Marketing your freight brokerage isn’t just about calling strangers and hoping they say yes.

‍

Freight brokerages miss out on new customers when they don't market their services. Your ideal clients can’t do business with you if they don’t know you exist. 

‍

You need to do something beyond cold-calling people. 

‍

Shippers get spammed with cold calls and emails every day, so you must do something different to stand out in the crowd. This is especially true in a down economy. 

‍

Some dislike the idea of freight broker marketing. They mistakenly think it’s simply “posting on social media” or buying a billboard and are convinced it won’t work for them. They prefer calls because it feels more personable. The problem with this logic is that it dehumanizes the best aspects of marketing. After all, people are loyal to people. Marketing your team and offerings could win you more referral business from someone simply hearing of you and referring a friend.

‍

In this guide, we’ll stay away from cliche marketing suggestions. We aren’t going to tell you to post on Instagram - much less TikTok. Instead, we’re covering 8 Ways to Market Your Freight Brokerage (with real examples) that help you stand out from the crowd without wasting your time.

‍

Key Takeaways: 

• LinkedIn is a powerful platform for research, networking, relationship-building, and personal brand development.
• Utilize Facebook Groups and events to network, engage in non-sales conversations, and establish a referral network.
• Prioritize establishing a brand  presence and revenue before investing in Google or Facebook ads, as they require time, expertise, and software for effective ROI tracking.

‍

1. Search for companies nearby on Google Maps & Google Earth.

‍

In the early days of the internet (and before), the Yellow Pages were the go-to resource for identifying companies within industries and by region. Nowadays, most brokers use Google Maps & Google Earth to scout for shipper leads for freight brokers. 

‍

“Look for big shipping buildings with lots of bay doors for trucks. This means lots of shipments coming in and out,” says Brandon Caldwell, former freight broker of 10 years and current Enterprise Account Executive at Denim.

‍

Let’s say you’re searching for prospects in Charleson, SC. You might search for something like “shipping companies in Charleston, SC.” This shows a list of companies - some relevant - some not. In this example, we came across, “Carver Maritime.” A quick look around on street view shows plenty of places for freight to be moved. Looking at the image we’ve shared, you’ll see cranes in the parking lot and a gate that allows trucks to enter. 

‍

While we ask you not to spam Carver Maritime, you can absolutely use this strategy for logistics cold calls and promote your freight services.

‍

2. Try LinkedIn Prospecting (what Yellow Pages should have become)

‍

Former freight brokers on our team speak highly about the power of LinkedIn for prospecting. It’s the best site for connecting with potential clients across most industries. Beyond that, it’s a great place to build relationships and a personal brand.

‍

There are 5 things we recommend for success on LinkedIn:

‍

Using LinkedIn as a research tool. 

‍

For example, you can use Sales Navigator to identify shipping managers and leverage their profiles to find commonalities to build relationships. (ie: We both graduated from University of Texas - hook’em horns!).

‍

Follow a freight broker script that isn’t too sales-focused. 

‍

HubSpot, a top provider of business & sales software, provides eleven great sales script examples here to get you. We suggest leading with the “I feel your pain” summary. 

‍

Here's the template:

‍

[One- to two-sentence description of common prospect problem.]

‍

But what if [key result of using your product]? In the past X years, I’ve helped Y [vertical/sector] businesses [accomplish X results] by [short description of product features]. [One- to two-sentence description of results.]

‍

[Call to action.]

‍

Here’s an example:

Delivering freight to customers on time is more difficult than ever. It can be hard to know what carriers to call, much less how to know if you’re getting a good deal.

‍

But what if it were possible to confidently deliver freight on time without finding the drivers yourself? In the past ten years, I’ve helped 100s of shippers deliver their unique products without the stress of finding a carrier network. This has resulted in 15,632 loads delivered on time without fail. Needless to say, all of my customers are very satisfied.

‍

Wondering what this could look like for your business? Give us a call at 555-555-5555 and ask for a free quote today. 

‍

Comment and reshare prospects content. 

‍

Get top of mind by engaging with prospects' posts via comments and resharing any interesting content they produce. Have non-sales-related conversations. You can do this with posts in your feed, in relevant groups, or by following relevant hashtags and responding to trending posts. The key is to keep your responses authentic and not make them salesy. 

‍

Comment on influencer posts.

‍

Identify influencers in the space and comment to get exposure for your personal brand. This is a lot easier than just posting yourself because these people already have an audience of prospects who are relevant to you. Being where their attention already means getting exposure simply by participating in the conversation.

‍

Commit to consistent posting.

‍

We view posting on LInkedIn 2-3x a week as a long-term brand-building play. Don’t go crazy, and try posting to every platform daily. But posting regularly on LinkedIn will expand your reach and build an audience. Becoming a thought-leader helps to build trust with your audience. This leads to a situation where you’ll have more prospects seeking you out vs you having to call after then. This is the ideal situation because it reduces the burden of outbound calling on your team.

‍

3. Join Facebook Groups

‍

For the past few years, Facebook’s parent company, Meta, has placed a large emphasis on engaging with people through Facebook Groups. A quick search of groups on Facebook shows several large and potentially interesting groups with a high volume of activity.

‍

Most groups do not allow self-promotion. Instead, you'll need to spend some time providing actual value to the group. Ask questions, be friendly, answer questions helpfully, and share valuable insights. You can also share articles and discuss industry news. Sure, it might feel like a long way off from reaching a sale, but offering value creates a stronger foundation for building your brand and trust with the community members. Your potential customers will remember you and like you more if you can offer them something that benefits them instead of jumping straight into dealmaking.

‍

Some groups do offer one day per week where you can self-promote. Also, you’re usually allowed to respond to someone if they ask for the type of service you provide. Strike when the iron is hot and use those opportunities to move the conversation forward to a call or direct message. The key here is not to be spammy.

‍

Pro tip: Don’t copy/paste the same message into multiple different groups. Most social media platforms will flag this and prevent you from posting or shadowban you.

‍

4. Referrals / Networking / Word of Mouth

‍

Networking for referrals is one of the most effective ways to promote your business. This is not a new concept. However, we wanted to talk about how to do it successfully. 

‍

Networking is largely done at  live events to promote your business without feeling sals-y. It makes a big difference and you can feel the energy in person. We all hate when someone talks ‘at’ us. Most people zone out. But if someone tries to get to know what we do, we’re much more likely to reciprocate. 

‍

If you attend events, try getting to know what services others are offering and offer to refer to them if you know anyone. Usually, people will reciprocate this offer. Since referrals close at a significantly higher rate than cold calls. Thus, referrals will be a lucrative income stream and is where many brokers just starting out get their early business. Referral expert and  Denim’s Head of Partnerships, Jamie Neely, also had this to say:

‍

1. Do your research on which events align with your target audience. Will your potential customers be exhibiting, or will they be attendees?
2. Invest in a booth setup that draws in potential customers by offering them a sneak peek into your business, but that also pulls them in with activities they might be interested in.
3. Attend as many planned after-hour events that other sponsors might be putting on if you can’t afford to host one yourself, or ask around and see if you can co-host.
4. Investigate the different speaking opportunities that a conference might be hosting, and join a panel to offer your insights.

‍

We spoke to Briana Lupinaccio, VP of Revenue at Roadly Logistics, to get her advice on networking at industry events. “Trade shows are an opportunity for our team to meet with shippers face-to-face and explain what we can do for them. Connections we make at trade shows are high converters and lead to long relationships.” 

‍

Some events freight brokers should consider attending are:

1. AirCargo Conference
2. Manifest
3. Promat
4. Freightwaves Future of Supply Chain
5. ParcelForum

‍

While this list isn’t comprehensive, it’s a great place to begin implementing the advice above so you can start to meet with potential clients. What are your favorite industry events to attend?

‍

5. ImportYeti (free international shipping insights)

‍

For those looking for an automated way to prospect for companies that handle international shipments, try a service like ImportYeti. It’s free and shows how many shipping containers each company brings into the US monthly. Let’s say you're curious about the companies Target works with in the United States. Simply sign up for a free account and search for Target. Then, you can reach out to suppliers and offer your services. 

‍

6. Data Axle (or anywhere you can buy a  list of your target audience)

‍

Formerly Sales Genie, Data Axle allows you to buy a list of prospects for cold outreach. Building a list of prospects is super important. Especially if you’ve reached the point where you can hire some people to make cold calls for your brokerage. “We used this at Worldwide Express,” said Lexi Farris, a former freight broker on our team who used this at the large 3PL she worked for previously. 

‍

This isn’t the only company that provides this service. There are a lot of places that are willing to sell you a prospect list. The hardest thing to know in advance is the quality of the prospects. They might have great quality info for one industry but very little on another.

‍

7. Google Ads (more commonly used by larger brokers and 3PLs)

‍

We’ve seen more people talking about Google ads lately. They’re asking questions like, “‘Are Google ads worth the spend?’ and ‘Should I be using Google ads?’” You usually see these questions pop up every few months on r/freightbrokers. 

‍

Most businesses don’t leverage Google ads until they reach a monthly six-figure revenue level. It can take time to make a profit from paid ads. 

‍

According to performance marketing expert  Travis Vaught, Demand Generation Manager at Denim, “Most businesses won’t see ROI for at least six months when starting paid ads. You need to be in a place where you can comfortably spend money on advertising without an immediate return on investment.” 

‍

When you start using Google ads, you’ll want to target three things with your Search Campaigns:

1. Branded search terms (like the name of your business). This helps you show up when people Google your business name.
2. Competitor search terms (imagine if someone heard of you when searching for your biggest rival). You benefit from being in consideration when someone searches for a competitor.
3. Long-tail keywords (these typically have a clear intent to them). Imagine if you could get in front of someone searching for the exact service you provide in the exact location you provide it. 

‍

If you’re just starting out, it can be hard to tell if someone called your business from ads vs just a regular organic search. This is important to know because this makes your ROI from marketing difficult to measure. You’ll need software to help with this, which is why we recommend waiting if you haven’t made your first six figures yet.  If you’re just starting out, don't run Google ads yet. 

