Transitioning your freight brokerage to a new freight factoring company is easier than it seems. The freight factoring buyout is a process that allows freight brokers to switch their factoring company to one that better fits your needs. Switch to a better factoring company and say goodbye to poor customer service, high fees, late payments, or other challenges with your current factor. 

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Freight brokerages work with a freight broker factoring company to improve its cash flow and maintain its operations. As a freight brokerage, you may face long payment terms from your shippers, leading to cash flow problems and hindering your ability to grow your business. A freight factoring service can help alleviate cash flow challenges by purchasing your unpaid invoices and providing immediate cash advances.

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It’s important to remember not all freight factoring companies are the same. Brokers may have problems with their current factoring company, such as high fees, slow payments, and poor customer service. Any of these issues can damage your brokerage reputation and your business. Don’t let a lousy factoring company drive your business off track - it’s time to steer your brokerage in a better direction.  

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Why Switch Freight Factoring Companies in 2024? 

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We are currently experiencing one of the worst freight recessions in history, as volumes decreased by 15% in Q4 of 2023. This means that trucking companies need to evaluate their costs for efficiency, as an increase in demand is not expected anytime soon.

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If you're considering switching your freight factoring company, it's important to do so carefully. It's a bit like switching banks - it can be daunting, but it can pay off if done correctly.

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Factoring companies work with both clients and carriers, so any mistakes they make can reflect poorly on a broker's reputation. To avoid such issues, brokers should take the time to research and find the right partner. This way, they can focus on growing their business and building strong relationships with their clients and carriers.

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Remember, your factor is a core business component, so it's worth taking the time to find the best fit for your needs. When switching to a new factoring company, consider the following potential components.

Negotiate Better Rates and Terms 

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One of the primary reasons to switch your freight factoring service is to get better rates and terms.

Freight factoring companies negotiate rates based on volume and average days to pay. If your brokerage has increased volume, it’s time to re-evaluate and shop around for new rates. A lower factoring rate translates into better margins, which is especially important during a freight recession. Every dollar counts. 

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It's essential to remember that while comparing rates is smart, paying attention to the fine print and being aware of hidden costs is equally important. You want to avoid being surprised by wire transfer fees, collection fees, credit check fees, or any other unexpected expenses. While factoring companies can charge for additional services, ensuring transparency is crucial. A reputable factoring company should always disclose all potential charges upfront. However, it's ultimately up to you to carefully read the contract before signing. If you're switching factoring companies because of cost, compare similar services and uncover hidden fees.

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Additionally, some factoring companies have limiting contract terms like volume minimums, which can be detrimental during market swings. By switching companies, you can find a provider with more favorable terms that align with your business needs.

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Improved Customer Service

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Fast and responsive customer service can be the difference between paying your carriers on time or winning a lane. 

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As a freight brokerage, you should expect attentive, responsive, and expert help whenever you have issues, questions, or concerns. Your carriers and customers should also receive excellent treatment from the factoring company. When the factoring company collects funds from your client, the service should be exceptional - consistently professional and reliable.

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Suppose your current freight factoring company is slow to respond, unknowledgeable, or 

fails to fund your invoices within the agreed-upon time frame. In that case, it’s time to consider switching to a factoring company that values your business. A factoring company should treat you and your customers with patience, respect, and eagerness to go the extra mile to meet your needs.  

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Intuitive platform and advanced technology 

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Your freight factoring platform should not look like a 2000s website. User experience has come a long way since web 1.0; your factoring dashboards should reflect that.

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Freight brokerages are embracing freight technology in droves as more software companies have come to the market with intuitive and responsive platforms. The software you choose should have a sleek, clean, and easy-to-use interface that enables employees like Glenda in accounting to find what they need quickly. A well-designed platform will make Glenda a happier employee and free up her time to research new business opportunities. 

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Tech-forward factoring pairs financing with back-office automation to save brokerages time and headaches. Automation features like bulk uploads or two-way integrations with your TMS make invoices, payments, and recollections as easy as one click. 

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Strategic Alignment with your Business Goals 

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You want a factoring company that will scale with your business. Ideally, you want to switch factoring companies sparingly, as it could hurt your credit score and reputation. So finding a freight broker factor that will support your continued growth is paramount.   

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Shay Lynn Dixon of Scale Logistics chose to factor with Denim because she “knew the ‘old-school’ way of factoring wouldn’t work for her as a tech-savvy business owner.” 

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You can build a more substantial, sustainable business for years by partnering with a factoring company that shares your values.

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Preparing for the switch

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Switching to a new factoring company can seem daunting, but it can be a smooth process with careful preparation.

Start by reviewing your current contract with your existing factoring company. Take note of any cancellation fees, contract end dates, and terms. Ensure you have all the necessary documents, including an aging report and a copy of your contract. This preparation will help you avoid any surprises or delays later on.

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Next, identify the best factoring company. Do your research, read freight factoring company reviews on sites like Trustpilot, ask questions about their business, and ask for recommendations from other brokers. Request a demo of the software to get a feel for how it works and ensure it meets your and your team's needs.

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By taking the time to prepare and do your research, you can switch to a new factoring company with confidence and set your brokerage up for success.

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Steps to Switching Your Factoring Company 

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Good news: Deciding to switch is the hardest part of the process for you. The two freight factoring companies handle most of the buyout process. Your freight brokerage is only responsible for three easy steps: 

1. Notify the existing factoring company of your intention to cancel the contract and end date. Don't wait - often, there are 30 to 60-day notification periods. Cancellation must be in writing, typically over email. 
2. Log in to your current factoring company’s dashboard and pull the aging report. The aging report should show all outstanding invoices and status. Your new factoring company will use this aging report to vet your eligibility for a buyout and initiate the buyout.
3. Fill out your application for the new factoring company. 

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Kick up your feet and take a deep breath.

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Buyout Process with Denim 

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At Denim, we want to make the buyout process as easy as possible for our clients. We will handle most communication and coordination with your current factoring company.The Denim team will provide daily updates on the progress, so there are no surprises or unanswered questions.

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After you've notified your old factoring company and agreed on a buyout date, Denim will go to work for you. 

The steps Denim takes to complete a buyout:  

1. Denim will contact your existing factor to verify their UCC filing and request an initial aging report.

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A Uniform Commercial Code (UCC) filing is a legal notice that a creditor files to notify other parties that it has a security interest in a particular asset, such as accounts receivable. Factors take the first position to protect their investment. Denim needs to verify the UCC filing to ensure no outstanding liens or claims against your accounts receivable.

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Denim will request an aging report directly from your factoring company to verify the aging report originally provided in the sales process. 

2. Denim’s operations team will contact your shippers and verify the balance of every open invoice.

Contacting your shippers is vital to ensure a smooth transition to Denim. This step helps expedite the payment process and ensure you receive the funds you owe on time.

3. Request the final aging report from the existing factor and request the buyout agreement.  

We will request the final aging report to ensure your brokerage added no additional loads to the account receivable. A final aging report is necessary for both Denim and you. It helps avoid any discrepancies or disputes that arise after the factoring buyout.

The buyout agreement is a legal document that outlines the terms of the factoring buyout, including the purchase price and any other relevant terms. This process can take up to a week. 

4. All three parties will sign the buyout agreement.

The previous factors will initiate the buyout agreement because they are the party selling the accounts receivable. All three parties will sign the deal, including you, Denim, and your current factor. It is essential to review the buyout agreement carefully and understand all the terms before signing.

5. Denim will prep and send the wire to purchase all the open invoices and verify receipt

Once everything is verified, Denim will prepare and send the wire to purchase all the open invoices. Denim will verify the old factoring company received the wire. 

6. Send a letter of release to replace UCC filing and assign Denim first position.

The previous factor will send a release letter and permit Denim to terminate their UCC filing. Denim will then file a UCC-1 financing statement to take the first position. This step completes the buyout.

7. Welcome party!

Denim will introduce you to your new account manager and onboarding crew. This group will help step up your account with any integrations and give you a demo of your dashboard. 

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Denim Makes Switching Factoring Companies Easy 

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Switching factoring companies is smart for freight brokers with increased volume or looking for a better experience. But finding the right partner can be a challenge - after all, factors play a crucial role in interacting with clients and carriers, and any mistakes can have serious consequences for a broker's business.

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That's where Denim comes in. Our tech-forward factoring lets brokers enjoy smart automation tools and flexible factoring options without hidden fees or limiting contract terms. We offer some of the industry's lowest rates and the fastest turnaround on approvals, so you can keep your business running without any bumps in the road.

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Don't just take our word for it. Read how Yeti Logistics switched to Denim in just 3 days and saved nearly $20,000 in factoring fees.

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Selecting a factoring service is a daunting, but necessary task for freight brokers who need financing options.

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Not all factoring companies are created equal. Brokers need to know the right questions to ask when evaluating freight factoring services. And they need to understand the implications to ensure a beneficial partnership.

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Factors such as contract terms, fees, funding options, credit checks, and customer service are necessary to dig into before committing to a service.Understanding these questions can help freight brokers make informed decisions and avoid any unpleasant surprises or hidden costs down the road. It also helps ensure a healthy, long-term relationship with the factoring company.

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Questions to Ask Factoring Companies in 2024

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As we navigate through 2024, the freight brokering industry faces unprecedented challenges and opportunities. The rapidly evolving market conditions and the increasing importance of financial stability make it essential for freight brokers to scrutinize their financial partners more closely than ever.

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The recent bankruptcy liquidation of a Texas-based factoring company, reported by FreightWaves, serves as a potent reminder of the risks involved and the critical need for due diligence.

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This incident highlights not just the immediate impact on affected clients but also casts a long shadow over the perceptions of solvency within the factoring industry. In a year that promises growth amidst volatility, understanding the financial health of your factoring partners is paramount to ensuring operational continuity and seizing emerging opportunities.

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The landscape of 2024 demands a proactive approach to evaluating the solvency of factoring companies. Here are vital questions that freight brokers should consider:

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1. Where does the company's capital originate?

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Understanding the sources of a company's capital can shed light on its stability and reliability. A strong foundation of equity and secure debt indicates a resilient capital structure capable of supporting your needs.

