The Crisis on Wall Street Also Hurts Truckers

Although many may not see the connection, wall street has a huge impact on the trucking industry. As the meltdown continues with some of the nation’s oldest and most respected financial institutions, the overall credit crisis is placing a strangle hold on many truckers’ ability to obtain a loan for fleet expansion or operating capital. The macro economy generally affects the amount of freight being shipped and the rate paid to move the freight.

With the U.S. economy struggling the way it is, many analysts were calling for an interest rate cut by the Fed at the Federal Open Market Committee meeting held earlier today. However, their calls for a rate cut did not result in a cut, as the Fed held rates steady at 2% on the Federal Funds rate. It needs to be pointed out, however, that even with rate cuts and the liquidity pumped into the credit market by the Fed over the past few days, many trucking operators will still continue to struggle getting financing. Many banks have a significant number of bad loans in their portfolios to clean up before they are comfortable extending new loans.

On the flip side, the current decline in oil and fuel prices should come as welcome relief to the trucking industry, as operating margins should start to improve. Fuel surcharges rarely cover the true cost of fuel and high fuel prices squeeze the margins of trucking companies.

In summary, the overall economy impacts fleet operators by limiting the availability of credit and impacting the number of loads available to haul. Trucking operators with good credit are no exception. The trucking industry will continue to be under immense pressure until consumer spending picks up and the construction industry sees a recovery.

Factoring Can Help Truckers Affected By Recession

It is no secret that the U.S. economy is struggling, with many experts stating that we are in a recession. A majority of trucking owners that I know would concur that, at worst, it feels like we are in a recession. As the economy limps along, so goes the trucking industry. There is less freight to move, fuel prices are high, and the price pressure on the truckers makes it very difficult to be profitable in the trucking industry.

Invoice factoring, or freight bill factoring, is one way to help fight through the tough economic times. As I have discussed in previous blog posts, factoring can provide business owners with the cash they need to pay for fuel, cover payroll, take advantage of supplier discounts and reestablish a solid credit score. by accelerating your cash flow, you are in better position to meet the daily demands of your business. Even in a slow economy, factoring gives you the ability to better control your cash and more closely monitor your financial health.

As many trucking operators struggle to obtain financing, they would be wise to consider factoring as the way to stabilize their trucking company’s finances. Managing a trucking operating is one of the most challenging jobs out there, and using effective financial services like invoice factoring is one of the best ways to help fight through recessionary times.