‍

But if you are ready, some of the benefits are:

• Demand Capture. If someone is actively searching for something like “Freight Broker Near Me,” this is an opportunity to close a prospect who is ready for your services.
• Brand Awareness. Google Ads, especially Google Display & YouTube ads, are a great way to get the word out about your services on sites and videos your prospects frequent.

‍

8. Facebook Ads (more commonly used by larger brokers and 3PLs)

‍

Similarly to Google ads, you don’t really need to try your hand at Facebook ads until you have an established business and confidently understand your target market. Any type of paid advertising can get expensive quickly, and it can take a long time before a business gets good at it. 

‍

Now, when Facebook ads work, they work super well. Travis Vaught says, “Facebook Ads are great for building awareness and freight broker lead generation to call and email. You’ll need people to create the content you’re promoting, though, so many businesses who are new to ads will start with an ad agency since they can provide the graphic design and copywriting services you might not have in-house.”

‍

Similarly to Google Ads, You’ll need software to help with this, which is why we recommend waiting if you haven’t made your first six figures.  If you’re just starting out, don't run Facebook ads. But if you are ready, some of the benefits are:

• Demand Generation. Facebook & Instagram help you to get content in front of prospects cheaply. This is important because most of your future customers don’t need your services today, but will in the future. Thus, if you add value to their lives now (in the form of useful blog and video content), they’ll remember you when they’re ready for your service.
• Lead Capture. Facebook & Instagram are great places to get people’s contact information and grow your email list. Growing your email list of prospects gives you another point of contact with a prospect that isn’t dependent on your advertising budget.

‍

Conclusion

‍

What we’ve listed above are merely oversimplified marketing tactics. They’re great to know, but a lot goes into doing any of them well. You’ll likely hear of things like sales scripts, marketing funnels, etc. All of these are useful strategic things to know, but show yourself some grace if you are just starting to market your business. You’ll learn them with time. 

‍

In a general sense, we recommend your revenue determine what marketing strategies you should take

Revenue Per Year and Relevant Strategies

‍

$0 - $100k / year: You need to clearly define what you’re offering and know how to communicate it so well that a 4th grader can understand. Next, you want to set up some basics like a website, a LinkedIn profile & page, and a Facebook profile and page. They are necessary so people can tell you’re a real business. Also, we recommend you niche down as early as possible. Don’t fall into the trap of pretending to help everyone. That means you won’t be top of mind for anyone. But if you specialize in Reefer shipments, when someone needs that, they’ll come to you.

‍

$100k - $1 million / year: By this point, it’s time to make your first few hires (be they freelancers, accounting help, etc). You’re learning to do business differently, and this applies to your marketing as well. Ideally, you can hire someone to help make sales calls (or multiple someones). If possible, it could be worth your time to hire a freelancer to create content for your website and social media profiles so people know you exist. Many early-stage brokers neglect the power of marketing on social media which will set you apart. Plus, updating your website regularly will help you appear on search engines.

‍

$1 million - $10 million+  / year: This is where things get tricky, and there stops being a one-size-fits-all marketing strategy. By now, hopefully, you’re learning how to hire and fire correctly while avoiding micromanagement. You should absolutely be building an email list of inbound leads to alleviate some of the pressure on your sales team. In the earlier stages of this range, you could consider hiring a marketing agency to help with Google & Facebook ads (though be very intentional about how much you’re willing to spend here). A good agency will get to know your business and can show you realistic ROI for your investment. Once you get beyond the $10 million mark, trust the talent you’ve brought in to steer you in the right direction.

‍

The Number #1 Challenge You’ll Face (and How Denim can help). 

‍

The biggest problem you’re going to face is cash flow. Most of your clients won’t pay right away, but usually, carriers expect to be paid quickly (especially the good ones). That’s why you’ll need a Freight Payment System that allows you to pay shippers however you want while also giving you access to factoring and line of credit services. That’s where we come in. If you’re interested in how Denim can help you grow your business quickly and safely, schedule a demo now.

‍

The flatness of the last quarter might seem uneventful, but it's actually good news. Hitting a period of stability in a market fraught with volatility suggests that we might be at the lowest point in the market's recent downturn. And as the old saying goes, once you're at the bottom, there's only one direction left: up.

Key Takeaways: 

• The recent stagnation in the freight market is a positive sign of recovery after a turbulent year.
• Contract rates have slightly decreased, narrowing the gap between spot and contract rates, but still need to go down by 12%-15% before leveling off.
• Inflation has decreased, and consumer confidence is up, but the cost of living remains high, with food and energy prices significantly higher than last year.

Flat Freight Market is a Good Sign 

The freight market's recent stagnation may not immediately strike as positive, but it marks the first sign of recovery we've seen in a year. Although challenges persist, navigating a stable market is easier than a turbulent one.

Looking at outbound tender volumes, which refer to the number of freight loads available, there was a minor uptick in May. Despite holding steady throughout the quarter, these volumes were still somewhat higher than in 2019. While 2019 might not be an ideal reference point for normal because it was over four years ago, it can be considered a low-end expectation point. 

Over the last month, the Outbound Tender Reject Index experienced minimal movement, hovering around 3%. These rejection rates, albeit low, are insufficient to drive sustainable growth in spot rates. Flatbed trailers offer the greatest potential, reporting the highest rejection rates among all trailer types.

Last quarter also saw a slight decrease (2.4%) in contract rates, reducing the gap between spot and contract rates. Compared to the rate difference in 2019, contract rates still need to go down by 12%-15% before leveling off.

Diesel Fuel Prices are Going Down 

Truck drivers and fleets have been hit hard by the difficult conditions in the freight market. Many are losing money because of high operating costs and lower rates. But there's a glimmer of hope—diesel prices are decreasing, down nearly $2 from a year ago! Lower fuel costs are providing some much-needed relief.

‍

Correction in Inventory Surplus as Consumer Spending Recedes

Suppliers have mostly tackled last year's inventory surplus and no longer carry the burden of extensive, unsold stock. While this may initially paint a favorable picture for the freight market, consumer caution in spending on goods directly influences this scenario.

In a surprising change, inflation decreased from 6% to 4% between February and May. At the same time, consumer confidence is now higher than it has been since January 2022. Yet, despite these optimistic signs, consumers continue to grapple with a high cost of living, evident in food prices up 6% and energy prices up 11% compared to last year.

For increased consumer goods spending - and, by extension, the freight industry - wage growth must outpace inflation. As consumers opt to spend more on services instead of goods over the summer, the freight demand could face a slowdown. 

The job market is causing concerns as unemployment rose to 3.7% in May, and jobless claims reached their highest level in almost two years. As we enter the third quarter of 2023, there is a growing gap between lost jobs and the ones available. This mismatch in the labor market may lead to a decrease in demand for freight and goods in the second half of the year.

The resumption of student loan payments after 39 months of deferral will come as a shock to most households. A sudden increase of hundreds of dollars per month will force consumers aged 18-44 years old to cut back on discretionary spending. Since portions of this demographic have a tendency to prioritize experiences over goods consumption, we can expect this will produce a small to moderate headwind heading into back to school and holiday spending.

‍

More of the Same in the Second Half of 2023

The second quarter of 2023 managed to maintain a steady pace, a silver lining in our current freight market landscape that continues to grapple with oversupply and underwhelming demand. 

Carriers are in a tight spot, with rates skirting below the breakeven point, making the spot market highly reactive to even slight disruptions in capacity. This situation challenges smaller carriers, who find covering costs a tough task. Lower diesel prices provide some relief, but it may not be enough to prevent smaller carriers from exiting the market.

Historically, freight demand tends to cool down in July, but the market is straying from its usual course this year. Shippers have differing opinions regarding the outlook for the remainder of the year.

According to some experts in the industry, if there are no unexpected changes in demand, the market has already gone through the worst and is expected to recover in the second half of the year.

For now, however, it's reasonable to anticipate a continuation of the status quo, with supply outpacing demand, until our key indicators, such as the Outbound Tender Reject Index and the contract-spot rate spread, signal a significant shift in the market. Vigilance and adaptability remain our best allies in this dynamic environment.

‍

Cleveland, Ohio recently hosted the FreightWaves, Future of Supply Chain (FOSC) conference. This much-anticipated event brought together a cross-section of logistics professionals, all keen to explore the changing terrain of the freight industry. 

‍

Denim was one of 24 technology innovators attending FOSC giving demonstrations on their software and services. We had the privilege of interacting with freight and logistics leaders and influencers who provided incredible insights into their operations approach, challenges, and the overall supply chain landscape.

‍

‍

In the current freight market, characterized by tight budgets and narrowing margins, the topic of investing in freight technology took center stage. The pivotal question on everyone's mind: is investing in freight technology a smart move right now? The answer, intriguingly, is a resounding "yes, but…". This nuanced response sparked extensive exploration into when and how freight technology plays a role in the industry this year.  

‍

Tech Talk: David Stone on the Role of Technology in Freight Brokerage

‍

The  FreightWaves, Future of Supply Chain opened with an enlightening Check Call interview with Mary O'Connell and David Stone from Ryder. David remarked that contrary to the common practice of cutting technology costs in a down market, investing in technology can be a game-changer. His golden rule for assessing technology stacks is simple - if technology can increase the efficiency of your staff, it justifies its price tag.

‍

David stressed the purpose of technology in freight brokering is to "remove non-value add tasks." For example, an agent manually entering data from your TMS to your factoring partner is not adding value to your customer. Technology can outsource these tasks to free up agents.

‍

A vital aspect David emphasized during the interview was the need to consult employees on which technologies are truly beneficial and which are no longer needed. He noted, "While every freight brokerage might have 14 - 20 technology licenses, they're not utilizing all of them." This observation suggests that leadership gains tremendously by connecting directly with ground-level agents, honing in on technologies that can eliminate tasks that don't bring additional value to their customers. 

‍

In closing, David's counsel for present-day freight brokers is critically evaluating potential technology partners. He urges them to come to product demos armed with specific issues and give consideration to partners who respond with authentic solutions rather than scripted answers. This approach underscores the importance of fostering a relationship based on transparency and true collaboration.