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2. What is the monthly factoring volume?

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The monthly volume of factored invoices reflects the company's market presence and trustworthiness. A substantial and consistent volume suggests a healthy client base and operational robustness.

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3. Is there a cap on purchase amounts?

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Caps on purchase amounts can indicate the financial strength and flexibility of the factoring company. It's crucial to partner with a company that can accommodate your growth and factoring requirements without restrictive caps.

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4. What concentration limits are in place?

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Concentration limits reveal the company's risk management approach. While lower limits suggest a cautious strategy, offering stability, higher limits may provide more flexibility but at a potentially greater risk.

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General Questions to Ask Factoring Company’s (With Denim’s Answers)

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Outside solvency questions, you will want to ask your factoring company about their platform, processes and contract to get a better understanding of the potential partnership. Here are a few questions. 

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1. Do you have a webapp/user portal where I can view and manage my payments, or do I have to call in and talk to an account rep every time?

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Yes! Your Denim portal is available on any browser using your laptop, pc, or phone - 24/7, 365.  

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2. What are the 3 key benefits I will get from your service?

1. Time - Automations built specifically to simplify a freight broker’s day-to-day.
2. Transparency - Full visibility to your financial transactions, and clear communication for your customers and carriers when collecting invoices and making payments. 
3. Ease of Use - An essential piece of a modern freight broker tech stack, designed from the ground up with the freight broker in mind. 

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3. Are you a recourse or non-recourse factoring company?  What if a shipper fails to pay or files for bankruptcy? 

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We are a recourse-based company, and will handle your collections for 120 days. If we fail to collect from your customer (shipper) you will get a chargeback on day 90. The biggest way we protect your company while also protecting ourselves is by offering unlimited free credit checks - which must run credit before we approve a new customer of yours on the platform. In the event a customer of yours is denied, we provide a full transparency report on why. You are still more than welcome to run the  load at your own risk, we just won't finance it. 

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4. What is your factoring rate? 

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Our factoring rate depends on your volume and can range from 1-3%. To qualify for lower rates, your freight brokerage must meet certain thresholds in volume and or value of monthly factoring with Denim.

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5. How long does your 'quick pay' take to issue payment to carriers/truckers? 

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We offer QuickPay in 1-2 business days. If you upload an invoice on our dashboard by 12:00pm EST the payment is guaranteed the following business day. 

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6. Is there a minimum factoring fee per invoice? 

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No, there is no minimum factoring fee per invoice. You can upload a $200 invoice, a $2,000 invoice, or a $20,000 invoice all through the same system. 

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7. What is the minimum contract duration with your factoring company?

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Our standard agreement is one year.

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8. What is the termination notice period? And what is the termination fee? ‍

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Denim’s standard agreement begins with a 12-month term and renews annually. A 30-day notice is required to exit, and early termination incurs a fee of 10% of volume to cover administrative and UCC filing costs.

9. What is the ACH transaction fee? 

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We do not charge any ACH deposit fees. This is a free service for Denim users. 

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10. What is the daily cut off time for funding?

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Invoices submitted by 12:00pm EST are guaranteed a next business day  payment. Denim’s Quick Pay is between 1-2 business days. 

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11. What TMS programs is your company integrated with? 

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We offer direct integrations with AscendTMS, EZloader, Turvo, EKA, Zuum, Logistically, Port, Quote Factory, and TAI TMS.

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If there is a particular TMS you love working with feel free to let us know and we’ll work with you to build the integration. 

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12. Do you complete a credit check process for shippers? If so, is there a credit check fee? 

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Yes, we offer unlimited free credit checks for your shippers. No fees ever.  This is part of our robust customer validation support and services helping to protect our businesses from fraud. 

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13. Are there any hidden fees or charges? 

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No hidden fees and no additional charges for any of the features.

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14. Do you provide back-office automation and assistance? 

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Denim’s broker-first design makes day-to-day operations more efficient. Reduce incoming calls by providing carrier transparency with automated payment notifications. 

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Our TMS and QuickBooks integrations reduce time spent on tedious back-office activities,  freeing up staff to focus more on customer & carrier relationships.  

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15. Do we get a dedicated account manager? 

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Yes, every Denim customer is partnered with a dedicated account manager who will walk you through the dashboard,  answer any questions, and even help you upload your first invoice to prevent any payment delays. 

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16. Does Denim (or its subsidiaries) own any trucks? What about a freight brokerage license or  motor carrier license? 

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No. We are dedicated to providing customers with new and innovative technology that advances their business operations through automation and smart decision-making. 

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17. Do you provide fuel advances for carriers?

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No. 

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18. Do you provide EFS payment services? 

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No

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19. When will I see a copy of your notice of assignment and factoring contract? 

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These will both be included in a sample contract you will receive from an Account Executive during your registration process. 

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20. What happens if a carrier's payment is more than what Denim will advance? 

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We will always make sure your carrier gets paid in full first.  Denim cannot factor a job if the contracted carrier price exceeds the total load value, minus the fee based upon your factoring rate. 

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For example: 

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You are a Denim client with a factoring rate of 1.3% (you savvy negotiator you). You have a $10,000 load that needs to go from Dallas to Chattanooga. And you find a carrier that agrees to take the load for $9,500.    

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Denim will advance your carrier the full payment of $9,500 when you factor the load through our Freight Payment System. This leaves you with $500. At a 1.3% factoring rate, the cost to factor this load is $130. Remember - cost to factor the load is calculated based on the total load value.  

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After Denim receives the collections from your shipper, we take our fee of $130, and pass along the remaining $370 to you. This is your $370 profit, which is released on the subsequent Friday after the collection was made from the shipper. 

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A Freight Payment System (FPS) is a specialized tool for freight brokers that streamlines the process of paying carriers, credit checking customers, invoicing freight charges, and reconciling payments between shippers, carriers, and other parties involved in the transportation of goods. Freight Payment Systems are one of many key components to a robust freight tech stack. 

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The emergence of Freight Payment Systems has leveled the playing field for freight brokerages. Once the domain of only larger entities, Freight Payment Systems are now being used by freight brokers with a growth mindset – such as SmartBrokers – that need an integrated digital system to compete in today’s marketplace. 

Key functions of a Freight Payment System 

A FPS streamlines and automates manual tasks throughout the full life cycle of a load, including: 

• Customer credit checking
• Flexible financing options including factoring, cash, lines of credit 
• Invoice receipt and verification 
• Invoice audits 
• Carrier payments, scheduled based on term agreements and with a QuickPay option
• Detailed reporting on financial aspects of business

What are the benefits of a Freight Payment System?

Freight brokers with a growth mindset and eye on the continuous evolution of the logistics industry know how to intelligently leverage their FPS to optimize and streamline business operations. There are several benefits to using a FPS, including:

Improved carrier relationships

A carrier dashboard reduces the number of check calls a brokerage receives by enabling carriers to track the progress of their payments and ACH receipts. By providing accurate, timely payments to carriers, a FPS can help to improve relationships with these important partners.

Increased efficiency with automation 

Freight brokerages should be focused on building and maintaining relationships, not chasing down invoices and fielding daily (sometimes hourly) calls from carriers looking for payment. Automating manual financial tasks reduces the time and effort freight brokers spend on billing & invoicing, payment processing, and financial reporting. This helps businesses save time and money, and frees up resources to focus on other revenue-generating aspects of the business.

Enhanced business visibility and reporting 

Freight Payment Systems provide real-time information on financial transactions and balances, giving freight brokerages better visibility into the financial health of their business. With all financial transactions stored in one centralized location, it becomes easier to report on financial activity allowing for more efficient record-keeping, compliance reporting, and awareness of the health of the business. Freight brokers are able to  make more informed decisions about their business strategy and identify key areas for improvement.

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Integrated tech stack

Avoid switching between multiple systems, and make life easier on you and your team to track and manage data. Freight Payment Systems often integrate with other software solutions, such as accounting software and transportation management systems, to provide a more seamless experience for managing business tasks. .

Built-In security

Freight Payment Systems include robust security features to protect sensitive financial information and prevent unauthorized access. Brokers can store important data, such as carrier banking information, in a single location eliminating the security risks associated with maintaining this information in-house. Freight Payment Systems ensure the safety of financial data and a freight brokers’ book of business, and reduce the risk of fraud or other security breaches.

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Flexible financing options 

Freight Payment Systems provide flexibility to brokers when it comes to selecting the best financing option for each load. Freight brokerages can toggle between self-funding a load or factoring. When using a FPS, brokers are in full control of their finances without limiting terms and contracts. 

Who uses a Freight Payment System? 

Freight Payment Systems can benefit freight brokerages of all sizes whether they are managing 10 or 100,000 loads a month. 

Scaling freight brokerages on the cusp of hiring back-office staff, like accounting or invoice managers, are uniquely positioned to implement a FPS into their freight tech stack. A FPS can reduce the number of headcount needed to manage invoicing, payments, and manual document upload. Brokerages can instead redirect that employee headcount to revenue-generating roles and activities. 

How Long Does it Take to Implement a Freight Payment System?

Ultimately, it will depend on a freight brokerage's current technology stack, the number of loads and carriers, and the type of financing being used. 

Most Freight Payment Systems require an application including MC numbers, owner information, articles of incorporation, and banking setup to facilitate payments. The application can take 5-10 minutes. 

The application is then reviewed by the Freight Payment System for several factors including business liens, violent crimes, and active MC in good standing with FMCSA. This process can take 1 to 2 business days depending on when you send in the application. 

Once approved, freight brokers are invited to schedule a 30 minute call to set up the dashboard and walk through the first job submission. 

For larger freight brokerages looking to integrate their systems, it can take an additional 1-2 days to sync and populate the data across platforms. 

In all, implementing a FPS depends on the complexity of your technology stack and size of operations. Most freight brokerages can implement a FPS in under a week with little disruption to business. 

Freight Payment System: Your Key to Being a SmartBroker

As the logistics industry continues to adopt technology, a FPS is an essential tool for almost every freight broker. 

