Transportation Industry Impact and Statistics
With continued growth predicted for the Freight, Trucking and Transportation Industries, their combined impact is quite staggering. U.S. trucking companies and warehouses in the private sector have an estimated 8.9 million people employed in trucking related jobs with nearly 3.5 million of those as truck drivers. A report recently released by the Forecast, a collaboration between ATA and IHS Global Insight, projects a 28.6% increase in freight tonnage and an increase in freight revenues of 74.5% to $1.52 trillion by 2026.
The American Trucking Association estimates there are 1.2 million trucking companies in the U.S. Of those:
90.2% operate 6 or fewer trucks
97.2% operate fewer than 20 trucks
With the vast majority of trucking companies in the transportation industry operating with less than 20 trucks and an estimated 90.2% operating 6 or fewer trucks there stands a good chance that many of these smaller companies are not in a position to qualify for bank loans or carry their accounts receivable for an extended period of time.
How can Invoice Factoring serve as commercial financing for the Transportation Industry?
As discussed in What is Factoring, the options for bank financing based on a small business or owner operated business may be extremely restrictive in the current economic climate. Working capital financing is notoriously difficult to attract within the transportation industry.
Added to the restrictions for financing is the fact that the Transportation Industry depends on a number of “get paid when paid” steps throughout the shipping process. The chain of one person or company having to be paid before the next service provider or company can be paid can extend payment deadlines and negatively impact cash flow and working capital.
Factoring as commercial financing can be the difference between having liquid, available cash flow to sustain and grow business, or being restricted and choked by a slow return of profits. It is difficult to pay for fuel at the pump while waiting for payment on a load hauled weeks ago. Unlocking your largest asset, your accounts receivable, is the key to unlocking the potential of your business.
Contact us today to see how we can help your Transportation Industry business.
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