‍

Grading the Game Changers: A Fireside Chat on Digital Transformation

‍

The  FreightWaves, Future of Supply Chain saw an engaging discussion on the essential role of technology in freight operations between industry expert Craig Fuller and Peter Rentschler, CEO of technology consulting firm Metafora. In a unique approach, they graded each emerging technology sector on its implementation. Here's their verdict!

‍

Transportation Management Systems (TMS) barely scraped through with a C-, mainly attributed to inadequate training and haphazard implementation procedures. Peter emphasized the common mistake decision-makers make in selecting a TMS that fulfills rudimentary needs but needs to consider the distinct freight movements of each brokerage or company. He regularly suggests that his clients conduct a process map exercise to understand their unique workflow. Subsequently, they can customize the platform to optimize workflow with the fewest clicks possible. Peter asserts that this often overlooked, essential step could significantly boost operational efficiency.

‍

In stark contrast, digital freight matching platforms emerged as the toppers, earning an A. Their ability to assemble scattered data, structure it, and present it in a manner that provides actionable insights won them the top spot.

‍

The category with the most volatility was payments, characterized by swift changes and intricate dynamics. The payments field is wide, ranging from entities primarily focused on factoring fees to those delivering top-tier operational products embedded within these fees. Peter suggests the latter approach can provide freight brokers with a substantial competitive advantage. The grades in this category varied widely, reflecting the diversity of experiences among Peter's clients; some occasionally felt constrained by their payments platform due to strict factoring terms. Nevertheless, Peter praised certain high-performing entities that earned A grades for their commitment to empowering brokers, exhibiting an entrepreneurial zeal that aims for broker success.

‍

Brokerage BFFs: Technology and Operations

‍

‍

Zach Jecklin, the Chief Information Officer at Echo Global Logistics, and Jay Gustafson, the EVP of Brokerage Operations at Echo, openly discussed their strategic use of data to enhance customer service and fortify partnerships.

‍

Jay veered from industry norms in a sector typically resistant to embracing technology. He declared, "Technology and data have improved our staff's capabilities and accelerated their learning process." He highlighted a crucial turning point where, thanks to technology, his team shifted focus from routine tasks to building relationships.

‍

Zach and Jay delved into a critical debate in freight technology: the choice between building or buying. When contemplating purchasing, the Echo team places high importance on API access, which Zach credits for modernizing their technology stack. Echo also assesses whether the off-the-shelf technology resolves a specific problem. If it's a common industry challenge, they advise buying since there's likely a provider or several offering efficient solutions. However, the Echo team leans towards building their own solutions for unique internal or company-specific issues.

‍

FreightWaves Future of Supply Chain Summary

‍

FreightWaves Future of Supply Chain Conference emphasized how the right technology investments can distinguish between merely surviving and thriving in this market. While the industry has come a long way in embracing and leveraging technology, there is still an opportunity for further efficiencies and growth. 

‍

Through sessions and several discussions, it became clear that it's not enough just to have freight technology licenses anymore. Freight brokerages and logistics companies must develop detailed selection criteria and invest in implementation. Integrations and open APIs were the buzzwords of the conference. With the right partners, transparency, and a focus on implementation, the 'future of supply chain' has immense promise and potential.

‍

The FreightWaves Future of Supply Chain conference offered a glimpse into freight technology's current state and the industry's endless possibilities. We are truly thankful for the opportunity to connect with so many freight brokers and industry partners, each conversation a chance to delve deeper into the intricacies of the market. We are looking forward to the next big event - F3: The Future of Freight Fest in Chattanooga, until then.

‍

Our SmartPartner series highlights like-minded partners innovating for a more connected and transparent supply chain. This month we are thrilled to spotlight Turvo!

‍

To bring you an inside look into our partnership and the innovative solutions that Turvo offers, we connected with Jeff Graan, Vice President of Product Management and Innovation at Turvo. Jeff's extensive experience and successful track record in the logistics industry have been crucial in guiding Turvo's highly-regarded platform.

‍

‍

Before joining Turvo, Graan held senior leadership positions at MercuryGate and BluJay Solutions. He also led supply chain activities for world-renowned Fortune 500 companies, including Whirlpool and General Motors, while serving in prominent roles at Schneider National and Penske Logistics. His vast industry knowledge and pioneering vision shape Turvo's journey to reinvent the supply chain industry. 

‍

Here's what he had to share about Turvo, the Denim integration, and his advice for freight brokers in today's market.

‍

Q: What does Turvo offer today? 

‍

A: Since 2014, Turvo has been pioneering and developing a collaborative approach for the supply chain network. We aim to disrupt the industry with intuitive technologies that enhance end-to-end logistics communication and build efficiencies for our customers in the supply chain, one of the world's most vast and critical industries.

‍

Turvo offers the leading modern TMS solution for the supply chain industry. Our TMS runs on our unique Collaboration Cloud, which leverages the latest SaaS cloud technology. This sets Turvo apart from other logistics software options in the market. Our platform unifies supply chains, enabling real-time interactions and problem-solving. With Turvo, users can identify and address issues as they happen, ensuring smooth operations.

‍

‍

Our platform caters to the specific needs of brokers and 3PLs, empowering them to manage their entire freight business seamlessly, including:  

• Automate processes
• Set alerts
• Manage exceptions
• Interact directly with drivers, carriers, and customers 
• Provide 100% shared shipment visibility, giving customers real-time information and eliminating the need for constant check calls

‍

Turvo offers a comprehensive solution that optimizes supply chain management, enhances collaboration, and provides unparalleled visibility. With Turvo TMS and our Collaboration Cloud, we empower businesses to streamline operations, boost efficiency, and deliver superior customer service.

‍

Q: Why do freight professionals choose Turvo?

‍

A: Freight Professionals choose Turvo because we offer a modern TMS solution that addresses the evolving needs of the supply chain industry. Our comprehensive communication and analytics solution enables end-to-end management of freight processes.

‍

Here are the key reasons professionals gravitate toward our platform:

• Modern TMS solutions tailored to the evolving needs of the supply chain industry
• Comprehensive communication and analytics solution for end-to-end freight process management
• Enhanced collaboration and visibility capabilities that foster operational efficiency and productivity
• Ability to support business scalability
• Trustworthy platform known to streamline operations, improve efficiency, and stimulate growth

‍

But don't just take my word for it. Brittany Traylor, Founder and CEO of TraylorTranspo, shares her experience with Turvo:

"Our mission at TraylorTranspo is to build a fast-growth brokerage that benefits everyone in the supply chain. Whether it's a carrier's market or a shipper's market, our goal is to provide a tech-enabled logistics solution that hedges risks for all parties involved and grants all of our employees and customers higher service levels and better business opportunities. Turvo was the right TMS partner to help us achieve these goals and scale quickly without disrupting the business as we strive to reach the Fortune 500 list."

‍

Q: Why did you choose to partner with Denim? 

‍

A: Turvo has partnered with Denim to provide automated and simplified freight payments and financing for brokers.

‍

Scott Lang, Chairman and CEO of Turvo, mentioned: "The partnership brings a best-of-breed payment platform into our extensive partner and integration ecosystem and gives our broker customers another layer of automation and excellence in their back-office operations. The biggest gain for our customers is the experiences they can pass onto their customers and carrier networks."

‍

By integrating Denim's freight payment solutions into the Turvo platform, users can enjoy a seamless and streamlined experience. This collaboration enhances communication, simplifies payment processes, and improves overall efficiency within the supply chain industry. Ultimately, the Turvo-Denim partnership aims to deliver an enhanced and comprehensive solution that optimizes supply chain management and simplifies freight payment processes for customers.

‍

Q: What advice do you have for freight brokers? 

‍

A: Freight brokers looking to partner with technology providers need to align their choice with their future business objectives. More than just providing operational tools, the right technology partner can invigorate both internal and external teams, setting the stage for competitive advantage. While visibility remains key, real advancement comes from fostering a collaborative environment. Such strategic investments in forward-thinking technologies pave the way for sustainable success.

‍

Empower Your Freight Operations with Denim & Turvo

‍

Are you a Turvo client seeking to enhance your payment infrastructure? Or you're a Denim customer searching for a TMS solution that aligns with your business needs. Regardless, the Turvo-Denim integration provides an all-encompassing, innovative solution capable of transforming your operations and setting you on the path to success.

‍

Don't hesitate to contact us today to discover more about how the Turvo-Denim integration can elevate your brokerage and give you a competitive edge.

Cleveland is home to the Rock and Roll Hall of Fame and host of the upcoming FreightWaves Future of Supply Chain. The two-day event starts on June 21st with a packed agenda of engaging discussions, rapid-fire demos, and hands-on learning experiences. 

‍

To help you prepare your schedule, we have curated a list of five key sessions that are unmissable:

‍

1. How Tech and Operations Can Best Collaborate

‍

In this fireside chat, Zach Jecklin and Jay Gustafson of Echo Global Logistics demonstrate the potential of data science to transform operations, bolster customer service, and fortify partnerships. Echo's journey offers a roadmap for other companies looking to leverage technology in their digital transformation journey.

‍

2. VC Trends and the Supply Chain Tech of the Future

‍

Pat Martin from Venture 53 offers a fresh perspective on emerging trends in freight tech. His insights into the metrics investors value most and the state of the capital market environment are essential knowledge for seasoned industry professionals and those just embarking on their careers.

‍

3. Digital Transformation Trends in the Industry

‍

FreightWaves founder and CEO Craig Fuller and Peter Rentschler, CEO of Metafora, delve into the pivotal role of modern integrations and connectivity in our industry. Learn how the leaders in transportation are using technology to break down silos and foster stronger connections with customers and partners.

‍

4. Transforming Complexity

‍

Leveraging Data and AI for Optimal Global Supply Chains: Charles Odom of Halliburton guides us through global logistics, demonstrating how Halliburton is harnessing data analytics and AI to revolutionize its operations, enhance efficiency, and drive industry innovation.