From enterprise freight brokerages to growth brokers, a FPS will help with: 

• Save time on manual processes with automation
• Reduce human errors and security risks
• Access to flexible financing from factoring to self funding 
• Financial reporting and business health visibility 
• Make data-driven decisions

If you are in the market for a FPS, a representative can walk you through Denim's platform and financing options. 

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SmartBroker

/smärtbrōkər//

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Noun

noun: SmartBroker; plural noun:SmartBrokers/SmartBrokerage

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Modern freight broker that makes use of advanced technologies and business practices

1. Freight expert with a growth mindset who implements the most advanced technology, develops the deepest relationships and pursues operational excellence.

“Those SmartBrokers are always outperforming the market."

2. A change agent who defines and embraces the wave of transformation in the logistics industry.

"The brokerages that will survive in 2023 are the SmartBrokers"

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The Supply Chain continues to evolve and new technologies are emerging every day challenging long-held standard operating procedures. Freight brokers need to stay up-to-date with industry trends and consider whether they are operating as efficiently and effectively as possible. Brokerages with a growth mindset are transitioning to a SmartBroker model in the face of unprecedented challenges within the freight and logistics industry. 

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What is a SmartBroker?

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A SmartBroker is a modern freight broker that makes use of advanced logistics technology and business practices.  They are experts with a growth mindset who leverage that tech for operational excellence - creating deep relationships. And they are comfortable with change, not only embracing the industry transformation, but actively pursuing it.

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SmartBrokers utilize advanced technologies and prioritize efficiency, transparency, and customer satisfaction within their operations. They leverage their tech stack to empower employees to be efficient through their daily tasks and operationalize these user-friendly platforms to allow shippers to easily work with their brokerage.  SmartBrokers use data analytics tools to optimize routes and negotiate the best rates with carriers, and may even find ways to use artificial intelligence to automate certain aspects of the booking and dispatch process. Oftentimes, SmartBrokers have a strong online presence, engaging, sharing and learning with the community on social channels and dedicated freight & logistics groups.  This is part of the growth-mindset that every SmartBroker has. 

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But SmartBrokers are more than just tech-savvy intermediaries. They also place a strong emphasis on effective communication with both their customers and carriers, ensuring that all parties have timely and accurate information throughout the shipping process. Rather than focusing on one-off transactions, SmartBrokers prioritize building long-term partnerships with both shippers and carriers.

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Shippers, now more than ever, are looking for reliable brokers to build long-term relationships with, and freight brokers who are quick to adopt this new methodology will be the ones who ultimately win out against those that fail to adopt and evolve.  And it's the SmartBroker, the modern, forward-thinking freight broker that utilizes advanced technologies and prioritizes efficiency, transparency, and customer satisfaction in their operations – that will win these shippers’ hearts. 

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SmartBrokers help increase efficiency and cost savings for their shipping customers by leveraging an intelligent logistics technology stack, with data analytics tools that help to optimize routes and negotiate the best rates with carriers. They also prioritize transparency, providing real-time updates and information to their clients and carriers, which helps to build trust and long-term partnerships. The goal of a SmartBroker is to deliver a seamless and efficient freight brokerage experience that exceeds the expectations of both their clients and carriers. (Easier said than done.)

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The Difference Between Traditional Brokers, Digital Brokers, and SmartBrokers

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All freight brokers, sometimes known as a third-party logistics provider or 3Pl, act as intermediaries between shippers and carriers, negotiating rates and arranging shipments on behalf of their clients. Freight brokers have a deep understanding of the transportation industry and are skilled at finding the best carriers for a particular shipment based on factors such as price, availability, and delivery time.

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SmartBrokers differentiate themselves from traditional brokers and digital marketplace brokerages as responsive and modern partners for shippers – offering an unparalleled customer service from blending new business technology with human professionalism. 

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Traditional freight brokers may not have the same level of technological capabilities or emphasis on carrier satisfaction. They may also be more rigid in their business practices and less adaptable to changing market conditions.  Traditional freight brokers have been around for many years and typically operate through a network of established relationships with carriers and shippers. They might rely on manual processes, such as phone calls and faxes, to communicate with their clients and carriers and negotiate rates.

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While digital marketplace brokerages like UberFreight have revolutionized the way that freight is booked and coordinated, they operate on a different model than traditional brokers. Digital marketplace brokerages act as facilitators, connecting shippers with carriers who have available capacity, but lack the traditional levels of human interaction and relationship building that is critical for long-term growth within the industry.   

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In contrast, SmartBrokers are agile and flexible, with the ability to quickly adapt to new technologies and changing customer needs. SmartBrokers take a more proactive approach towards building their business, actively seeking out the best options for their clients and negotiating rates with carriers on their behalf.

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What Makes a SmartBroker Smart?

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All SmartBrokers possess 4 key traits that set them apart from the pack. 

1. Growth Mindset
2. Advanced Technology
3. Deepest Relationships
4. Operational Excellence

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These pillars are the foundation for any freight brokerage evaluating themselves and their journey to fully embracing modern SmartBroker best practices. 

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Growth Mindset

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SmartBrokers know that every contract is not guaranteed, so they are obsessed with constant improvement and growth. They are in the constant pursuit of differentiating tools and strategies to win new contracts or build upon existing contracts. Market shifts like digital, real-time, flexible, just-in-time business models are not roadblocks but instead springboards for new opportunities. 

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Advanced Technology

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Implementing a best-in-breed, fully-integrated freight technology stack enables SmartBrokers to harness the power of complementary tools. Jobs effortlessly move through their technology ecosystem from preload tools like CRM and TMS to post-load tools like Freight Payment Systems.

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Deepest Relationships

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The freight and logistics industry is built on relationships. SmartBrokers understand this deeply and are laser focused on creating meaningful interactions with all parties. By eliminating transactional communication and leading with empathy, SmartBrokers provide stellar service to carriers and shippers alike. 

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Operational Excellence

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Operational excellence is the back-bone of SmartBrokerages, enabling them to move quicker and smarter. Intelligent automation is deployed across a SmartBroker’s operating model to create a highly efficient and low-error set of services.  

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Why Become a SmartBroker Now?

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According to IBIS the whole freight broker market has grown ~6% per year over the past 4 years and is expected to grow ~2% this year.  Individual freight brokerages are seeing larger swings in their growth rates as they compete for market share. 

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The transportation industry continues to evolve, so it is important for freight brokers to consider whether they are operating as efficiently and effectively as possible, and whether transitioning to a SmartBroker model could benefit their business. Embracing advanced technologies and prioritizing efficiency, transparency, and customer satisfaction means that freight brokers can position themselves for success in the 21st century. The evolution for all freight brokers to SmartBrokers is an important step towards a more efficient and effective industry.

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Benefits of Being a SmartBroker

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‍Increased efficiency:

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Utilizing advanced technologies and data analytics tools, SmartBrokers optimize routes and negotiate premium rates with carriers, resulting in increased efficiency and cost savings for their clients. A SmartBroker might use real-time traffic data to select the most efficient route for a shipment, a Freight Payment System to streamline and manage the payment & invoicing of carriers & shippers, or an integrated TMS to automate certain aspects of the booking and dispatch process.‍

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Improved transparency:

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‍SmartBrokers prioritize transparency in their operations, providing timely (and automated) status updates and information to their customers and carriers. When all parties have a clear understanding of the shipping process, it helps to build trust and establish long-term partnerships that are profitable for everyone.‍

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Enhanced customer satisfaction:

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‍A user-friendly platform and effective communication is table stakes today.  SmartBrokers are able to deliver a seamless and efficient shipping experience that exceeds the expectations of their clients. The increase in customer satisfaction creates loyalty, as well as helps to establish a stronger reputation in the industry.‍

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Greater adaptability:

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‍SmartBrokers are agile and flexible, with the ability to quickly adapt to new technologies and changing customer needs. The natural desire to stay ahead of the curve and respond to shifts in the market helps ensure that they are operating as efficiently and effectively as possible.‍

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Increased competitiveness:

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‍By embracing the principles of a SmartBroker, freight brokers can differentiate themselves from traditional brokers and digital marketplace brokerages, positioning themselves as leaders in the industry.This helps to attract new customers and build long-term partnerships with like-minded shippers and carriers, leading to increased competitiveness and success.‍ 

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Steps to Becoming a SmartBroker

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1. Assess your business model and technology stack.

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Identify gaps against industry SmartBroker best recommendations (below) and success stories. 

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Take stock of your existing business and operations today. Where are your strengths and weaknesses?  Are there bottlenecks in your processes? What could be made more efficient with technology?

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Assess your tech stack and each component to ensure interoperability.  Try to reduce existing manual processes and avoid adding new ones.  Remember to keep in mind efficient work distribution for every system and individual using the systems.

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Reach out to peers and advisors to ask questions and understand best practices.

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2. Create goals and source vendors

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Identify your long term vision and set achievable steps along the path towards it. Source vendors and design target state model along with a change management plan to achieve your goals of tech stack and operational improvements

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Launch vendor evaluations for tech stack improvements

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Build a change management plan for operations improvements

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3. Launch new technology  and “go-live” with processes

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With your technology and tools in place, it's time for the work to begin.   Design your change plan. Build a timeline. Phase in your changes and execute on the plan!  Easier said than done, but if you’ve gotten this far it is clear you are a lunch pail carrying, walk-the-walk, nose to the grindstone, rubber meets the road SmartBroker.  You’re our kind of SmartBroker

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4. Continue to evaluate

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Continue to evaluate opportunities for improvement and plan steps for your ongoing evolution.   The industry is changing in such amazing ways, and SmartBrokers know that there are always new ways to grow and improve their business to be a leader in the space.

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What Does a SmartBroker Tech Stack Look Like?

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Every freight broker is different, but in general a SmartBroker will have a freight tech stack that consists of a mix of the following platforms & services.

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TMS

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A Transportation Management System (TMS) is a software application that empowers brokers to plan, create, manage, and analyze freight load jobs. A TMS offers visibility into day-to-day transportation operations, trade compliance information and documentation, and helps ensure the timely delivery of freight. Some advanced Transportation Management Systems include track and trace services – enabling real-time information exchange from the SmartBroker with carriers and shippers.

