Specialization and Strategic Use of Factoring Funds
The trucking and logistics industry can be as diverse as it is broad. Fleets can include anywhere from a few trucks to a fleet of 25+, and it is one of the most challenging industries to enter. However, it is also one of the most consistent and potentially profitable businesses to build. And as with most business, the effort takes capital and that capital will be a constant. Before we discuss the potential for financing, factoring and leveraging interest rates, let’s look at the challenges and consider how to address them through focus and smart strategies.
We know that the industry is constantly challenged by a pay to deliver business model. Cash flow is a constant concern and challenge. We also know that there are easy ways to address that challenge in the form of factoring solutions and other financing options. However, the most concerning challenge facing the industry today continues to be driver retention. For that, there are no easy solutions. Companies are not necessarily worried about filling the back of the truck as much as they are worried about filling the driver’s seat. Driver recruitment has become a priority for fleet owners and managers alike because if they can’t fill the driver seat, they can’t collect on the delivery. Recent activity has shown that there are very specific actions that companies are taking that are working.
Successful Strategies to Retain Drivers and Grow Fleets
1. Meet them where they are: It is not just a “good ol’ boys” industry anymore. These potential hires are active on social media just like any other industry. They use Facebook and Instagram, and they rely on their mobile devices for connection and efficiencies.
2. They care about culture: The freedom of a flexible driving schedule is not enough to retain a driver these days. They care about more. These potential hires or current younger drivers have a sense of purpose and balance. They want a fair paycheck, but they want even better benefits. Most importantly, they want to work for a company that cares about the big picture, is consistent in their communications and actions and is focused in every aspect of business.
3. Specialize: By bringing focuses to the business model companies are not only streamlining the delivery, they are simplifying the message. They don’t just want to be everything for everybody. They want to deliver a consistent product and message.
At the 14th Annual Recruitment and Retention Conference, representatives from 150 fleets worldwide learned a plethora of new things – but the thing that stood out was specialization. The simple act of focusing the business from the load content to the message was a successful strategy for filling trucks. It was also a successful strategy for retaining drivers as well as maintaining a healthy culture. A healthy and positive culture attracts drivers as well, and all of it means fleet growth. While there are carriers that can be everything to everybody like a Walmart, fleets were finding that choosing dedicated cargo allowed for more focus and better ability to keep loads filled and trucks on the road. This kind of strategy transitions over to the entire business operations. It lends consistency and balance which, in turn, keeps the drivers and the employees focused, secure and content.
While a healthy culture is critical in growing business, so too is a healthy financial position and many fleets have realized that factoring is one of the best solutions when you can take advantage of healthy rates. Fleets are using factoring to increase cash-flow. Cash-flow generated from a reliable and reputable factoring agreement can be used for everything from inventory and new equipment to expanding the operations in infrastructure and staff. Factoring makes it possible to offer the robust employment packages that drivers are looking for today. While offering the ability to grow your human resources, factoring solutions can simultaneously enable the infrastructure that a healthy culture requires. There are factoring solutions that can meet all company needs. That is what is most compelling. A smaller fleet can choose to factor all of their invoices in order to have the cash-flow they need in for any expense. Other companies might choose to sell only the invoice for customers that take the longest time to pay. In order to get the most out of your factoring solution, it is important to choose an experienced and reputable factoring company that will offer flexible options like these, and even more important to choose a factoring company that is familiar with the specific industry. FleetOne Factoring offers expertise in these financial solutions as well as an intimate understanding of the trucking industry and fleet needs.
In a nut shell, factoring is not just about the ability to make a payment to a vendor. Factoring provides the cash-flow necessary to pay for any and all expenses related to the business. Factoring can provide not just money but the confidence to make strategic decision without delay which mean expanding faster and smarter.