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Key things to know about freight factoring

Key things to know about freight factoring

Freight factoring is one of the most beneficial services for the trucking industry. It helps trucking companies get their payments from their brokers much faster. Doing so ensures they work smoothly without worrying about their outstanding payments. Freight factoring is a critical concept people must understand if they are in the trucking sector. What follows are a few details about freight factoring, like what it is and how it works.

What is freight factoring?
Freight factoring is a convenient system for trucking businesses. It lets them give their invoices to factoring companies and immediately receive the payment. Without a factoring company, a trucking business would have to wait months or weeks wondering when their clients or customers will send their outstanding payments.

A factoring company overcomes this problem. It instantly pays the trucking business once it hands over the invoice to them. Of course, they also charge a small fee for this service.

How does freight factoring work?
Here are a few details about freight factoring to better understand how the whole process works:

  • First, a trucking business approaches a factoring company for its services. Based on their requirements and business specifics, the factoring company designs a contract for the trucking firm.
  • After approving the contract, the trucking business notifies its brokers or customers about the factoring.
  • Next, the trucking firm carries out its business as usual – by booking a load and signing a bill of lading during both pickup and delivery. Once they deliver the load, the driver receives the signed invoice for the delivery.
  • The trucking company now gives the bill of lading, a copy of the invoice, and other required paperwork to the factoring company.
  • The factoring company pays the trucking business for the delivery. It also receives a small fee from them for the service.
  • The trucking business usually receives payment from the factoring company within 24 hours of submitting the invoice. On the other hand, the factoring company waits 30 to 90 days for the broker to send their payment for receiving the load.

Types of freight factoring
There are two common types of freight factoring services:

Non-recourse
The trucking company is not held responsible if its client fails to pay for their delivery. Instead, the factoring company bears the loss. However, the factoring company charges a higher fee for this arrangement.

Recourse
The trucking company is responsible if its client does not pay for the delivery. A part of their payment will be kept reserved until the factoring company receives the full amount from the client. The factoring company charges a lower fee in this scenario because it bears lesser risk.

Benefits of freight factoring
The trucking industry enjoys many benefits because of freight factoring:

Ensures smooth working
A factoring company pays the trucking firm immediately so it can carry on its tasks without any financial challenges. It benefits small or new trucking firms operating on low capital.

No long-term contracts
Most factoring companies do not design long-term contracts for trucking businesses. So, if a trucking business wishes to discontinue the factoring service with a particular company, it would not have to wait for long.

Additional benefits
A lot of factoring companies also offer additional services and benefits to trucking companies. These include discounts on fuel, free credit checks for new clients, assistance in the insurance process, and more.

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When it comes to printing, some mistakes can prove more costly than others. It is important to learn to recognize mistakes early and correct them so that you can get the best quality prints. From leaving the right margins to choosing the correct print quality, being aware of minor details can help. Here are four common printing mistakes and ways to avoid them, so you get a quality print each time. Not creating bleeding space Even though machines have become far more precise in cutting artwork to its intended size, you may still find 1-2 mm of inconsistency. Not adding bleeding space will result in a thin white border around your artwork. To rectify this, create a bleed or extra space of 5 mm around your image, so even if the paper moves, there won’t be any white space on the print. Printing in RGB If you’re wondering why your print doesn't match the colors on the screen, it may be because you are printing in RGB color mode. Artworks and documents set in RGB are meant for digital viewing, whereas those set in CMYK are meant for print. To avoid this error, ensure that the color mode of your design is set to CMYK. Typos and errors Grammar, spelling mistakes, missing fonts, and smaller font sizes can hurt your print’s appearance. Documents with these errors can appear unprofessional or even illegible. To avoid this, set the smallest font size of the document to at least 6 pt. You can rasterize or convert your text to a Smart Object, if you are using Photoshop, or to outlines, if you are using Illustrator. Proofread your document several times. You can even ask a friend to do it for you, or use an online spell check program to avoid any spelling mistakes and grammatical errors. High ink coverage Images that require too much ink to print can cause the paper to bruise or wrinkle since the paper’s ink absorption capacity is limited. Avoid this mistake by using a preflight tool to check the ink coverage of your artwork. This tool checks which images require too much ink to print, so they can be edited accordingly. You can also opt for preflight tools that are specially designed for lowering the ink coverage of an image. It's important to remember that there is always space to make edits while printing. Double check your work before printing or sending them to a printing shop to get the best quality prints each time.

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5 common shipping mistakes to avoid

Businesses that rely heavily on shipping must steer clear of shipping mistakes as much as possible. Just a minor slip-up can cost a company a lot of money, cause it to lose customers, and lead to unnecessary problems. There are many common shipping mistakes, and since most of these are irreversible, it is best to double-check whether they have been avoided before the load has been sent to the customer's address. Not using pallets A pallet is the best tool businesses can use when shipping goods to different places around town. It is a flat wooden piece that stores multiple shipping packages. So, when it is time to move the packages, one only has to move the pallet. This significantly reduces the risk of anything getting damaged during the trip. It is also simpler to move a pallet than using a forklift or a pallet jack to move individual packages. Moreover, palletizing the goods prevents them from colliding with each other and getting damaged. Giving an incorrect address Dealing with numerous packages is difficult, especially during crunch time. In such moments, one may make the simple mistake of listing an incorrect address on a box, which can cost the business significantly. If the product goes to the incorrect address, the customer who was meant to receive it will get it much later, causing the business to lose that contact. Plus, re-shipping that package to the correct address will cost the company a lot of money. To prevent this, it is best to double-check the addresses on the boxes before sending them for shipping. Labeling products incorrectly Incorrect labeling is another mistake that could stop the packages from being shipped to the right address and cost the company a lot of money. Further, if the package contains fragile items but its label does not say so, they could get damaged because of poor handling. These simple errors could be avoided by double-checking the goods before packing and sticking the right labels. Relying on just one carrier Businesses often make the mistake of depending on just one freight carrier for all their shipments. They think they do not need a new partner because the current one will always be available. But that may not always be the case. If the carrier gets pre-booked somewhere else, the business could fall behind on its shipping deadlines. And it is not easy to get another carrier on an immediate basis. Moreover, if the current carrier faces an unfortunate issue like an accident, the business would be left without a shipping partner. So, it is best to have a backup. Not having freight insurance Every business that relies on shipping should have freight insurance. The business may face massive financial loss if its packages get damaged or lost during shipping and it does not have a policy. Freight insurance is especially necessary if the packages are shipped over long distances. The further the address, the higher the chances of the packages being damaged along the way. 

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