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Examples of freight broker TMS systems that a SmartBroker might use: Aljex, EKA, MercuryGate, Tai TMS, Turvo, Quote Factory

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Accounting Software

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SmartBrokers use accounting software for accepting business payments, managing and paying bills, and other assorted payroll functions. Benefits include:

• Streamlined financial reporting.  SmartBrokers can generate financial reports, such as income statements, balance sheets, and cash flow statements, based on the data entered into the system. This makes it easy to understand financial performance and make informed business decisions.
• Track and manage expenses, such as fuel costs, driver pay, and other operational expenses. This can help brokers to better understand and control their costs, and make adjustments as needed to improve profitability.
• Manage taxes and tax compliance, which  is an important aspect of any business, especially for freight brokers. Accounting software can help in calculating, tracking, and paying taxes.

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Examples of freight broker account software that a SmartBroker might use: Quickbooks, Xero, Sage, Oracle

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Carrier On-Boarding & Safety Compliance

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Carrier on-boarding is the process of bringing new carriers (or transportation providers) into a company's network. This process typically includes a review of the carrier's safety compliance records, insurance coverage and other qualifications,  to ensure that the carrier meets the company's standards for safety and compliance. Safety compliance refers to the adherence to regulations and industry standards related to transportation safety, such as the Federal Motor Carrier Safety Administration (FMCSA) regulations in the United States. 

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• Compliance management software: These systems are specifically designed to help SmartBrokers manage compliance with transportation regulations from the FMCSA, or the DOT.  The software typically includes features such as automated compliance checks – which compares a carrier's compliance records against the relevant regulations, and compliance dashboards – which provides an overview of a carrier's compliance status.
• Safety management software: SmartBrokers use these systems to manage safety-related aspects of their transportation operations, such as driver training and safety audits. The software typically includes features such as online training modules, – which allow drivers to complete required training remotely, and automated safety audits – which can be used to evaluate a carrier's compliance with safety standards.

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Examples of freight broker carrier on-boarding & safety compliance systems that a SmartBroker might use: Highway, MyCarrierPortal

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Capacity Management 

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Capacity management is a data-driven software that helps SmartBrokers find and book the best carriers with the most efficient loads at the right moment. With capacity management software, Smarbrokers are able to expand capacity, scale bandwidth, and grow their business.  Capacity management helps to encourage carrier re-use and better carrier relationships, empowers your broker team to be more efficient and effective in their daily work, and higher and more profitable customer win rates. 

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Examples of freight broker capacity management systems that a SmartBroker might use: Parade, Descartes Macropoint, FreightFriend, Logistyx

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Customer Acquisition (Sales & Marketing)

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Freight brokers use a variety of customer acquisition software and information sources to help them identify and connect with potential clients.

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Lead generation software, which helps brokers identify and track potential clients and leads.

• Zoom Info
• LinkedIn Navigator
• Thomasnet.com

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Marketing automation software, which helps SmartBrokers automate repetitive tasks such as sending out email campaigns and managing social media accounts.

• Hubspot, MailChimp, ConstantContact

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Sales software, which helps SmartBrokers manage their sales pipeline and track progress towards sales goals.

• Salesforce, Hubspot, SugarCRM, Zoho

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Additionally, staying connected with key industry resources is crucial to staying informed and relevant when discussing new business opportunities. 

• Trade Shows
• TIA Membership
• FreightWaves Sonar Data (stay on top of industry trends)

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Rate Pricing & Quoting System 

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SmartBrokers can manage and automate the process of obtaining rate quotes from carriers, and then using that information to create and send quotes to their own customers. This type of software typically includes tools for managing carrier relationships, tracking market trends and pricing data, and generating quotes based on a variety of factors such as shipment size, distance, and delivery time. Some systems may also include features for tracking and managing customer relationships, including tracking customer-specific pricing and terms. SmartBrokers use Rate Pricing & Quoting Systems to streamline and increase the overall efficiency and accuracy of the pricing and quoting process, which can help to increase profitability and improve customer satisfaction.

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Examples of freight broker rate pricing & quoting systems that a SmartBroker might use: Greenscreens.ai, CollaboRATE, CargoChief

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Load Boards/DFM Marketplaces

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Whether we like it or not, all brokers must be masters of these systems.  They allow freight brokers to post available loads and search for available carrier capacity. Load board software typically includes features such as load matching, carrier rating, and messaging, which allows SmartBrokers to communicate with carriers and negotiate rates. Digital Freight Matching marketplaces lets brokers to filter loads by specific criteria, see pre-posted rates, and book these loads right away.

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Examples of freight broker Load Boards/DFM Marketplaces that a SmartBroker might use: DAT, Truckstop, 123 Load board

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Tracking Visibility

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This software provides SmartBrokers with  real-time visibility into the location of shipments, as well as other important information such as delivery status, estimated time of arrival, and any delays or issues that may arise. This information can be used to improve communication with customers and ensure that shipments are delivered on time and in good condition. Additionally, freight broker tracking visibility software can help to improve the efficiency and productivity of SmartBrokers by automating many of the tasks associated with tracking and monitoring shipments.

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Examples of freight broker tracking visibility systems that a SmartBroker might use: Samsara, Fleetio, Trucker Path

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‍Freight Payment System 

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A Freight Payments System (FPS) is a specialized tool for SmartBrokers that streamlines the process of paying carriers, credit checking customers, invoicing freight charges, and reconciling payments between shippers, carriers, and other parties involved in the transportation of goods. Freight payment systems are one of many key components to a robust SmartBroker freight tech stack.

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‍A freight payments system streamlines and automates manual tasks throughout the full life cycle of a load, including: 

• Customer credit checking
• Flexible financing options including factoring, cash, lines of credit 
• Invoice receipt and verification 
• Invoice audits 
• Carrier payments, scheduled based on term agreements and with a QuickPay option
• Detailed reporting on financial aspects of business

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Example of freight broker Freight Payment System that a SmartBroker might use: Denim

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Are you a SmartBroker?

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2024 is the year of the SmartBroker.  As our industry continues to evolve, Denim is here to support the brokers, carriers, and shippers who are moving it forward.   Get in touch with us today to discuss how a Freight payment System would benefit your specific operation. Or speak with a SmartBroker expert to get a better understanding of what the future holds for freight, logistics, and the greater supply chain. Freight brokers have been around for decades, but in recent years, the industry has seen the rise of a new type of brokerage - the SmartBroker.

We are in a trucking recession and its impacting the whole industry.

Consumer demand is lower and profits are thin. And unfortunately, the freight industry outlook for 2024 does not look ideal. 

Shippers remain in control with more market power than they did in 2022 causing carriers and brokers to negotiate contracts to maintain volume.

With the right strategies in place, you can weather the down market and come out even stronger on the other side. 

In this blog post, we'll cover 10 things that you should keep in mind during the trucking recession. From staying up-to-date on market rates to embracing technology, these tips can help you navigate the challenges of a loose market and come out on top. So if you're a freight broker looking to stay afloat, read on for some things to keep top of mind. 

1. Stay informed of market changes 

Economic conditions can have a significant impact on demand for shipping and transportation services. This can affect the rates that you are able to negotiate with carriers, as well as the availability of capacity. 

By staying informed about market conditions, you can make more informed decisions about which carriers to work with, lanes to prioritize, and how to price services. 

There are several ways to stay up-to-date and keep a pulse on the market. 

• Monitor industry news and trends: Follow news sources like FreightWaves, The Freight Coach Podcast, Transport Topics, and Truckers Forum.
• Use data and analytics tools: Software tools help you track market conditions, such as supply and demand trends, carrier rates, and shipping volumes.
• Monitor business performance: Key business metrics like average days sales outstanding and fastest or slowest paying customers can give you a snapshot of business health. With regular monitoring, you can make any necessary adjustments to your operations.  
• Talk to carriers and other industry partners: Proactively engage carriers and other partners in industry discussions to gain valuable insights and perspectives on market conditions.

2. Diversify your customer base 

Diversifying your customer base is not only good business advice, but critical in today’s market. 

Relying heavily on a single customer or a small group of customers can put your freight brokerage at risk. If that customer goes out of business or significantly reduces their shipping volume, it could have a major impact on your revenue and cash flow. 

A diverse customer base provides your freight brokerage with a more stable source of revenue and you are less reliant on any one customer or even industry. This can help to ensure the long-term viability of your business.

3. Don't be afraid to negotiate.

During economic downturns, demand for shipping and transportation services decline, which can lead to excess capacity in the market. This can put downward pressure on rates and hurt your bottom line. 

Contracts and rates put in place during different freight conditions should be re-evaluated during a freight recession. Are there new terms that could be favorable to both parties in today’s economy? By renegotiating rates with carriers, clients, and partners, you may be able to secure more favorable terms and improve margins.

However, it's important to maintain good relationships with your carriers and to be fair and reasonable in negotiations. When the freight market picks up and you need to move freight, you’ll be thankful for those strong relationships.  

4. Keep an eye on expenses

Three quarters of freight brokers use accounting software like QuickBooks, Freshbooks, or NetSuite according to our recent report. This year, you will likely be getting more familiar with those platforms. 

In this environment, it is especially important to control expenses and keep them as low as possible. Regularly checking on expenses and revenue help mitigate any surprises and help you make the best decisions in terms of expense cutting.  

This may involve negotiating higher rates with shippers,  lower rates with carriers, or streamlining operations to dedicate more employee time to revenue-generating activities. By taking a proactive approach to cost management, you can increase your chances of weathering the economic storm and emerging on the other side.

5. Look for new opportunities

A recession can also bring about new opportunities otherwise not considered.

In a downturn, some segments of the market are less affected than others. For example, rising inflation is shifting consumer spending from consumer technology, clothing, and cosmetics spending to necessities like groceries and household goods. The shift in demand could mean new business for your freight brokerage. 

Similar to change in demand, more manufacturers and companies are reshoring or nearshoring in 2023. Production is moving away from Asian countries to the Mexico/U.S. border or within the U.S and 62% of manufacturers have already begun the process, according to Deloitte's Future of Freight Research. Respondents of the survey expect agriculture, apparel, and consumer electronics to see supply lines being reconfigured the most. 