‍

5. Navigating the Current Freight Market

‍

Join Bart de Muynck of Project44 and Craig Fuller from FreightWaves as they discuss the volatile nature of freight markets and the importance of real-time data. Learn how the industry's top organizations are becoming more responsive and resilient in the face of change.

‍

These sessions offer practical, actionable strategies to keep pace with the rapidly evolving landscape shaped by digital transformation. With a keen emphasis on data, technology, and the digital shift, we are confident that you will depart equipped with vital knowledge to propel your organization forward.

‍

However, this event extends beyond being a mere learning opportunity. It's an opportunity to network with industry experts, seek solutions to your pain points, and draw inspiration from shared success stories. 

‍

Join us at booth C314 where the Denim team is ready to discuss freight technology stacks, digital payments, flexible factoring to SmartBroker, and more.

‍

At our booth, you can expect:

• Demonstrations of our latest features, such as 1-click document collection and early invoicing. Experience our practical solutions firsthand.
• An opportunity to meet our long-time client, Shay Lynn-Dixon, from SCALE Logistics. Hear their successful journey directly from them.
• A friendly game of Putterball. Come and give it your best shot!

‍

We look forward to meeting you, and Go Browns!

‍

‍

Game Changers in Freight Tech is a unique opportunity to see the latest advancements and technology transforming the freight and logistics industry. It's not just about hearing about these changes—it's about seeing them in action, understanding how they work, and envisioning how they could be helpful to your operations.

‍

Hosted by Chris Arredondo of Cargo Chief, this free virtual event spans two days and features insightful panels and demos. It's a chance to delve into cutting-edge technologies and creative solutions that streamline logistics processes, optimize operations, and enhance supply chain management.

‍

The event features keynote speakers Anne Reinke, President of TIA, and Charlie Saffro, CEO of CS Recruiting. Their insights and experiences promise to provide valuable perspectives on freight technology's current state and future direction. They'll share their knowledge, predictions, and advice for navigating this rapidly changing industry.

‍

The event's agenda features industry leaders, entrepreneurs, and experts driving change in the freight tech space. Panel discussions include:

• Fortifying Resilience: Preparing for Challenges with Technology as Your Ally
• The Partner Puzzle: How to Evaluate and Compare Tech Partners Effectively
• Breaking the Plateau: Maintaining Momentum for Continuous Growth
• Beyond Price: Unraveling the Value Differentiation of Tech Partners
• Overcoming User Hesitations: Removing Barriers to Influence Product Adoption

‍

We're particularly excited to announce that our very own Parker Caldwell and Ben Jones will be part of the event, showcasing the capabilities of Denim. On Thursday at 2:50 pm EST, they will give attendees a demonstration of the Denim dashboard. They'll show how its functionality can save your brokerage time and money through smart automation and flexible factoring. Plus, they'll give a first look at our newest feature: Document Collection.

‍

Additionally, Ben will participate in the panel discussion on 'Overcoming User Hesitations: Removing Barriers to Influence Product Adoption,' scheduled for Thursday at 3:05 pm EST.

The "Game Changers in Freight Tech" event is more than a conference. It's a chance to witness firsthand the impact of technology on the freight industry. It's an opportunity to learn from the best in the business and to gain insights that could shape the future of your operations.

‍

So, take advantage of this opportunity. Join us and the rest of the industry's game-changers as we explore the future of freight technology together. Whether you're an industry veteran or a scaling brokerage, this event promises to be insightful and full of ideas you can take back to your organization.

‍

Get your free ticket today to the Game Changers in Freight Tech Showcase.

By: Sean Smith, Head of Product at Denim

‍

I was honored to attend the renowned 51st Annual J.P. Morgan Global Technology, Media, and Communications Conference in Boston, Massachusetts. This landmark event saw an impressive lineup of established industry leaders and emerging high-growth companies discussing game-changing strategies, technologies, and trends in the digital payments landscape.

‍

I aimed to understand and learn new solutions and trends leveraged by key industry players and pinpoint opportunities that could enhance our freight payment platform for the freight industry.

‍

Here are some insights and key learnings taken from the conference.

‍

FIS: A Beacon of Positivity

‍

FIS, a leading global technology solutions provider for merchants, banks, and capital market firms, brought a refreshing perspective to the conference. 

‍

FIS CEO Stephanie Ferris directly challenged the often negative sentiment in the news. Contrary to the prevailing "gloom and doom" outlook, Ferris found the feeling among bankers to be exceptionally positive. "Last week was the FIS user conference, and I was concerned that everyone would be very negative. However, the sentiment among these bankers is extremely positive and not the gloom and doom you hear on Bloomberg daily," Ferris shared. 

‍

Her report of increased net deposits across the institutions FIS supports underscored this unexpected positivity, demonstrating the banking industry's resilience in the face of uncertainties and challenges.

‍

LendingTree: The Importance of Customer Engagement

‍

LendingTree's panel discussion emphasized the critical role of product and user experience in financial services. 

‍

The company, renowned for its online lending marketplace, pointed out the importance of offering customers more than just financial transactions. Through practices such as providing tips on the impact of balance payments on credit scores, LendingTree significantly improved customer engagement. 

‍

Furthermore, LendingTree's focus on enhancing customers' credit mix and stimulating their engagement highlights a proactive approach to improving customer satisfaction and trust. It emphasizes the value of innovative engagement strategies in developing loyal and satisfied customers in the financial services sector.

‍

Bill.com: Payments Simplified

‍

Another notable session was with Bill.com, a leading provider of cloud-based software that simplifies, digitizes, and automates complex back-office financial operations for small and midsize businesses. The company sees itself as a pioneering player in the payment space in the same way ADP revolutionized the payroll industry. 

‍

Bill.com's strategy targets accountants and finance professionals, recognizing their influence within businesses. By focusing on high trust champions, Bill.com experienced its most successful quarter in new user acquisition, with most referrals coming from other trusted financial institutions.

‍

Looking ahead, Bill.com plans to offer a comprehensive payment solution that includes international and instant payment services. Their future growth strategy also aims to broaden accountants' services, transforming them into a "CFO in a Box." 

‍

Affirm: The Future of Consumer Finance

‍

Affirm, a platform that provides installment loans to consumers at the point of sale, highlighted its current focus on ensuring access to capital and maintaining strong credit standards. 

‍

As they prepare to launch their new card product, Affirm Debit, the company noted significant shifts in consumer spending habits since the end of April last year. In response to these changes, Affirm rolled out adaptive checkouts designed to manage risk better and provide more systematic and flexible lending options.

‍

On the macroeconomic front, Affirm identified a slowdown in discretionary spending attributed to inflation, except in the travel sector, which continues to see substantial spending. However, despite a less positive financial environment than the previous year, the company affirmed that it is well-funded and not capital constrained.

‍

AvidXchange: Innovation in Payments Automation

‍

The conference also introduced participants to AvidXchange, a payments automation company that targets the middle market (companies with annual revenues between $500k-$100m) and integrates with over 200 accounting/ERP systems. AvidXchange aims to shift around 50% of paper check transactions to digital payments, significantly reducing costs. 

‍

AvidXchange is particularly excited about the potential of AI in automating back-office functions. They are actively working to enhance their platform, develop customer-specific feature enhancements, and increase their system integrations. They are also set to launch a new product, the Invoicing Accelerator 2.0, which utilizes unique data models to improve invoicing for next-day payments, a process similar to factoring.

‍

J.P. Morgan Tech Conference Summary

‍

The 51st Annual J.P. Morgan Global Technology, Media, and Communications Conference offered valuable insights into the rapidly evolving digital payments industry. The learnings from the conference will help guide strategic decision-making and inform growth plans as we strive to maintain our position as a leader in freight payment technology. The key takeaway of the J.P. Morgan Tech Conference was reaffirming our commitment to continually evolve and adapt to provide robust, reliable, and innovative payment solutions that our partners and investors trust.

‍

As we move forward, we look forward to another year of navigating the complex digital payments landscape, staying ahead of emerging trends, and continuing to meet the unique needs of freight brokers and truckers in our ever-changing digital world.

The current freight market is one of the worst in history. Tender rejections have dropped to a record low of 2.53%; the previous record was during the COVID lockdowns at 2.57%. 

‍

However, we know the market will turn, and this slow time will be a distant memory.

‍

Until that day comes, staying on top of your finances is more important than ever. Maintaining cash reserves for carrier payment and payroll is essential to surviving any downturn. 

‍

Freight factoring can be one of the tools in your toolbox to weather a slow market. It allows you to access capital when you need it, giving you opportunities to take advantage of spikes in demand.

‍

There are some obvious benefits of freight bill factoring, especially for established brokerages looking to expand their business. It improves overall cash flow by providing quick access to cash that the broker would otherwise have to pay out of pocket to their carriers. This of course keeps carriers happy, on the road, and delivering reliably. 

‍

Some benefits of freight factoring are easy to see, while others are less obvious. These less visible benefits are just as important. 

‍

6 Freight Factoring Benefits 

‍

1. Liquid Capital Reserves: Freight invoice factoring ensures swift access to cash which otherwise would be tied up in carrier payouts. This frees up your cash reserves to scale or reinvest as you see fit. 

‍

2. Lowering Days to Pay and Enhancing Credit Score: With freight bill factoring, your carrier payments are prompt and on-time, which significantly reduces your days-to-pay ratio. A lower days-to-pay ratio can improve your brokerage's credit score, making your business more attractive to carriers. 

‍

3. Credit Checks to Mitigate Risk: Factoring companies for freight brokers provide credit checks on customers so you can feel confident taking new contracts. Ensuring the financial reliability of your customers safeguards your brokerage against unnecessary financial risks like non-payment or payment delays.‍

‍

4. Avoid High-Interest Business Loans: By leveraging freight factoring, you can avoid the need for high-interest business loans to finance operations. Unlike traditional loans, freight bill factoring is not debt - it's simply an advance on what you're already owed. Plus, freight factoring rates are not tied to the Fed, but instead your volume. ‍

‍

5. Working Capital for Operational Growth: Freight factoring can provide the working capital necessary to run and grow your brokerage. Turning invoices into immediate cash gives you the financial flexibility to invest in technology, hire more staff, or expand your marketing efforts. All are essential elements for business growth.

