Windshield wiper system
– Horn
– Seat belts and seat structure
– Auxiliary systems

Summer & Winter Maintenance Checklist

Specific maintenance should be performed during the intense heat of summer and the frigid cold of winter, as applicable to location. During summer maintenance, emphasize the cooling system by inspecting for radiator corrosion, examining the coolant system for adequate pressure, and monitoring the water pumps for leaks to assure the engine maintains proper temperature.

The winter also demands extra preventative precautions, emphasizing truck parts that may be affected by snow, ice, and extreme cold. Winter maintenance inspections may include the following: engine heaters, coolant levels, glow plug operation, exhaust system, radiator, tires, and heated mirrors.

Taking the extra precaution to perform proactive maintenance year-round – and during extreme seasons – pays off for private commercial truck drivers and companies commanding entire fleets.

Advanced Commercial Capital

At Advanced Commercial Capital, we understand that – even with the best preventative maintenance plan in place – emergencies happen, and trucking companies require extra cash. We provide excellent freight factoring services with quick funding and valuable benefits. We never surprise our customers with hidden fees or required long-term contracts.

Our clients love working with our team, and we would love to talk to you about a future partnership! To get in touch, call toll free at 855.465.4655 or reach out via our online contact form.

9 Ways to Reduce Freight Costs

Transportation businesses are acutely aware of freight costs, often a burden during periods of potential growth and profitability. At the same time, freight costs are often a bit of a mystery. They exist – but businesses may not know how to take control, evaluate avenues of expense, and refocus to reduce spending. In the content below, we explore 9 strategic practices to reduce international freight costs.

1. Evaluate Your Budget

As with any business, understanding where the bulk of your budget is allotted to every month is hugely important. Every time a truck is sent out, how much money are you making? Have you created a profit-loss statement recently? Tracking expenses is the beginning of taking control of your freight business finance and reducing costs. For example, are you spending an extraordinary amount on a full-time accountant? Perhaps consider outsourcing accounting services or utilizing software and tackling the task in-house.

2. Inspect Intangible Costs

Intangible costs are extraneous charges that are not apparent in a profit-loss statement. A lack of communication, workplace dissatisfaction, or poor attitudes can severely cripple efficiency and productivity – ultimately wasting resources. Spend time motivating employees, expressing a desire to communicate well, and building a high-quality team. These intangibles will impact freight costs in the long run.

3. Evaluate Trailer Loading Efficiency

When was the last time you paused to evaluate your packing freight efficiency? Packing efficiency is one of the simplest, quickest ways to reduce freight costs. Reducing the amount of dead space between freight will immediately lower rates – packaging plays a significant role in loading efficiency. Is your packaging optimal for efficiency? Cory Levins, Director of Business Development for a packaging agency, writes:

Packaging should be designed earlier in the process to adjust for transportation and warehousing needs. While dunnage, blocking, and bracing are necessary to ensure the products arrive safely, especially for a long journey, they can sometimes be used in excess. Work with your packaging supply to use the appropriate amount of dunnage for safe transportation.

4. Ship Less, in Bulk

Transporting a specific volume of goods in a single, bulk shipment is more cost-effective than sending the same volume in multiple, small deliveries. Consumers understand the significance of purchasing in bulk, demonstrated by the existence of Costco and similar suppliers. Shipping regularly, regardless of order size, often results in time wasted processing, loading, and unloading. For transportation businesses, shipping large orders in bulk – or multiple shipments combined into one – closer to the point of sale allows for greater shipment efficiency.

5. Ship Off-Peak, if Possible

Unless your transportation business deals with perishable goods, shipping off-peak is a simple way to reduce freight costs. Significant savings can be achieved by adjusting a day or even an hour or two later. Fridays and Mondays are two off-peak days.

Pursuing backhaul shipping is yet another cost-effective transportation option. Carriers should make an effort to fill empty trucks on their way back to base, always checking for extra backhaul capacity. Carriers are often most willing to backhaul during evening hours to avoid mid-day conflicts.

6. Utilize Modern Management Systems

Inventory management systems are an insightful tool for transportation business owners. Data received can be utilized to identify weaknesses within the shipping system. For example, do certain carriers average higher late delivery rates? Are specific routes prone to increased breakage? Evaluate the results and make adjustments as necessary.

7. Outsource Where Possible

Staying faithful to your niche is hugely important for a business aiming to remain profitable in the long run. If other needs arise, outsource. Ultimately, the more services and skills you attempt to tackle, the more difficult it can be to remain excellent in each. If you must get involved in other niches, or learn a new skill, it is often best to outsource to a professional.

8. Perform Regular Maintenance on Equipment

Every trucking company owner fully understands the costs associated with truck upkeep. However, surprise repairs incurred when something breaks down cost significantly more. Performing regular maintenance is cost-effective in the long-run, ultimately proving more effective than waiting for something to stop working. Furthermore, a severe repair may remove a truck from commission for an extended period of time, crippling your workflow and bottom line.

9. Freight Factoring

Freight factoring is an incredible resource available to trucking companies in need of capital – instead of waiting for payments. Factoring means immediate cash without waiting for money, ultimately allowing companies the resources necessary to grow and expand without being pressed for payments. Advanced Commercial Capital’s freight factoring program provides freight companies peace of mind – your rate will never change, and you won’t be responsible to buy back uncollected invoices. Furthermore, Advanced Commercial Capital doesn’t lock clients into long-term contracts. Freight businesses can utilize factoring services while profitable and choose to stop at any point without enormous fees.