This trend will redraw the transportation map generating new lanes and opportunities for your brokerage. 

By identifying high-demand markets and new production regions, your brokerage can create new opportunities for your brokerage. 

6. Embrace technology

Not utilizing technology in today’s market is a grave mistake. 

Software and online platforms support almost all facets of a business from streamlining operations to improving customer support. 

Transportation management systems, digital freight matching, accounting software, and financial enablement platforms (like Denim) can help your freight brokerage run smoothly. But to get the most out of them, evaluate your tech stack for integration opportunities. When systems work cohesively, your freight brokerage can reduce hours of manual entry. 

For example, Denim integrates with TMS systems like TAI, EZ Loader, and Ascend enabling freight brokers to book loads and submit for invoicing and collections with a single click.

Developing the right tech stack for your freight brokerage can not only support your business but optimize it for success this year. 

7. Stay in touch with your clients 

Good communication is key during a loose market. Providing a white glove service can be the difference between winning a new lane or being cut. 

Regular communication with clients helps build trust and establish long-term partnerships. This includes sending progress updates on a shipments pickup, transit status, delays, and delivery. An open line of communication makes asking for additional business or referrals easier on both sides. 

A client relationship does not end when a shipment is delivered. Your freight brokerage should promptly invoice clients with a professional and clear document detailing the shipment. This can be handled by automation and should not be done sloppily. Post-shipment is also a great opportunity to ask clients for feedback or leave a review for your business.  

By staying in touch with clients, you build a rapport and have the opportunity to identify opportunities to improve your service.

8. Be proactive

Competition is going to be high this year. And the truth is, not everyone will make it. Those that put in the effort will not only survive the downturn and emerge resilient for years to come. 

By being proactive, you can identify new opportunities to grow your business, such as by expanding into new segments or markets, offering new types of services, or embracing new technologies. Proactiveness will likely put your brokerage ahead of the competition and improve responsiveness to changes in the market. 

Ultimately, being proactive is an important part of building a successful and sustainable business in the long term.

9. Get your mindset right

It's easy to get discouraged during a loose market, but try to stay positive and focus on the long-term. Remember that economic downturns are usually temporary and the market will eventually bounce back.

In fact, positivity can be a business advantage. 

A positive attitude can also help you build strong relationships with clients, carriers, and other industry partners. By remaining positive and optimistic, you can inspire confidence and build trust, which can be critical to your success.

Positivity breeds creativity. By approaching challenges with a can-do attitude, you can be more open to new ideas and more likely to find innovative ways to overcome obstacles.

10. Seek support

Good news: this isn’t the first-ever freight recession. 

Many freight brokerages survived the 2019 recession, and are willing to help new and growing brokers. So don’t be afraid to reach out to industry groups or seek the advice of a mentor or colleague. 

Industry organizations can provide valuable resources and support, such as industry news and analysis, access to networking events, and professional development opportunities.

The freight and logistics community is eager to help one another. Remember, you are not alone and  have a range of options available to you to help navigate the challenges of an economic downturn.

Whether you are a 100-person freight brokerage or a new broker, we are all feeling the effects of the freight recession and this year will not be easy. However, with challenges come new opportunities to diversify and try new strategies. Through this loose market, your freight brokerage will emerge stronger and more resilient than in 2023. Remember to seek new opportunities, keep expenses low, and maintain a positive outlook. 

Welcome to 2023! As we begin the new year, it's important for freight brokerages to stay ahead of the latest industry trends. Here are 8 predictions that freight brokerages should keep an eye on in the coming year. From the increasing adoption of technology to the evolving regulatory landscape, these trends will shape the way freight brokerages operate and compete in the market. Freight brokers that are looking to improve, become smarter, and embrace these trends will not only survive but thrive in the competitive and constantly evolving market of 2023.

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Prediction: Look towards diversifications, consolidations, and advancement in middle mile visibility & technology.

In recent years, shippers all over have been turning to regional final mile carriers to increase efficiencies in their supply chain. Now, many of those same brands will look to do the same with their middle mile. Diversifications, consolidations, and advancement in middle mile visibility & technology will play a big role in 2023. 

This could involve shippers partnering with a wider range of regional carriers to increase efficiency and flexibility in their supply chain, or larger carriers expanding their middle mile operations to serve a greater number of shippers. Consolidation, on the other hand, could involve smaller carriers joining forces with larger ones to gain access to new markets or expand their capabilities.  Additionally, as stakeholders demand greater transparency and real-time tracking throughout the supply chain, companies will need to invest in technology solutions that can provide this level of visibility. 

‍Anthony Curreri

Founder & Chief Executive Officer at Roadly Logistics

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Prediction: Connected platforms and ecosystems in supply chain logistics will begin to gain mind-share in 2023 - affecting everything from network design and management, to payments.

With the announcements of AWS Supply Chain, and Microsoft Supply Chain Platform, and similar initiatives underway at Google Cloud Platform and Oracle, more people and organizations in supply chain logistics will begin to see the potential for connected platforms in logistics to create immense value for beneficial cargo owners. It will take time for such platforms to reach full maturity, but in a world that is becoming more volatile, uncertain, complex, and ambiguous, beneficial cargo owners need to participate more directly in managing their freight and logistics supply chains from end-to-end - that will serve as an accelerant for the development of such platforms AND it will be a boon for logistics technology startups with mature products that solve specific problems that the big tech behemoths can't solve.

‍Brian Laung Aoaeh, CFA

Founder & Managing General Partner, REFASHIOND Ventures

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Prediction: The truckload market will remain stressed through the first half of 2023, but it's still a great time to be a broker. 

The benefit of brokerage is that it's always an optimal market for growth. When supply is tight, brokers have the ability to drive volume to good, reliable carrier partners. In a market flush with excess capacity, brokers fill the need of pairing high volume shippers with the right carriers. The pricing strategies change, but the value remains balanced between strong carrier and customer relationships. 

Additionally, now is the perfect time to diversify your mode mix. We're seeing LTL carrier rates beginning to fall and the focus shifting to volume. Brokers offering both TL and LTL options can minimize revenue impacts during a down market. 

‍Brandon Dean

Vice President Sales at Quote Factory

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Prediction: Higher expectations for visibility.

From the driver to the customer, supply chain stakeholders have higher than ever standards for what they expect in terms of visibility. In 2023 this standard will only increase. The market wants insight into supply chain movements and technology partners will have to rise to the occasion. This includes real-time tracking of shipments, updates on delivery status, and access to information about the location and condition of goods. 

To meet these higher expectations, freight and logistics companies will need to leverage technology to provide stakeholders with the visibility they demand. This may involve implementing tracking systems, investing in advanced software solutions, or partnering with technology providers who can offer the necessary visibility tools.

‍Jayson Peterson

Vice President of Strategic Alliances, Turvo 

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Prediction: Freight brokerages will focus on operations to mitigate supply chain volatility.

To better manage supply chain volatility, companies must prioritize lead time management, cycle time reduction, and visibility and collaboration in 2023. Lead time — the amount of time a broker gets before the ship date of a load — is critical. The more lead time a broker secures on a shipment, the better the rate and service for the customer. 

Having a transparent, efficient process for load cycles and over-communicating will allow companies to handle volatility more effectively. For example, a broker should explain a rate change for a same-day shipment in a market with limited capacity. GPS tracking also encourages visibility and more efficient collaboration, eliminating the back-and-forth between shippers and broker agents trying to determine a truck’s location for pick up or delivery.

‍Ashley McMillan 

Senior Sales Manager at Denim 

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Prediction: Growing interest in cybersecurity. 

With industries focusing on digital transformation initiatives — particularly in the logistics sector — companies are increasingly susceptible to security and data risks. These aren’t sophisticated attacks, either. Bad actors are casting wider nets to capture sensitive information from many freight companies because they know they don’t have continuous security monitoring or employee cybersecurity training. In 2023, cybersecurity will come to the forefront of the freight-tech conversation. We will see large and even small freight brokers only partner with technology companies with cybersecurity protocols in place.

‍Sean Smith 

Head of Product at Denim

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Prediction: The rise of SmartBrokers empowered by broker tech stacks including financial enablement platforms, will put pressure on the entire industry to evolve.

SmartBrokers often have a strong online presence, with user-friendly and intuitive websites or platforms that allow shippers to easily book and track shipments. They may also make use of data analytics tools to optimize routes and negotiate the best rates with carriers, and might even utilize artificial intelligence to automate certain aspects of the booking and dispatch process. In addition to these technological capabilities, SmartBrokers prioritize effective communication with both their clients and carriers, ensuring that all parties have timely and accurate information throughout the shipping process.

Overall, the goal of a SmartBroker is to provide a seamless and efficient freight brokerage experience that exceeds the expectations of both their clients and carriers.

‍Fritz Lauer

Head of Marketing at Denim

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Prediction: Mergers and acquisition activity will increase in the freight space. 

“I expect we’ll see a significant influx of M&A activity next year, largely due to valuations being significantly down overall. It's an ideal time to buy companies at a lower price. The vast majority of the market is bleeding through its last round and will have a tough time raising its next one. In 6-12 months, we’ll see many flat and down rounds, forcing conditions to worsen before improving. Companies with sufficient cash flow or profitability will be well positioned to buy companies at a great price and supercharge their growth.

‍Bharath Krishnamoorthy

CEO at Denim 

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Freight and Logistics in 2023

2023 is shaping up to be a year of significant change and innovation in the freight and logistics industry. From the increasing adoption of technology to the evolving regulatory landscape, it's clear that the status quo is no longer sufficient for companies looking to succeed in this competitive and dynamic market.

The key takeaway for freight and logistics companies in 2023 is the importance of shifting conventional mindsets and developing solid supply chain and logistics strategies that align with the current landscape. This may involve embracing new technologies, partnering with innovative service providers, and continuously adapting to the changing needs and expectations of stakeholders.

Staying up-to-date on the latest trends and being willing to take calculated risks and make necessary changes is paramount for freight and logistics companies to position themselves for success in the year ahead. It is crucial for companies to stay agile and proactive in order to thrive in this exciting and rapidly-changing market.

