Freight Broker, You would not need 5 or 6 million sitting in the bank. All you would need is the prudence to limit growth to your financial resources. As a Carrier myself I have access to sufficient capital allowing me to pay my obligations as per my vendors terms. It would have been easy over the past to add 100 or 200 Owner Operators to my fleet. With an average receivable of 45 days and an average payable of 15 days it would have required a substantial amount to finance that kind of growth. We can not change our customers payment practices. We know how long it takes to receive funds so we limit growth to our resources. It is irresponsible to grow or even start as a load broker or any business for that matter without determining the amount of capital you will require to pay your suppliers on terms. I am happy to see that you have built a successful freight brokerage and pay on terms. You are a rare breed. Basking in the sun is over rated anyway.....
you're right..and the good news is that some volume shippers realize that..and as a result they pay their bills promptly. They understand that the supply of trucks drys up if payments are dragged out past agreed terms. The volume shippers who need lots of trucks everyday understand that slow pay equals no trucks. The smaller shippers don't see that relationship as much...which is why I charge the smaller guys more. I look at my own carrier base in the same manner...paying promptly gives me a competitive advantage in the market place..i.e. if 20 brokers are vying for the same truck the broker with the best money and the best terms and payment history is going to get that truck.
Volume shippers, and some smaller ones, also realize that trucking, whether provided directly by a carrier or through a third party, is a service. As such, it should be paid promptly, something that we do at my firm and have done so for the last 19 years. Granted, it was difficult in the beginning, but has paid off many times over since. We have many instances where a carrier will accept our freight at a lower rate over another broker's, simply because they know they will be paid on time. Truckit is correct, walk before you run and build up your cash reserves. Like the fable says " slow and steady wins the race".
I am determined to keep this one alive until we get this crook off the Link, need just a few more complaints to the Link and they are off the system. Thank you for your help.
I'm not sure link does there best anymore with collections, I know I have reported A&M and you have, and someone else must have, Link doesnt follow up like they used too. Used to only take 3 complaints, lets face it Link doesnt care who uses their service, they just want there monthly fee.
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