‍

6. Automated Carrier Payments for Improved Relationships: Freight broker factoring companies offer quickpay, ensuring on-time and reliable timely carrier payments. The result? Improved relationships with your carriers, fostering loyalty and reliability. Don't take our word for it, read Direct Expedite's testimonial.

‍

‍

Weathering Economic Uncertainty with Freight Factoring Benefits

‍

Navigating the volatile freight climate demands a secure financial foothold. Economic downturns and demand spikes require a strong financial strategy, and freight factoring shines. It provides quick access to cash, fast carrier payments, and improved cash flow.

‍

There are more benefits of freight factoring than meets the eye. It paves the way for business growth by preserving capital. Freight factoring enhances your credit score by reducing your days-to-pay ratio. Freight factoring allows credit checks, significantly reducing the risk of non-payments. These often overlooked advantages can make a substantial difference in driving the success of your brokerage.

‍

By harnessing the full range of benefits that freight factoring offers, you're fortifying your brokerage against economic downturns and strategically positioning it for enduring growth and success.

‍

The 2023 Transportation Intermediaries Association (TIA) Capital Ideas Conference brought together the nation's leading freight brokers for a four-day event in Orlando, FL. Our Denim team attended for the first time and was among the approximately 2,000 attendees. The agenda promised and delivered education, networking, and insightful discussions.

‍

We were thrilled to reconnect with many growing freight brokers we met last year, in addition to establishing new relationships. The mood was very positive despite the difficulties the industry is currently facing. The show of strength and perseverance of the freight brokerage community was inspiring.

‍

Let's dive into a few of the highlights.

‍

Pioneering Panels and Informative Discussions

‍

TIA’s First-Ever Ports Panel 

‍

A dedicated ports panel was a conference first. Adam Angle was in charge of the discussion, which included East Coast Ports personnel Byron Miller, John Petrino, and Robert Peek.

‍

The conversation centered around the intense pressure on the West Coast ports during the pandemic. Many TIA members faced disruption, prompting a shift of traffic to these East Coast ports. 

‍

Panelists discussed the ports' future growth ambitions and strategies for TIA members to enhance their business through port relationships.

‍

Congressional Outlook Discussion 

‍

Congresswoman Kat Cammack joined TIA's Vice President of Government Affairs, Chris Burroughs, to address the supply chain and infrastructure projects in the U.S. They discussed the outlook for the 118th Congress and several key legislative initiatives. 

‍

Addressing Industry Challenges: Fraud in the Supply Chain

‍

A burning issue that the conference addressed was the escalating incidents of fraud within the supply chain.

‍

On the conference's concluding day, a panel discussion on double brokering  brought industry experts together. The panel included Chris Burrough from TIA; Garrett Wolf from TriumphPay; Kenneth Lund from Allen Lund Co.; and John Miller from Plain Dedicated.

‍

Kenneth Lund sounded the alarm on double brokering. He shared that "fraud had seen a staggering 300% increase over the last three months." 

‍

The panel emphasized the importance of direct communication with drivers as a potent strategy for combating double brokering. Lund stressed the value of this approach, stating, “Ask to talk to the driver. And if they say no, that’s a red flag.” This straightforward yet effective tactic can be essential in detecting potential fraud.

‍

John Miller highlighted the necessity of a holistic approach in the battle against fraud and double brokering. He advised the audience to instill vigilance in their entire teams for driver verification, not confining this responsibility to carriers or dispatchers alone. “Ensure your clerical staff, the night dispatcher, and your entire team realizes the importance of verifying the driver,” he reinforced.

‍

The panel discussion also underscored the FMCSA's lack of enforcement, which has resulted in approximately $700 million in fraudulent activity, as a crucial concern. The session emphasized the immediate need for industry-wide measures to address this alarming issue.

‍

Looking Forward to TIA Technovations Conference

‍

With the TIA 2023 Capital Ideas Conference behind us, we're already looking ahead. The insights, strategies, and discussions that took place have further fueled our drive to continue innovating freight payments.

‍

The Tech Innovation Convergence in San Diego is set to offer more invaluable knowledge and networking opportunities. We're excited about what's to come and can't wait to continue the conversations that started in Orlando.

‍

Until then, we remain committed to supporting freight brokerages and logistics companies with easy-to-use freight payments system and flexible factoring. We hope to see you at the next TIA events!

‍

With over three decades of experience leading high-growth companies in the freight and logistics industry, JJ Singh has a wealth of expertise from his time at prominent logistics firms like CH Robinson, Flying J, and Exxon Mobil. 

‍

Throughout his career, JJ has developed a deep understanding of the challenges that persist in the supply chain. His passion for solving complex problems through cutting-edge technology led him to launch EKA TMS.

‍

EKA: Addressing Critical Challenges in the Freight and Logistics Industry

‍

EKA was established in 2017 to address the urgent problems of digitization and fragmentation in the freight and logistics industry. Over 3.5 million transportation and warehouse businesses are affected by these challenges, resulting in a fragile supply chain. With more than 50% of carriers, brokers, and shippers still using spreadsheets and duplicate entries, EKA aims to transform the industry through streamlined processes and reduced inefficiencies.

‍

‍

‍

‍

‍

Empowering Logistics Businesses of All Sizes 

‍

EKA's solutions are designed to help small and medium-sized broker, carrier, and shipper businesses operate efficiently from quote-to-cash. Their affordable, best-in-class digital tools enable higher performance, meeting the demands of tomorrow's supply chain.

‍

EKA offers four cloud-based SaaS platforms for its customers:

• EKA Omni-TMS® Platform for Brokers
• EKA Omni-TMS™ for Carriers
• EKA Omni-TMS® Platform for Shippers
• EKA-Mplace® Platform 

‍

Additionally, EKA provides cargo insurance solutions in partnership with Redkik and Lockton Company.

‍

Why Choose EKA?

‍

Selecting a Transportation Management System (TMS) is a critical decision for logistics companies. EKA's TMS is an intuitive, affordable solution that offers a high degree of automation (90%), enhancing productivity for brokers, dispatchers, and accounting staff.

‍

The solutions offered by EKA are designed to help businesses expand by accommodating annual revenues between $1 million and $75 million for carriers and brokers. Its efficiency enables a broker to manage up to 13 loads per workday and a 40-truck fleet to double its size without significantly increasing operations personnel.

‍

Furthermore, the system facilitates seamless collaboration with trading partners and third-party service providers, streamlining communication and reducing delays. Renowned for its "best-in-class" customer service, EKA's TMS is an excellent choice for logistics companies seeking a solution to support growth and long-term success.

‍

Denim + EKA Partnership 

‍

JJ Singh explains that EKA chose Denim as a partner due to its remarkable entrepreneurial spirit and rapid growth. Denim consistently delivers best-in-class accounts receivable factoring and carrier payment solutions, ensuring a strong financial foundation for their mutual clients. Furthermore, Denim's commitment to customer-centric service aligns perfectly with EKA's values and vision, making them an ideal partner for a long-lasting and fruitful collaboration.

‍

The real-time API-driven integration between Denim and EKA has brought numerous benefits to both companies and their customers. By syncing jobs between the two platforms, the integration eliminates manual data entry and ensures accuracy in freight payment processing. This innovative approach has resonated with some of Denim's largest clients, who are empowered to efficiently manage their payments through the EKA-Denim integration. With hundreds of jobs moving seamlessly between the two systems daily, efficiency has skyrocketed, and clients are reaping the rewards.

‍

Advice to Freight Brokers Today 

‍

We asked JJ for his advice on today’s freight market and below is his advice:  

‍

1. Stay Relevant in a Competitive Market. To remain relevant in a down market, secure regular freight contracts even if margins are thin. The goal is to be the go-to choice when others falter, as clean-up freight can be more profitable.
2. Maintain High-Quality Service. Avoid working with questionable carriers, and prioritize clear communication, on-time service, and responsible problem management. By minimizing non-price costs, you can enhance the overall customer experience.
3. Leverage Technology for Efficiency. Invest in technology today to automate processes and save time in the future. As the cost of your time is lower now, take advantage of this opportunity to carefully select and implement technology before the next demand surge.
4. Invest in Your Team. Align, motivate, train, and strategically add to your team while also eliminating underperformers. Remember that indecision can lead to failure, so be proactive in managing your team.
5. Provide Solutions, Not Just Services. Rather than merely offering a truck and a price, sell a comprehensive experience. Describe your investment in technology, processes, and people that ensures you deliver on your promise to provide exceptional service.

‍

Are you an EKA client looking to up-level your payment infrastructure? Or perhaps you're a Denim customer in search of an integrated TMS solution that aligns with your business goals? Either way, the EKA-Denim integration offers a comprehensive, innovative solution that can transform your operations and set you on the path to success.

‍

‍Get in touch with us today to learn more about how the EKA-Denim integration can benefit your brokerage and help you stay ahead of the competition.

Most freight brokers have probably heard of the term “freight factoring” or “invoice factoring” before - but many aren’t quite sure how the process works, even if they use freight factoring themselves!

‍

If that’s you, don’t worry: you’re in the right place. 

‍

Properly utilizing freight factoring can be one of the easiest ways for freight brokerages to improve cash flow, operations, and maximize growth opportunities - and we’re here to show you exactly how to implement it in your business.

‍

It’s very common, and generally considered best practice, for small and medium brokerages to use freight factoring. Still, any factoring helps brokers avoid floating the difference between paying their carriers and receiving payment from client invoices out of their own pocket. 

‍

Factoring isn’t just used by small and medium-sized brokerages. In fact, 58% of all freight brokers use invoice factoring to manage their cash flow (1). Not only that, but the vast majority (71%) of freight brokerages with more than $2 million in monthly revenue use invoice factoring (1). 

‍

Want to learn why the best in the industry use freight factoring to manage their payments? You’ve come to the right place. Welcome to the Ultimate Guide to Freight Factoring.

‍

What is Freight Factoring?