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Freight brokerages were quick to adopt technology during record-setting COVID-19 demand. 

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But, the economy is in a very different place as we look towards 2023. Freight brokerages are facing plummeting spot rates, high inflation, and low consumer demand for goods. 

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Investing in freight broker technology, while previously an optional “nice-to-have”, is  now paramount for success in 2023. Savvy freight brokerages are prioritizing technology to survive and even thrive in a soft market. 

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FreighTech is playing a crucial role in maximizing efficiency, enhancing customer service, and bolstering competitiveness for savvy brokers already like Direct Expedite and Scale logistics, and will continue to for years to come.

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Improve Efficiency and Productivity with Automation 

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Anyone working in the logistics industry knows time is money. 

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Many brokerages were positioning their strategy for growth in 2023, but are now facing a reduction in personnel budget. In the absence of new employees brokers can rely on technology to boost productivity and efficiency within a team. 

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In fact, more than half (52%) of respondents in Denim’s Freight Brokerage Pulse Report indicated they are prioritizing increasing overall efficiency in 2023. 

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Automation and efficiency go hand-in-hand. Mundane tasks like creating and submitting invoices are ripe for automation. Freight brokerages are prioritizing automation technology to free up employee’s time for revenue-generating tasks while also boosting morale. Who really wants to be a data-entry machine? 

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Solutions like Denim streamline freight brokerages back-office operations through automation. With a single click from a broker’s TMS, Denim will invoice, collect, and pay contractors. Ultimately, the automation benefits shippers with consistent and timely billing, carriers with fast payments, and your staff with reduced data entry.

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Why does it matter in 2023? 

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Lower consumer demand equals less freight. Winning freight will require more prospecting hours, a winning sales strategy, and a large focus on building lasting relationships. By automating mundane tasks, brokerages can shift their focus to provide the best customer service while freeing up staff for more business-critical needs. 

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Enhance Customer Service with Visibility Software

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Customer service is what differentiates traditional freight brokerages from their digital counterparts. This is even more important in a shippers market. Customer service for brokerages means transparent communication with both shippers and contractors. 

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Knowing the status of shipments in real-time means everything for a brokerage. Freight visibility keeps customers informed while reducing time-consuming communications like check calls. 

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MacroPoint and Project44 are excellent examples of visibility platforms. Both platforms equip freight brokers with real-time updates on shipments and route information.  

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Brokers not only need to provide excellent customer service for their shippers, but also their preferred carriers. Shippers work with brokers with the largest and most reliable network of carriers.  

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Carriers are facing high diesel prices and maintenance inflation costs. Cash flow is tight right now. Freight brokers can keep carriers loyal and happy through transparent and fast payments. 

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Financial enablement platforms like Denim offer QuickPay at no cost for the brokerage. Freight brokers can choose to pay next-day at no cost or charge a quickpay fee to their contractors. 

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Additionally, Denim provides contractor onboarding and dashboard. Denim's onboarding collects payment and billing information from carriers in 3 simple steps. This eliminates the need for freight brokerages to manage or store sensitive information. After set-up, carriers can track payments and find proof of ACH on their own dashboard. 

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By providing these services, freight brokers can build trust, reduce carrier payment check calls, and provide a professional service to their carriers.  

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Why does it matter in 2023? 

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In 2022, the industry shifted from the carrier to a shipper market. Lower demand and a surplus of carriers means shippers have the opportunity to be more selective with their business. Providing a superior customer experience helps freight brokerages stand apart from the competition. 

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Staying Agile with Business Intelligence Tools

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There’s no doubt 2023 will be a competitive year for freight brokers. Many expect the spot market will bottom out in the first or even in the second quarter, but only time can tell. 

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Instead of a crystal ball, freight brokerages rely on data to identify the most lucrative shipping mode, loads, and rates. Real-time data arms freight brokerages with the information needed to  better respond to market fluctuations.   

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Through transportation management software freight brokerages can manage their operations more efficiently.  The platform manages a brokerage's shipment tracking, route planning, and payments when integrated with a factor.  Ascend, TAI, and EZ Loader are few examples of integrated TMS.

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During times of uncertainty, freight brokerages need to keep an eye on important business metrics. Metrics like accounts payables, receivables, and profits can show the health of a business.

Freight brokers can integrate their accounting software with a payments platform to track financials. No calculator needed 

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Denim's Quickbook integration provides freight brokers with a Business Analytics Dashboard. The dashboard compiles data on jobs over time, average days sales outstanding (DSO), fastest-and-slowest-pay customers, most profitable customers, and most used contractors. These insights help freight brokerages optimize operations and make better business decisions.

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Why does this matter in 2023? 

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Business intelligence tools help freight brokerage stay resilient in the face of uncertainty. Tracking trends and business health equip freight brokers with information to respond quicker to market changes and make data-driven decisions.  

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Are You Ready for the Growth of Freight Broker Technology?

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Many exciting developments have come out of the supply chain's digital adoption trend, but this is just the beginning. Experts anticipate further developments, such as blockchain-based shipment tracking. Leading freight brokers are already investing in tech strategies to stay ahead of the curve. 

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Not sure where to start with your technology shift? Begin by pinpointing key opportunities to scale, reduce costs or improve profitability for your brokerage. The chances are that an enterprise software suite exists to help you achieve your goals. 

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If you're interested in learning more about how Denim can streamline your operations, we’d love to talk. Schedule a demo today!

Access to working capital is not the only benefit of freight brokerage factoring. 71% of brokerages making $2 million or more in monthly revenue use invoice factoring, according to our recent report. Even enterprise brokerages, who likely don’t need working capital, choose to factor.

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Why? 

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Because factoring for freight brokerages provides protection against partnering with risky shippers and improves carrier reputation. 

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Protecting your brokerage relies heavily on operating with a solid reputation. It only takes one customer that can’t pay their invoices to dry up your network.

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The better your reputation, the better partnerships you'll obtain. The freight market is soft right now. You can't afford to work with the wrong shippers or lose trust with carriers.

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You need to grow a big network of qualified shippers and carriers so that you're ready for anything. Denim can

help you do that faster and more effectively. ‍

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Vet Your Shippers

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Unfortunately, freight brokerages are not immune to scams (like double brokering), fraud, and deception. You want to make sure you’ll receive payment before booking a load or contracting a new lane.

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When your network consists of shippers with bad credit, your entire business becomes vulnerable.  Payment recovery issues can hinder your growth and ultimately hurt your image. 

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It only takes one non-payment from a shipper to undo a strong carrier network. 

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While due diligence helps, it can only mitigate some risk for your freight brokerage. Factoring with Denim protects brokerages with unlimited shipper credit checks.

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Denim's Solution

• Denim offers free, unlimited shipper credit checks, so you can assess the risk. 
• You can rest easy knowing you’re protected with unlimited shipper credit checks on all your prospects.

“Denim’s underwriting helped SCALE Logistics take the risk out of her business by credit checking her customers. Shay Lynn Dixon said ‘it’s like having your own CFO.’”

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Lower Your Days to Pay

High diesel prices and inflation costs are straining carriers profits and business. 

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Carriers are going to prefer brokerages that pay the fastest, regardless of your shippers terms. No one likes chasing down receivables, and slow payments will inevitably cause your carriers to lose trust. The net-30 days of the standard of the past is obsolete in today’s digitized environment.

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Factoring for freight brokerages can lower their days to pay carriers without impacting cash flow. Carriers will learn that you’re an honest and reliable broker and be more willing to work with you. 

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Not only does lower days to pay strengthen carrier relationships, it improves your credit. Staying as up-to-date as possible makes life easier for you and your carrier network. The logistics industry is big, but your corner of it is likely small enough that everyone talks, so prioritize performance that boosts reputation over anything else.

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Denim's Solution

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Nobody should have to waste time getting paid for a job well done. That's why Denim helps you lower your days to pay to as little as 24 hours. 

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Denim offers all clients free QuickPay, which means carriers are funded within 24-48 hours. There's no cost to you for the use of Denim's QuickPay service. Brokerages can choose to offer this service for a fee to carriers or not. 

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“Since working with Denim, Direct Expedite has become known as ‘the guys who pay their carriers within 48 hours of delivery.” 

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Grow Your Qualified Carrier Network

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Shippers want to work with freight brokerages with a strong and reliable carrier network. So in order to obtain new business, you need to grow and maintain a qualified carrier network. 

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Growing a carrier network doesn’t happen overnight. But how do you do that optimally?

There are thousands of brokers that carriers can decide to work with, so it’s important to emphasize your value. 

• Humanize your brand by sending holiday gifts and checking in on carriers' wellbeing. 
• Specialize in a niche market for a unique connection with carriers. 
• Be transparent on payment status by offering a contractor dashboard.

 As a growing freight brokerage, getting carriers to work with you over the competition is a huge obstacle in building your business. But, by setting yourself apart, you can begin to build your carrier network and stand out.

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Denim's Solution

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We provide a two-pronged approach to growing your network of qualified carriers.

• Pay quickly: Pay out shippers in as little as 24 hours and eliminate time-wasting follow-up from carriers about payment.
• Build trust with carriers with Denim’s contractor dashboard: Carriers can upload sensitive data like bank information and addresses directly into their contractor dashboard. This ensures information is secure while establishing trust between carriers and brokerages.  

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5 Ways Denim Helps Immediately

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While factoring for freight brokerage is largely associated with maintaining working capital, there are other great benefits factoring with Denim has to offer. 

1. Pay your carriers faster, boosting satisfaction and trust.
2. Grow your network of carriers, so loads are delivered on time.
3. Vet your shippers through free, unlimited credit checks.
4. Prevent any loss in this soft market by reinforcing your network.
5. Protect what you've built, so you don't have to put out fires later.

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Put up a strong logistics defense with factoring from Denim.

The demand for freight brokerages has never been greater as shippers face increasing pressure to lower costs while offering faster delivery. 

