We live in an economy today that is very different from those of years gone by. Technology has made it possible for consumers in almost any location to buy products from retailers in almost any other location, with minimal costs to both.
In this heavily electronic society, then, it’s easy to lose track of the importance of physical movement of goods. When we order from our phone on one day and the item shows up on our front porch the next, it seems like everything happens in some magical electronic place.
But the reality is that even if we don’t have to drive to the store to buy an item that was also driven to the store, there is still a lot of transportation going on in the world today. The trucking industry remains vital to the movement of raw materials to points of manufacture and then the transportation of finished products to their point of consumption, either to a retail facility or directly to the consumer.
For that reason, a healthy trucking industry is not only vital to a healthy economy, it’s also an indicator of a healthy economy. Trucking companies that can find a way to stay profitable in all kinds of economic situations will not only survive downturns but will also help drive the overall recovery. It’s much like investors who choose precious metals as a tool to weather rough economic times.
Striking that balance of profitability hinges largely on timely receipt of invoice payments, a longtime foe of every business. When a load is delivered, the trucking company is on the hook for the fuel and labor required to that point, and they probably have between two and five weeks to pay for those costs without paying interest.
TBS Factoring is a leading developer of one particular tool, known as freight factoring. It’s very simple: the trucking company sends its invoices to TBS, which pays the company and the bills the actual customer. TBS keeps a small percentage for their work and the company gets paid immediately; everybody wins. The trucking company is able to stay current on its own payables, making it possible for them to take on additional freight. On top of that, they’re freed up from the arduous billing and collection process, reducing their overhead enough to help cover the factoring fees.
But it goes beyond the trucking company. When those firms can stay solvent by getting their invoices paid on time, they’re able to negotiate more successfully with would-be shippers. That’s because they know that they’ll be paid for the shipments.
When the shipper knows that the trucking company will give them a good price, it’s easier to lower shipping charges for the final consumer, making it easier to get that ever-elusive sale made. A sale made is a boost to the economy, and the impact just expands from there.
Of course, a lot of other elements have helped fuel the success of the trucking industry. The last drastic oil price spike largely coincided with the rapid growth of GPS technology. As a result, trucking companies were more able to plan routes accurately and reduce their fuel consumption by avoiding construction, traffic, and other slowdowns. Companies making local deliveries turned GPS into a precision instrument for optimizing daily routes.
For decades, trucking has been a vital part of the economy, both in a direct role as an employer and as a key cog in the movement of goods for customers. The ability to keep costs low and accuracy high in the trucking business reduces costs to producers and allows them to be more competitive for the final consumer, keeping the products flowing and the economy moving. A lean, efficient trucking industry is able to provide a real economic spark.
Photo Credit: altheengineer