‍

Freight factoring can be a confusing topic, especially when you’ve got a business to run and don’t have time to dive into the nitty gritty. It doesn’t help that several terms are often used interchangeably but can have different meanings depending on the context. 

‍

Freight factoring is essentially an easy way for freight brokers to get access to short-term funding by selling uncollected invoices to a factoring company. This helps brokers cover costs between the time they deliver goods to the customer and receive payment for that shipment. With invoices often being paid 60-90 days after they’re sent, factoring can be a godsend to brokers that need cash immediately to pay their drivers.
‍

In 2000, freight brokers managed just 6% of the trucking industry. By 2023, they were handling over 20% of all trucking freight. However, the freight recession that hit in 2023 has squeezed margins, with large players like Surge and Convoy going bankrupt. In this dynamic market, maximizing cash flow is crucial.

‍

After 17 months of falling rates, signs of stabilization are emerging. The Cass index indicates we may have hit bottom, and Landstar reported revenue per load increases in Q2 2024. With a possible market rebound on the horizon, freight brokers must strengthen their back-office and finances to handle new opportunities.

‍

Freight broker factoring is an easy way for brokers to collect cash upfront for all of their invoices, without waiting for 30, 60, or even 90 days for their customers to pay their invoices. This allows freight brokers to quickly and easily pay their carriers using QuickPay, and gives brokerages far more flexibility and reliability in their finances. 

‍

If you’re trying to grow your brokerage, freight factoring can give you access to the working capital you need to succeed in a competitive environment. Some factoring companies also help with automating your finances, invoicing, payments, and more - saving brokers many hours per week. 

‍

Freight factoring does have a cost associated with it, which is taken out of the final payment on your invoices. This is usually between 1-5% of the total invoice(4).

‍

Here’s a brief overview of how the process works:

1. First, your freight carrier delivers their load for the customer, obtains a signature, and sends the broker their invoice along with proof of delivery.
2. Next, the broker sends those documents, along with the shipper rate confirmation for the load to the factoring company.
3. Your factor will pay you an advance on this invoice - usually up to 90% of the invoice value upfront - allowing you to pay your carriers without floating the expense.
4. After the invoice has been collected by your Factor, they’ll pay the remainder of the invoice minus the factoring fee.

‍

History of Factoring And Supply Chain Management

‍

Freight factoring in one form or another has been around for a surprisingly long time. There are references to the financing of trade since ancient Babylon, which was written into law in the Code of Hammurabi back in 1755 BC (5).

‍

It’s likely that some form of freight factoring and short-term financing has been around for as long as trade and banking have existed. The needs of those who transport goods haven’t changed much in the thousands of years since - even if the speed of transportation and communication has. 

‍

Freight brokers back then needed ways to finance travel, new purchases, and other expenses while they waited for previous investments to pay off - just as they do today. This created a need for short-term financing, which has evolved into what we now know as freight factoring. 

‍

Freight factoring and supply chain management evolved as transportation and new methods of shipping goods evolved. 

‍

In early history the pyramids of Giza, built nearly 4,500 years ago, may be one of the earliest examples of a large supply chain (6).

‍

It wasn’t until nearly 2,000 years later, around 200 B.C., that long-distance and intercontinental supply chains were created, with early examples including the Silk Road and the Indian Ocean Spice Route (7).

‍

In the early 18th century, during the industrial revolution, larger, faster, and more reliable ships were created that quickly sped up global trade.

‍

Trade financing has evolved alongside the evolution of transportation and new methods of shipping. In the early 1920s, some shipping companies sold secured bonds to the public as a way to finance their endeavors and future investments. The expansion of production and new technology in the 1900s forced supply chains to improve quickly to meet demand.

‍

In the 1930s, RFID (radio-frequency identification) was invented first to track and identify friendly planes during World War II. The same system was later adapted to be rewritable, and started seeing wide commercial use in the 1970s - and is now used for tracking shipments, locks, credit cards, toll roads, and more (8). 

‍

The Japanese created what we currently know as “just-in-time” (JIT) inventory management, which was first developed by Toyota’s manufacturing plants (9). The process was so successful that it later inspired Lean Manufacturing in the U.S.(10), and has become widely adopted across the supply chain today.

‍

While some forms of supply chains and supply chain management have been around for hundreds of years, the term wasn’t widely used until the 1980s, when it was coined by Keith Oliver, a consultant at Booz Allen Hamilton(11).

‍

Modern financial institutions have allowed for significantly faster (and less expensive) financing, which has led to the explosion of modern shipping companies across the globe. 

‍

How Does Freight Factoring Work Today?

‍

In its modern form, freight factoring is in some ways still similar to ancient forms of lending. Freight brokers sell their invoices to a third party, who will provide upfront access to cash that the brokers need to pay their expenses. The factoring company will then collect on the invoice 30, 60, or 90 days later and collect a small fee when paying out the remainder of the invoice to the broker.

‍

This gives brokers access to financing to pay their carriers and other expenses almost immediately (sometimes within a day or two), without pulling on their own cash reserves to cover the costs while they wait for customers to pay the invoice.

‍

Most factoring companies will have several options for your invoice collections & payments, including recourse freight factoring, non-recourse freight factoring, QuickPay for your carriers, and more. These options provide brokers with freight financing flexibility depending on their needs and current demand.

‍

Benefits of Factoring for Your Freight Brokerage

‍

There are some pretty obvious benefits of factoring for brokerages, especially for growth brokers who are looking to expand their business. It provides quick access to cash that the broker would otherwise have to pay out of pocket to their carriers, ensures carriers are paid quickly, and improves overall cash flow. This of course keeps carriers happy, on the road, and delivering reliably. 

‍

On top of these more visible benefits, there are a few aspects of factoring that are incredibly beneficial to brokers, but aren’t apparent at first glance. 

‍

These include:

• Maintaining capital reserves so you can scale your brokerage faster.
• Lowering your days to pay - giving your carriers more reasons to stick with you, and incentivizing new carriers to join your brokerage.
• Improving your relationship with your carriers with QuickPay.
• Allowing you to perform credit checks on customers, removing some of the risks of non-payment or delayed payments.
• Avoiding expensive business loans to cover the float or finance operations. 
• Providing working capital to run and grow your brokerage.

‍

These benefits - along with some of the other financial tools some factoring companies provide - give much-needed flexibility and scalability to brokers who are looking to grow their businesses.

‍

What Does a Freight Factoring Company Do? 

‍

Your freight factoring company of choice can have a major impact on growing and scaling your brokerage. They’ll provide everything you need to get access to financing in the short and long term, and provide a myriad of other services and benefits if you choose the right one. 

‍

The freight factoring process is relatively straightforward - giving you access to cash upfront while your factor collects on your invoices when they’re due. Many factoring companies have slightly different processes, but the process generally includes the following steps.

‍

How Factoring Works:

1. First, your customers request a shipment, and oftentimes your factor will perform a credit check on the customer to ensure their load qualifies for factoring. This protects both the broker and factor, and reduces the risks of defaulted payments.

2. Your carrier will then deliver the shipment as usual, and your factoring company will likely require rate confirmations and signed proof of delivery. They will likely request shipper rate confirmation, carrier rate confirmation, and a carrier invoice along with proof of delivery. 

3. Your factor will then provide you with up to 90% of the face value of the invoice. The amount of your advance can be influenced by a variety of factors, such as the perceived risk of default. When factoring with Denim, you and your carrier are paid within 24 hours of sending the invoice.

4. Your factoring company will then collect on the invoice from your customer on your behalf, so you don’t need to chase down customers for payment or worry about covering carrier costs in the meantime.

5. When the invoice is collected, you’ll be paid the remaining value of the invoice, minus the freight factoring company’s fee. This is usually around 1-5% of the invoice (4).

‍

Other services provided by factoring companies:

1. Back-Office Support and Automation: Some factoring services provide back-office support and automation, streamlining your invoicing and payments process.
2. QuickPay for Carriers: With QuickPay factoring for freight brokers, your carriers get paid quickly without being charged a fee. This makes their lives easier, and makes them more likely to return.
3. Dedicated Account Management: Additional support and consultation to manage your finances is provided by some factoring services.
4. Free Credit Checks For Shippers: Some factoring providers perform free credit history checks into shippers, preventing unqualified customers from causing bottlenecks.
5. More Access to Working Capital: It’s important to have access to cash when you need it, especially during uncertain or competitive market conditions. During uncertain times, it’s important to have access to cash when you need it. Factoring companies can be a financial resource that will keep your operations running.

‍

Factoring companies like Denim can also be a smart solution for other financial needs - not only providing financing options that scale with your business, but the tools and automation needed to keep your business running efficiently.

‍

The Application Process and Terms

‍

While there is generally an application process to factor your invoices with a factoring company, it’s a relatively quick and easy process. Most companies approve applications within a day, and will often require significantly less information compared to other forms of financing. 

‍

How do you qualify? 

‍

Some factoring services require more than others, but there are generally a few criteria they’ll ask for or review when you apply. 

‍

This includes:

• Business Information: Your factoring company will likely require some basic business information from you, and will verify everything is correct and in good standing. This may include verifying existing assets or debts your business has during the underwriting process.
• Monthly Invoice Volume: The number of shipments you invoice customers for each month. Generally higher volume brokers will have better factoring rates.
• Customer Concentration: Some factoring companies see brokers with fewer customers as higher risk.
• Minimum Revenues: Some brokers require minimums to factor your invoices, while others such as Denim do not have any minimums.
• Background Check: Your factor may perform a company background check on your brokerage to ensure there aren’t any issues.
• Credit Rating or Liens: The credit rating of your business and any existing liens against your company may have some impact on your ability to receive financing or factor certain invoices. Your factoring company will likely perform a credit check to identify any of these issues.
• Personal Guarantees: To guarantee the best rate possible, factoring companies may require you to sign a personal guarantee. This is simply a promise to a factoring company that the will be able to recover the advance provided.