Advanced Commercial Capital

At Advanced Commercial Capital, we are dedicated to making freight factoring as simple and easy as possible, providing every client the precise service they need. Because of our dedication to excellence and passion for the success of our clients, we have become one of the leading freight bill factoring companies in the U.S. Furthermore, your ability to qualify for factoring services is primarily based on the creditworthiness of you customers, not you – an excellent option for new companies without a robust credit history.

To learn more about our services, contact us today at 435.673.4655 or via our online contact form!

What is Freight Factoring?

Did you recently start a transportation company? Are you hoping to take your existing company to the next level? Strong cash flow is critical to long-term business success in the trucking industry – and a plethora of other industries. Experienced truckers often strongly recommend a factoring partnership for startup companies looking to succeed in business. In essence, freight factoring is a huge deal in the transportation stratosphere. Why? When should a company owner utilize freight factoring? In the content below, we explore factoring, the best time as a transportation company to look into a partnership, as well as a variety of benefits associated with the service.

What is Freight Factoring?

In short, factoring is a financial service whereby a financial institution – or factor – purchases accounts receivable from a business, typically at a discounted rate. This rate is called a factoring fee. When a transportation company sells the accounts receivable, they immediately receive cash. The factor is then legally entitled to receive payment for the invoice. Thus, factoring provides new transportation companies the ability to receive consistent cash flow to maintain trucks, employees, and day-to-day operating expenses.

Why Not Just Choose Traditional Bank Financing?

Trucking companies may wonder why factoring proves more beneficial than traditional bank financing. Primarily, qualifying for factoring services is based upon the creditworthiness of a trucking company’s customers – not the company itself. Companies with a history of integrity and honesty are often chosen for a factoring partnership; however, the weight of decision largely rests on the trustworthiness of a company’s clients. Additionally, speed is another consideration. Trucking companies can often begin a factoring partnership within a few days, while bank loan approval takes time.

Recourse Factoring

Recourse factoring differs from non-recourse in a single, significant way. While involved in a recourse factoring partnership, your trucking company is ultimately responsible for the invoice if the client does not pay in full. To minimize the risk involved, freight factoring companies often provide credit checks to guide in proper, informed decisions before accepting a load.

Non-Recourse Factoring

Non-recourse factoring protects the trucking company from falling into debt, should a client fail to pay the invoice. If this happens, the trucking company is not legally responsible to pay the bill. Instead, the factor takes the risk of the freight bill not being paid. As one may assume, non-recourse factoring fees are typically a little higher than recourse factoring. However, this option is often best for a young transportation company that cannot properly handle the risk of a client who doesn’t pay.

When Should I Utilize Freight Factoring for Trucking?

As mentioned, savvy trucking professionals with years of experience often recommend freight factoring as soon as possible. You should utilize freight factoring as a new company, looking to succeed in the long run, or an existing company in need of consistent cash flow to grow and develop. Immediate, reliable cash flow is important for a startup transportation company. Processing payments takes time, emergencies arise, and clients sometimes fail to pay in full when required.

Furthermore, as a new business, you may not possess a robust, positive line of credit – often the only way to receive access to funding as a company. Freight factoring companies understand that startup companies are frequently without an established line of credit. Startup companies often do not have the time or expertise to properly handle invoicing and collections without stress. Freight factoring companies deal with the general accounting responsibilities associated with invoicing and collections, allowing you to manage other daily tasks with peace of mind.

Finally, fluctuation happens in business, and freight factoring partnerships provide the flexibility startups require. Most factors require long-term contracts, but Advanced Commercial Capital does not lock you into a long-term contract. Instead, the service is provided as you need cash flow to fund your business.

What are the Benefits of Freight Factoring?

1. Factoring Is Debt-Free

Debt is an unavoidable necessity and often associated with starting a business. However, in the transportation industry, this is not always the case. Funding your trucking business with freight factoring allows for debt-free business startup, because factoring is not equivalent to requesting a loan.

2. Factoring Is Beneficial for a Growing Business

When demands associated with business growth weigh on your shoulders, factoring provides an incredible opportunity to hire drivers and purchase trucks before receiving payments. As demand increases, factoring allows you to fall in step with business growth and thrive in the industry.

3. Factoring Offers Flexibility

As mentioned previously, freight factoring with Advanced Commercial Capital can be a short-term arrangement, but can also be a long-term financial tool to help you meet your business goals. If you need to factor some but not all of your invoices, that is perfectly acceptable. Factoring is designed to aid trucking companies as needed – and not necessarily be an all or nothing service.

4. Factoring Allows for Invoice Tracking

After a load is delivered, a trucking company may not receive payment for 30-90 days, depending on the specific contract. But through factoring, trucking companies get paid immediately. Additionally, factors generally keep track of invoices and handle collections, so you don’t have to.

Advanced Commercial Capital

At Advanced Commercial Capital, we provide the best service with the most competitive rates in the factoring industry. We always keep our client’s best interest in mind, dedicated to doing everything possible to help our clients succeed. We see ourselves as your financial partner. Below, we’ve listed a few benefits associated with working alongside our company:

• No long-term contracts
• No application fees
• No setup fees
• No termination fees
• No monthly service or maintenance fees
• No liability to you if the debtor doesn’t pay
• None of your money will be held in reserve
• Non-recourse factoring – we take all the risk!
• Payment with legible copies
• Education with a patient, experienced staff

These benefits are only a small sampling of the industry-leading factoring services we offer! To learn more about our company, feel free to give us a call today at 855.465.4655 or reach out via our online contact form. We look forward to helping you discover the right financial solution for your needs.