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A recent report by Allied Market Research supports this claim, valuing the global freight brokerage market at $48.1 billion in 2021 and estimating revenues will reach $90.7 billion by 2031 at a compound annual growth rate of 6.3% from 2022 to 2031. The report attributes this significant growth to a variety of factors, including a rise in demand for cost-effective ways to ship goods faster and safer and an increased demand for tech-driven logistics services. However, rather than making the necessary investments themselves, shippers are looking for partners that can meet their needs.  

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Freight brokers today must invest in technology moving forward to remain competitive in a growing but tight market. Technology adoption and the data that comes with it has the opportunity to completely change the way freight brokers operate. As a result, more and more companies are implementing technology to transform their businesses. A Deloitte and MHI study of 1,000 manufacturing and supply-chain industry leaders found that in the next five years, 82% of supply-chain companies plan to adopt predictive and prescriptive analytics, while 22% are already using the technology. 

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It has become clear for many in the industry that the path to success means investment in better business management tools. But, regardless of what those tools look like, how brokers collect and use the data associated will be key to maintaining a competitive edge. However, with so much freight data coming in, it can be challenging to decipher what is of actual value. 

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In this article, we will explore why you should care about business analytics as a freight broker, what metrics you should consider, and how to use those data points to improve your business operations. 

Making your carriers feel valued is crucial to building trust, so it is always a good investment to show some gratitude. Leave your carriers with the motivation to hit the road at full speed with these gifts for truck drivers.

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The Importance of Valuing Your Carriers

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Here are just a few benefits of investing in carrier relationships and showing that you care:

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Build Trust

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People naturally trust those who show they care. This is why, in order to grow your network of reputable carriers, you need to show that you appreciate them and build that relationship of trust. The relationship between brokers and carriers goes both ways. 

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‍Limit Turnover

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To do your job well as a broker, you rely on having carriers you can trust to get the job done. Because of this, losing a carrier is never easy. By showing your carriers that you appreciate them, you can limit this turnover. SCALE Logistics, one of our clients, has never lost a carrier because they understand how important these relationships are!

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‍Boost Your Brand

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In a sea of freight brokerages, it’s more important than ever to have a competitive edge. One way to stay competitive is to treat the people you work with well. Shippers want to work with brokers with a good reputation and one way to maintain a good reputation is to have carriers that enjoy working with you.  

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Attracting and maintaining the best talent is a huge predictor of success. Business owners who see their drivers as simply a cost will pay the price in reduced performance and growth.

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Now that you know why appreciating your carriers matters, let’s look at some ways you can do that this holiday season.

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1. Consider Your Carrier’s Route

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While you might not be able to control how many hours your carriers spend on the route, you can consider offering backhauls to get them home during the holiday season. Ask your carriers where “home” is for them and work your routes around their preferences when possible. 

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Brokers who go this extra mile typically make deep connections with carriers and those connections can help you grow your freight brokerage.

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2. Send a Personalized Thank You Note

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When you write a thank you note by hand, it's a meaningful gesture that carriers will notice. Taking the time to acknowledge their hard work with a personal touch—like mentioning how they expertly navigated a last-minute route change or worked tirelessly through the night—shows that you see and appreciate their specific efforts.

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Adding your own signature, or that of another high-level executive, adds an extra layer of personal recognition. Making this kind of appreciation a regular practice can greatly enhance your relationship with your carriers, fostering a sense of loyalty and mutual respect.

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3. Incentivize Feedback

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As a freight broker, you are always trying to get better and improve your brokerage. One way to do this is to incentivize feedback from your carriers.  

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Quarterly surveys are an excellent place to start. You can ask your carriers for anonymous feedback on what it’s like to work with you and if there is any room for improvement. 

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An easy jumping-off point is the three questions below, which almost any concern will fall into:

• What are we doing well?
• What can we improve?
• What else is on your mind?

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4. Public Recognition 

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Publicly recognizing your carriers' exceptional work through company newsletters, social media, and industry publications showcases their dedication and amplifies their success across the logistics community. 

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A social media shout-out or a feature article can highlight their achievements, such as perfect delivery records or creative problem-solving, spotlighting the individuals who keep your freight moving. 

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This form of appreciation fosters a sense of pride. It encourages a culture of excellence that benefits everyone involved—carriers feel valued, and your company demonstrates its commitment to partnership and quality service.

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5. Offer Wellness Days

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We all need to prioritize our mental and physical health and your carriers are no different. In fact, after long days of hauling, carriers need to focus even more on their wellness. 

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Offering your carriers things like massages, specialty fitness classes, or other wellness gifts is a great way to show that you prioritize their well-being.

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6. Trucker Gifts and Gift Cards

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Showing appreciation to your carriers with thoughtful gifts or gift cards can make a real difference. Practical items like quality travel mugs or seat cushions can make their long journeys more comfortable, while gift cards from truck stops allow them the flexibility to refuel their trucks and themselves on the go. 

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Choosing gift cards from their favorite restaurants or retailers adds a personal touch that recognizes their hard work throughout the year, letting them know they're a valued part of your business as the festive period gives way to a new year of continued partnership.

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7. Investment in Carrier Development 

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Investing in your carriers’ skills is another way to show you value them. Training on new regulations, safety, or technology helps them do their job better, improving your business. It’s a win-win: carriers get to upskill, and you get a network of top-notch professionals who are up-to-date with the industry standards.

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8. Appreciation Events 

You could host a driver appreciation dinner or luncheon if you work with local drivers. These events are a chance to relax and celebrate the hard work that carriers do. 

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You can make these gatherings extra special by giving out awards for exceptional service. It’s a way to show carriers that you see and value their hard work and dedication beyond just the day-to-day business. 

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9. Celebrate Milestones (Big & Small)

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Celebrating milestones is a great way to show appreciation throughout the year, not just during the holidays. You’ll likely start by celebrating major milestones, but you can also celebrate smaller milestones, too! 

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Celebrating these milestones will keep your carriers engaged with your freight brokerage and continue to value your broker-carrier relationship. 

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10. Have a Winter Gear Giveaway

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Truckers deal with winter challenges more than most, so why not give them high-quality, well-insulated hats, jackets, and other winter gear? Most carriers would appreciate name-brand (non-branded) gear like Patagonia or The North Face. They’ll have your brokerage in mind every time they put on their new jacket or gloves!

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11. Network Introductions

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Lastly, networking opportunities are key for carriers to grow and connect with others in the industry. As a broker, you can help by setting up events where carriers can meet potential clients like shippers and warehouse managers. 

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This isn’t just about finding new business; it’s also about sharing knowledge and strengthening the supply chain. By helping carriers network, you’re showing you care about their growth, not just the business they bring you.

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Make Your Carriers Feel Special

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These tokens of gratitude are a few ways to make your carriers feel special this holiday season. A freight broker is only as strong as the relationships they have with their carriers, so make sure your carriers feel appreciated. With an extensive network of carriers, you’ll be able to attract top-tier clients and begin to broker their loads. 

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Sending holiday gifts isn’t the only way to make your carriers feel confident working with your brokerage. In addition to the above suggestions, ensure that you are paying your carriers on time and communicating with them frequently. Contact us today to learn more about how Denim can help you nurture your carrier relationships. 

Not all factoring solutions are created equal. 

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Freight factoring is an excellent solution if you're looking to leverage your business's working capital to attract more clients and build strong relationships with carriers.

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But which type of factoring is best for you?

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There are two common types of freight factoring:

1. Recourse
2. Non-Recourse

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The primary difference between the two options is who bears the responsibility in instances of non-payment. However, this distinction introduces nuances that can significantly affect your business.

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It’s worth understanding both types. Not bearing responsibility doesn’t necessarily mean you’re getting the best contract term. In fact, it could be costing you.

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Recourse Factoring for Freight Brokers

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Recourse factoring means you assume liability for invoices that are not paid. In exchange, the fees for these services are lower, and your customers are more likely to be approved for a credit line.

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The Benefits of Full Recourse Factoring for Brokers

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Wondering if recourse factoring is right for your freight brokerage or trucking business? Here are some of the main benefits:

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Lower Fees

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One of the main benefits of full recourse factoring for freight brokers is that you can usually get a lower factoring fee because the factoring company is taking on less risk themselves. 

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Recourse factoring fees range from 1% to 5% depending on your volume, business credit, and various additional factors. 

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Flexible Time to Pay

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Even though most recourse factoring companies will charge-back an invoice within 90 days if they can’t get payment from the customer, there is always room for flexibility. 

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For example, in the recent down market many shippers have been extending their payment terms to 90 to 120 days. Instead of instantly denying you the customer, recourse factoring companies will examine their credit and find a way to work with you.

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In addition to this flexibility, recourse factoring companies are also diligent in figuring out the reason for a non-payment before it becomes an issue. 

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More often than not, the reasons are related to paperwork (a page of the BOL is missing, the AP contact quit and we need to get an updated phone number, etc.). These issues are generally resolved well before approaching the recourse timeframe of non-payment.

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Work with More Clients

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Running a brokerage has inherent risks. At the top of the list is taking on new clients, especially those just starting out or with low credit scores. There is a chance of non-payment and there’s also a chance to grow your businesses together and take on more and more loads. 

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With recourse factoring, you have the choice to take on these risks. Recourse factoring companies will do a deep dive on customer’s credit and notify you of any potential glaring red flags and provide a fair credit limit. 

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Because recourse factoring companies are not liable for non-payment, you are going to find it easier to factor customers that may have some risk. Your customer pool is much bigger. And you get to reap the full reward.

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Quick Processing

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Other lenders may ask for stipulations or wait periods that make getting paid more trouble than it's worth. Recourse factoring companies are typically able to review applications in 2-4 business days, so you can turn your invoices into cash in under a week.

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The Downside to Full Recourse Factoring for Brokers

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The main challenge with full recourse factoring is the broker's responsibility for customer non-payment, especially in the event of bankruptcy. With the current market dynamics, where numerous trucking companies face financial hardships, the risk of delinquent payments looms larger than ever.