‍

Common Freight Bill and Factoring Invoice Terms to Know:

• Accounts Receivable: Unpaid money that customers owe you. 
• Factor: The factoring company you use.
• Factoring Rate: The percentage of the invoice which your factoring company is paid.
• Recourse Factoring: A method of financing where a broker will sell its unpaid invoices to a factoring company at a discounted rate, but are responsible for any customer defaults. Generally has a lower factoring fee and more flexible credit lines compared to non-recourse factoring.
• Non-recourse Factoring: Lowers the risk for brokers, putting all of the responsibility for collecting on invoices on the factoring company. The factoring service assumes the risk for unpaid invoices, but also will generally charge a higher fee. 
• Net Terms: The amount of time an invoice has to be paid.
• Advance Rate: The amount of advance the broker receives from their invoices from the factoring company. A lower advance rate may impact the factoring rate.

‍

Sample invoice: 

Factoring Rates 

‍

The rate you’re quoted for factoring can vary based on the type of agreement you have and other fees your factoring company may charge.

‍

Rates are generally determined based on the creditworthiness of your clients and your business, the volume of invoices you factor, current prime rates, and more depending on the factoring company you choose. Some offer tiered rate programs which decrease the rate you pay as your volume increases, while others tie rates to prime rates.

‍

Most factoring rates are between 1-5%(4), with rates increasing when brokers choose to use non-recourse factoring. These rates are the base factoring fee that your service provider charges, and may not be the only costs associated with factoring - more on this below. 

‍

Understanding the Fine Print and Hidden Costs

‍

When making a decision about a factoring company, be sure to read the fine print. Some will advertise low rates or risk-free financing, without being very upfront about their costs.

‍

Here are some important fees and requirements that are sometimes hidden in the fine print of factoring agreements: 

• Setup fees: A fee charged to begin working with a factoring company at the time of sign-up. Usually a one-time fee.
• ACH, Wire Transfer, or Check Processing Fees: Some factoring companies will charge a flat or percentage fee for each ACH transfer to your accounts.
• Minimum Volume Fee: Double-check that your factoring company won’t charge you if you don’t meet minimum volume requirements. These fees can quickly eat up the invoices of smaller brokers.‍
• Client's Credit Check Fee: A fee charged to check the creditworthiness of your customers - some charge for this and others do not.‍
• Aging Fees: Fees charged for invoices that take a longer time to be paid by your customers.‍
• Invoice prep &/or administration fees: Fees charged for preparing invoices, managing your account, etc.‍
• Length of Terms: The amount of time to pay on an invoice or contract.‍
• Termination Fee: A fee charged for early termination of your agreement.

‍

If a factoring company is charging any of the above fees, or has unfavorable terms like these in your contract, be wary of low advertised rates.They may have lower rates than alternatives, but will often eat up the value of your invoices through additional fees and restrictions.

‍

At Denim, we’re proud to offer clients factoring with no additional fees or long-term contracts. We know your business depends on knowing exactly how much you’ll receive from each invoice,  which is why the only fee we’ll ever charge is our base factoring fee. Schedule a demo to learn more.

‍

How to Choose the Right Factoring Company? 

‍

Choosing a factoring company is an important step to growing any brokerage, but it can be a challenging decision.

‍

At face value, low base rates and high advance rates are advertised to brokers, but there are a few other things to consider. 

‍

Here are the top questions freight brokers should ask before picking a factoring company:

1. How long and complicated is the application process to receive funding? 
2. How quickly are brokers and carriers paid after load delivery?
3. Do they offer QuickPay for carriers? Is it free?
4. Can you (the broker) choose which loads they want to factor?
5. Do they prioritize cybersecurity to ensure your funds are safe?
6. Are there any hidden costs, additional fees, or long-term commitments?
7. Does the Factor handle receivables and payment management?
8. Does the Factor offer Flexible Factoring?

‍

Check out this full list of essential questions every freight broker should be asking their factoring company. 

‍

Growth-focused brokers may also wish to consider the other financial services provided by a factoring company. Choosing a Factor that can scale alongside your business and provide other financial insights may be essential in future-proofing your company. According to KPMG, one of the largest consulting firms globally, investment in holistic supply chain technology will be an essential strategy in 2023 (12).

‍

This means that growth brokers looking to get ahead should focus on providers that incorporate more than just factoring into their services. Without end-to-end visibility into your analytics, customer credit, or back-office optimization, your brokerage may be left behind.

‍

What is the Difference Between Recourse and Non-Recourse Factoring?

‍

When entering into a factoring agreement, there are two common types of factoring you’ll encounter: Recourse Factoring and Non-Recourse factoring. These factoring types have some benefits and drawbacks that you may want to consider depending on your risk tolerance and financial situation.

‍

Recourse Factoring

‍

Recourse factoring is a form of freight bill factoring where the factor pays the broker upfront for any invoices, and then attempts to collect on those invoices when they’re due. This provides the broker with working capital to pay carriers fast, and the factor collects a fee for floating the difference. If the customer defaults on the debt, the broker is responsible for paying back the factoring company. 

‍

Full recourse factoring may seem riskier for the broker, but it does have several advantages over non-recourse factoring. The most important of which is a lower factoring fee - since the factoring company is taking on less risk, they’re able to charge less for factoring and pay brokers faster.

‍

Recourse factoring is also a great choice for brokers who have long-lasting relationships with their clients, and are aware of their payment history. If you already know your clients pay on time, recourse factoring is less expensive and gets you paid faster.

‍

Non-Recourse Factoring

‍

Non-recourse factoring means that the factoring company assumes the risk of default by the broker’s customers. While this sounds less risky on the surface, it does come with a few caveats. 

‍

Often brokers are only protected by non-recourse factoring in very specific situations such as the bankruptcy of the client. This can cause brokers to get the worst of both worlds: higher fees and responsibility for defaults that aren’t the result of bankruptcy. 

‍

Non-recourse factoring will also limit a broker’s customer base, since the factoring company is assuming all of the risk. This means they’ll frequently decline to factor invoices for customers who have less than perfect credit, leaving the broker on the hook. 

‍

Learn more about recourse vs. non-recourse factoring here.

‍

Factoring Discounts: Time & Volume

‍

What are Factoring Discounts?

‍

Factoring discounts are ways brokers can save on their rates, improve their cash flow, and adjust their funding based on their unique needs. There are generally two types of factoring discounts: time discounts and volume discounts.

‍

Some factoring companies may offer one or both of these discounts to their clients, depending on the number of invoices factored and the speed at which the client needs to be paid.

‍

Time-based factoring discounts reduce your rate based on how quickly your brokerage chooses to receive the advance for your invoices. These discounts offer a decreased rate to brokers who need a smaller amount of their invoices paid upfront. For brokerages that can delay the need for an advance on their invoices, time-based discounts can help cut down on fees if they don’t need the capital immediately. 

‍

Volume-based factoring discounts are decreases in your rate based on the volume of invoices your brokerage factors. These factoring discounts provide increased cash flow and a lower rate for larger brokers who process a lot of invoices.

‍

Factoring discounts give brokers some control over their rates and help reduce fees as your brokerage scales. Learn how you can save money on your factoring fees with Denim.

‍

Factoring Freight Broker Invoices vs. Other Funding Options 

‍

With freight factoring, your funding is based on goods that have already been sold and delivered. This allows factoring companies to provide an advance on your invoices for significantly lower rates than other kinds of financing.

‍

Business loans from the SBA have significantly higher rates, with a minimum of 2.25% + the prime rate, meaning a loan in early 2023 would cost you between 10-12%. A business line of credit can be even more costly depending on your creditworthiness, and can have rates as high as 16%-27% (13). 

‍

Compare this with freight factoring rates of 1-5%, and it becomes obvious why many brokers choose to factor over other methods of financing. 

‍

Factoring also won’t lock your business into monthly recurring payments like a bank loan or line of credit. 

‍

Loans from banks, the SBA, or private investors also often require some form of collateral. This could mean putting up your trucks, equipment, or office space as a guarantee against your loan. Since factoring is based on your existing invoices, generally no additional collateral is required, and approval is based on your customer’s creditworthiness, not yours. 

‍

Factoring also gives brokers an easy way to reduce debt on their balance sheet while simultaneously lowering their debt-to-equity ratio.

‍

‍

Why Factoring is an Important Part of a Freight Broker’s Strategy in Both Up and Down Markets

‍

Smart brokers can take advantage of freight factoring in a wide range of markets, and it can be a useful tool to withstand economic turmoil. Easy and inexpensive access to funding can and should be a part of any broker's growth strategy, regardless of the economic climate. 

‍

Factoring in Down-Markets

‍

With the recent news of slowdowns in manufacturing, decreases in shipments, and trucking conditions falling to record lows, it’s more important than ever to stay on top of your finances. Maintaining cash reserves needed to manage carrier settlements and meet payroll is essential to surviving any downturn (14). 

‍

Factoring can be one of the tools in your toolbox to weather a recession. It allows you to access capital when you need it, giving you opportunities to take advantage of spikes of demand when they occur. 

‍

With most factoring companies there’s also no upfront cost or long-term commitment - you can sign up today, and only use it when you need it. Traditional forms of financing can lock brokers into fixed payments that might be challenging to keep up with if demand begins to slide. 

‍

During a downturn, it’s also important to consider your client’s reliability. Some factoring companies will perform credit checks and vet your clients to ensure they’re able to pay, and don’t have a history of defaulting on vendors. For example, at Denim we provide free unlimited credit checks for all customers, so you can be confident that invoices will be paid on time.

‍

Without a way to monitor customers’ history, some brokers can end up working with customers with a bad history of repayment. During an economic downturn, it’s critical that brokers work only with customers who are financially able to cover their obligations and pay their invoices on time.

‍

Factoring During Up Markets

‍

Easy access to capital is an essential tool for growing a freight brokerage during an up market, which is why freight factoring can be a useful tool when the economy is on an upward trend.

‍

Without access to capital, your business may not have enough cash on hand to capitalize on new demand as the economy improves. Consumers generally spend more during economic uptrends, which in turn means more goods need to be manufactured, shipped, and delivered to fulfill this demand. For example, in 2017 when the economy had been growing for several years in a row, the ATA trucking tonnage index rose by 3.7% - the largest annual gain since 2013 (15).

‍

The data clearly shows that when the economy is growing, so are trucking revenues. This is why it’s so important to have access to capital when needed. New customers are more likely to need new routes or additional deliveries from carriers during a growing economy. Without fast access to inexpensive capital, some brokers may lose this business to other more established 3PLs. 

‍

Freight factoring is one of the tools growth brokers should employ to remain competitive when the economy rebounds. With the right tools and access to funding, brokers can build and grow relationships with new carriers and customers during economic upswings. Easy access to funding also allows brokers to take on new jobs in niches they might otherwise avoid during downturns.

‍

The Benefits of Automating your Freight Factoring

‍

Factoring on its own has a wide range of benefits, which are compounded when used in conjunction with automation.

‍

Automation is quickly becoming an essential part of managing a broker’s back-office, and brokers that ignore these changes may be left behind by the competition (12). Carriers and clients are beginning to expect QuickPay, automatic payments, and prompt invoicing provided by automation.

‍

Automated factoring improves your company’s efficiency, allowing for streamlined invoicing, billing, and payment processing. This can significantly cut down on the time required to manage your accounts each week.

‍

With automated factoring and back-office support, your brokerage can expect:

• A Competitive Advantage: Automated freight factoring keeps your business ahead of the competition, providing more value and a better experience for clients, which in turn increases referrals and repeat business.
• Improved efficiency: Automating invoicing and payables streamlines the billing and payment process and significantly reduces the amount of time staff needs to spend on accounting.
• Enhanced accuracy: Manual invoicing and account management often leads to increased errors and inaccuracies. With an automated invoicing system, errors and inconsistencies in your data are automatically flagged. 
• Increased security: Automation reduces the risk of fraud, errors, and missed payments, which improves the security of your operation.
• Improved cash flow: Automated invoices and payments ensure that everything is on time and issued promptly, improving cash flow and operational efficiency.
• Improved relationships with clients and carriers: Carriers are beginning to expect QuickPay, and an automated back office ensures they get paid fast. This improves your relationships with carriers and customers, since checks and invoices are always accurate, on time, and easily understood. 
• Reduced administrative burden: Sending invoices, paying carriers, and managing your finances can be time-consuming and error-prone. With automation brokers often save many administrative hours each week, all while improving accuracy and efficiency.
• Align administrative costs with revenue: Factoring helps brokers remain lean and agile, allowing them to grow and scale quickly during up markets, and maintain solid margins without a bloated staff during down markets.

‍

The hours saved from automating your freight factoring will likely pay for the factoring fee on their own. Carriers, customers, and staff all benefit from the accuracy and efficiency of automated freight factoring, making it an easy decision for most brokers.

‍

Buyouts and Transitioning Freight Factoring Companies

‍

When a broker is considering changing from one freight factoring provider to another, they go through a process called a ‘buyout’. The process allows brokers to switch from one factoring company to another that better fits their needs, without losing access to funding in the short term. 

‍

If your current factoring company is charging excess fees, or doesn’t offer features like QuickPay or other financial enablement services, it might be time to consider switching to a new freight factor. 

‍

Here are some questions to consider if you’re thinking about transitioning to a new factoring service:

• Does your new factoring company offer better rates or terms? 
• Are there hidden fees or costs associated with your current factor that could be removed by switching?
• Will you experience improved customer service with the new factoring company?
• Does your current factor pay on time, every time?
• Are there terms in your contract, like volume minimums or aging fees, that make your current factoring company harder to work with?
• Does your factoring company use modern technology, automation, and easy-to-use reporting and dashboards? 

‍

Before switching factoring companies, you’ll want to review your existing contract and be aware of any cancellation fees, contract end dates, or other terms related to canceling your contract. 

‍

‍

The Process of a Freight Factoring Buyout

‍

The buyout process can vary depending on who you choose for your new factoring company. At Denim we take care of the vast majority of the process on your behalf. After you’ve notified your previous factoring company that you’ll be canceling and agreed on a buyout date, Denim takes care of the rest. Here’s what the process looks like: 

1. Verify UCC filing and Initial Aging Report: Denim will contact your current factoring company to verify their UCC filing and request an initial aging report to ensure no outstanding liens or claims against your accounts receivable. Denim's operations team will also verify the aging report provided during the sales process by contacting your shippers to expedite the payment process and ensure a smooth transition.
2. Request final aging report and buyout agreement: We will request the final aging report from your current factor to confirm no additional loads were added to the accounts receivable. The final aging report is crucial to avoid discrepancies or disputes after the factoring buyout. The buyout agreement, which outlines the terms of the purchase and may take up to a week to process, will also be requested.
3. Sign Buyout Agreement: All three parties, including you, Denim, and your current factor, will sign the buyout agreement after careful review and understanding of all the terms.
4. Send the wire to complete the buyout: Denim will then prepare and send the wire to purchase all the open invoices, verifying receipt with your current factor.
5. Denim takes first place on UCC filing: The previous factor will send a release letter to replace their UCC filing, allowing Denim to take the first position by filing a UCC-1 financing statement. This final step completes the buyout.
6. Welcome Party!: Denim will introduce you to your new account manager and onboarding crew who will assist with integrating your account and provide a demo of your dashboard to kickstart your partnership.

‍

Conclusion

‍

Freight factoring is one of the easiest ways for brokers to get ahead, grow their business, and become known for fast and reliable payments, which is why it’s critical that you choose the right factoring company.

‍

At Denim, we’re proud to offer transparent, flexible factoring to brokerages of all sizes. You’ll never be surprised by your bill again with free account creation, applications, credit checks, ACH transfers, QuickPay, and more.

‍

Set up your free account today and only factor the invoices you need, when you need them. 

‍

Call (855) 250-4142 or sign up here to get started today.
‍

Additional Sources & References:

1. Denim: Freight Broker Pulse Report, 2022.
2. Freight Waves: SONAR monthly report, December 2022.
3. Allied Market Research: Freight Brokerage Market to Garner $90.7 Billion by 2031, August 30, 2022.
4. Freight Waves: Best Factoring Companies for Trucking, June 8, 2022.
5. Yale Law School: the Code of Hammurabi, n.d.
6. Technology And Engineering: Building the Pyramids, n.d.
7. The Globalist: A Brief History of Supply Chains, March 22, 2012.
8. RFID Journal: The History of RFID Technology, Jan 16, 2005.
9. University of Cambridge: JIT Just-in-Time manufacturing, n.d.
10. Strategos, Toyota Production System (TPS) & Lean, n.d.
11. Wikipedia: Keith Oliver, n.d.
12. KPMG: The supply chain trends shaking up 2023, n.d.
13. Bankrate: Best business lines of credit, February 2023.
14. Bharath Krishnamoorthy: Freight Broker Success in a Post-Covid Era, 2020.‍
15. American Trucking Associations: ATA Truck Tonnage Index Rose 3.7% in 2017, Jan 22, 2018.

The freight market remains in flux as we enter the second quarter of the year. While some indicators show positive growth, others reveal a decline, leading to mixed signals about the industry's outlook. 

‍

‍

Inflation Slows Consumer Spending  

‍

Despite rate hikes by the Fed, inflation continues to be a headwind faced by the freight industry. Inflation pressures remain high with consumer price indices revealing a 6.0% YoY increase. It is felt the most in food prices, which increased by 9.5% YoY. 

‍

‍

‍

Overall, retail sales in the United States fell by 0.4% in February without adjusting for inflation. Furniture stores and food/drinking services sales were hit the hardest, with a 2.5% and 2.2% decrease respectively. 

‍

The decrease in sales of discretionary or bigger ticket purchases directly impacted freight movement, as consumers spent less overall. However, there was a slight increase in demand for the reefer sector, which includes food and health-related items. Freight brokers and logistics professionals may consider bidding on more reefer loads going into April.

‍

The Conference Board Consumer Confidence Index increased slightly in March to 104.2, up from 103.4 in February. However, the overall score remains lower than in 2022. A low score indicates consumers are more hesitant to buy goods, resulting in less freight movement. Freight brokers and logistics professionals should monitor consumer confidence trends to anticipate future demand better.

‍

Truckload Demand Increases but at the Slowest Pace in 5 Years

‍

According to recent industry reports, the freight market showed minimal growth in February going into March. 

‍

In February, truckload demand increased by 2.5%, the smallest tender volume increase in five years, and remained steady through March. The National Truckload Index (NTI) also fell by 5%, with a 3.8% decrease when excluding fuel costs, reflecting softened demand. 

‍

‍

The softened demand can also be seen in rejection rates, which fell by 25 basis points in February, hovering just below 3.5% Carriers handled 25% more volume in late 2021 than they currently are. 

‍

One potential reason for the slower growth is the large carrier capacity available under contract, which is reducing shippers reliance on the spot market. As more shippers secure capacity under contract, there is less demand for spot rates, possibly driving the rates down.

‍

Seasonal Demand Shows Signs of Return 

‍

The analysts have been anticipating a return to seasonality in 2023, and the market is finally  starting to show signs of a soft return. Tender volumes were 2.7% higher in the first two weeks of March, signaling a slight seasonal rebound. 

‍

‍

The oversupply of carriers persists leading to a continued fall in spot and contract rates. As a result, carriers may work harder to secure business and maintain profitability, and brokers may have to adjust their pricing strategies to remain competitive.

‍

As the produce and summer shopping seasons approach, volume should increase. Freight brokers can prepare for this soft return by building and maintaining relationships with their carrier networks. Brokers that offer fair rates to keep their carrier network on the road will reap the benefits when the market changes.  

‍

Cautiously Optimistic Freight Market 

‍

The freight market is slowly recovering but is not out of the woods yet. 

‍

With inflation pressures and hesitant consumers, it's essential for brokers to stay competitive and maintain their relationships to continue to weather the freight recession. 

‍

SmartBrokers are using this time to take a proactive approach that involves leveraging technology to streamline operations, achieving operational excellence to reduce costs, developing strong relationships with carriers and shippers, and having a growth mindset to identify opportunities for expansion. By embracing these strategies, smart brokers can position themselves for long-term success and thrive in difficult market conditions.

‍