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However, this risk isn't insurmountable. Brokers have access to a variety of strategies—many of which are cost-free—to safeguard their operations and financial health:

• Foster Strong Customer Relationships: Regular interactions with your shippers can provide insights into their business health and preempt potential payment issues.
• Monitor Payment Patterns: A history of late payments can be a red flag, indicating deeper financial troubles.
• Keep an Eye on Credit Scores: A declining credit rating is often a precursor to financial instability.
• And more… Read our article for detailed warning signs of bankruptcy.

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By maintaining close relationships with your clients and vigilantly monitoring their financial health, you effectively reduce the risks associated with non-payment that full recourse factoring presents.

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Non-Recourse Factoring for Freight Brokers

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Non-recourse factoring means the factoring company takes responsibility for non-payment in cases of customer bankruptcy.

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The Benefit of Non-Recourse Factoring for Brokers

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In a market where we saw 8,000 brokerage and 88,000 carrier bankruptcies filed in the last year, finding ways to reduce risk is a serious benefit. Non-recourse factoring removes or lessens the risk of non-payment due to customer bankruptcy. 

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Even with the best non recourse factoring companies usually have a loophole in the agreement that states that the only time you will not be charged back on a load is if the customer files for bankruptcy or goes out of business within the 90-day collection period. 

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The Downsides of Non-Recourse Factoring for Freight Brokers

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Non-recourse factoring might sound tempting because you have less liability as a freight broker, but there are some important considerations as you grow your brokerage and need more flexibility.

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Limited Customer Base

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Because a non-recourse factoring company will be taking on more risk, non-recourse factors screen the broker’s customers very thoroughly and will factor loads only from customers who have impeccable credit. 

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As growing brokerages are not likely to work exclusively with blue-chip customers, there is a good chance that the freight brokerage will have all or most of its customers denied by the non-recourse factoring company. 

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Not to mention, because a non-recourse factoring company is inheriting the risk, they are going to be invasive with your customer. They will want a long laundry list of financial data before being able to extend a credit line. This can be extremely disruptive to your relationships. 

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Higher Rates

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As you research factoring companies, you may find that non-recourse factoring companies often charge a higher rate because they are taking on more risk. 

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Typically non-recourse factoring rates start at 2% and can go as high as 6%. 

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In addition to that, generally only established brokerages will be approved for non-recourse factoring. 

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Not a Full Coverage Option

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Non-Recourse factoring can be very misleading. Many see non-recourse and think their brokerage is safe from ALL forms of non-payment. 

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However, many non-recourse factoring agreements typically only cover non-payment during instances of bankruptcy. 

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Some of the cases in which brokers are not protected by non-recourse factoring include:

• Disputed invoices
• Contract breaches
• Invoice errors or discrepancies 
• Customer insolvency from external factors outside their control (ie: natural disasters)
• Cases of fraud or illegal activity (ie: double brokers) 

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What you Need to Know about Recourse vs Non-Recourse Factoring in 2024

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When deciding between recourse and non recourse freight factoring in 2024, freight brokers should consider the following: 

• Financial model and plans - Can your margins afford a higher factoring fee for a small safety net? 
• Client base - Are any of your clients giving signals of bankruptcy? If so, are there other ways to reduce the risk (ie: diversifying your portfolio, increasing rates, or insurance). 
• Terms and Conditions - Do you have the time and bandwidth to manage a factoring company with tight restrictions? 

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Ultimately, the choice between recourse and non-recourse factoring depends on each freight broker's specific needs, risk tolerance, and financial strategy. Engaging with a factoring company that offers transparent terms and aligns with your business values is crucial for a successful partnership in 2024.

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Your Freight Broker Factoring Solution

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Every freight broker is different and will require different needs with choosing a factoring solution. Freight factoring is a good option to maximize your working capital, manage your cash flow, and build strong relationships with shippers and carriers. 

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At Denim, we offer recourse factoring because it’s the best way to serve our clients, no matter the size of their brokerage. We also offer a number of tools to protect your brokerage, from unlimited customer credit checks to important business metrics like most and least profitable customers. 

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Want to learn more about factoring with Denim? Schedule a demo to experience the whole platform!

The gap between delivering freight and getting paid shouldn't be significant. Luckily, you can get paid instantly by using freight broker factoring.

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Keep your business running on the capital you've already created. Stop relying on buffers created from credit and loans. Focus on running your business and, ideally, growing it, instead of chasing down payments, leaving you light on resources when opportunities do arise.

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Freight broker factoring has been around for decades and has helped many freight brokerages grow instead of stagnating.

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What is Freight Broker Factoring?

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While 40 days is the standard amount of time to get paid in the freight industry, selling your invoices to a factoring company allows you to get paid immediately.

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Sure this is convenient, but what's the cost to your business? Most companies that specialize in factoring for freight brokers charge a flat rate per invoice factored, usually between 2-5%.

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How Factoring for Freight Brokers Works

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The terms of your factoring agreements depend on the outcome of your application, but here are the high-level steps:

1. A customer needs an item shipped between two locations.
2. A credit check is performed upon hiring to ensure their load qualifies for the requested services.
3. When the item is delivered, you invoice Denim.
4. Denim purchases your invoice and you and your carrier are paid within 24 hours.
5. Denim collects payment from the customer.

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Factoring vs Bank Loans

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When you get a bank loan, you might put up collateral in the form of AR or other business assets. This allows you to retain ownership of assets while simultaneously selling the invoices to a factoring company. Factored accounts are removed from receivables in exchange for the ability to bill the client directly. 

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The transaction simply replaces AR with cash in the bank, or off-balance sheet financing. One big benefit of using a factoring company as a freight broker is that you won't incur a monthly interest expense, unlike a bank loan. 

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Factoring allows you to reduce your total balance sheet debt while also lowering your debt-to-equity ratio.

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The Benefits of Factoring for Freight Brokers

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There are many benefits of factoring for freight brokers. Here are just a few:

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More Access to Working Capital

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Mega brokers don't suffer cash crunches, they simply keep moving, often steamrolling smaller brokers in the process. Carve out a chance to compete with these big brokers with factoring. What is the total cost of operational pauses? You can't take on new work, your current clients suffer, and in the long run, your reputation suffers. Not to mention you're not at your best as a company when you're constantly stressed over your AR.

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Stay Competitive

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To build a reputation and maintain it as a freight broker, you need to stay competitive. The more value and better experience you can provide, the more likely you'll be to get referrals. You will live or die by these in the freight industry.

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QuickPay‍

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With factoring for freight brokers, your carriers get paid quickly without being charged a fee. The easier you make life for your carriers, the more of them that will come back. Get up to 95% of your invoices paid out just a day after submitting them. 

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Increase Value

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Why should carriers work with your freight brokerage over the others? Starting out, you need to develop a unique value proposition, even if it's only offering a shred more than your competition. The truth is that the freight brokerage industry, and logistics in general, is extremely competitive. Everyone knows how to offer the fundamentals, including factoring. The question is—will you do so in a way that stands out?

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Less Paperwork

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Paper shuffling around getting invoices paid is not only a waste of time, but it can also be costly labor. Eliminate labor that you can give to an outside team and recoup much more than the factoring fee in many cases.

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Free Credit Checks For Shippers

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If you can find a factoring provider like Denim who does free deep dives into shippers, you’ll prevent a lot of unqualified customers from slowing you down.

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Enjoy Flexible Financing Options

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No two freight brokerages are the same and therefore, they have different financing and payment processes. Because of this, it’s important to have flexible financing options. At Denim, for example, you can choose which invoices you want to factor. In addition, we also have a feature coming soon where you can choose when you get paid to either save on factoring fees or get paid sooner if you need the capital. 

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Factoring for Freight Brokers vs Factoring for Carriers

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Denim specializes in freight broker factoring because most factoring companies focus on carriers. Why work with a factoring company that doesn't completely understand your unique needs as a freight broker?

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You don't just produce or ship; you connect the two parts of the supply chain. Without you, loads are delayed and customers are unsatisfied, leading to damaged reputations over time. We understand the value you provide, which is why we cater just to factoring for freight brokers. Our factoring solutions are made by brokers, for brokers.

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How to Choose a Freight Broker Factoring Company

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As a freight broker who wants to be paid quickly, who do you go with to provide your factoring? Here are some things to consider when choosing a factoring partner (spoiler alert: a lot more goes into this partnership than just trying to get the lowest rate):

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Referrals

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The logistics sector is a tight-knit community so if you’re not sure which factoring company to choose, you can consult others who have been in a similar position to see who they chose.

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Success Stories

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When choosing a factoring partner for your freight brokerage, it’s great to see success stories from similar brokers. We have many amazing success stories from freight brokers just like you. They share their stories and how factoring helped them grow their business.

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Reviews

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Like success stories and referrals, reviews are a great form of social proof as you research different factoring companies. We are proud of our 4.8 star average on TrustPilot. 

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Specialization

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As we mentioned, freight brokers have unique needs and should look for a factoring partner that understands their line of work. You will have different needs than carriers looking for factoring.

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Factoring Types

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Recourse and non-recourse factoring are the two most common types of factoring. Non-recourse factoring means the factoring company assumes most of the risk of non-payment by your customers. This can be misleading because non-recourse does not necessarily protect your company from all risk. There are usually strict stipulations associated with non-recourse factoring, and the situations in which you are not responsible for customer non-payment are extremely specific.

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Advance Rates

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When considering your factoring partner, you should decide how much of an advance you would like while you wait for your invoices to be paid in full. Denim offers 90% advances to our clients.

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Minimums

Some factoring companies for freight brokers will require monthly minimums, which can be hard to reach for smaller brokers. At Denim, we don’t require any factoring minimums and you can choose which invoices you want to factor.

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Fee Type

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Flat and variable fees are common. Variable rates fluctuate with your demand. For example, if you assign volume flex variable rates, you'll pay less the more you sell. Rates can also be tied to prime rates, meaning you'll pay more when your factoring company pays more.

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Your Freight Broker Factoring Solution

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At Denim, we are passionate about providing freight brokers with the most flexible, easy-to-use, and convenient factoring solutions. Not only do we offer competitive factoring solutions, but our dashboard is cutting-edge and includes business metrics that every freight broker should know about their brokerage. 

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Want to learn more about factoring with Denim? Sign up for an account today or schedule a demo to experience the whole platform!