— December 1, 2022 —
One of the biggest reasons owner operators and small fleet owners alike go into business for themselves is to control their own destiny. With freight rates dropping and fuel prices at all-time highs, carriers are sharpening their pencil on their biggest expenses to operate in the black. Fuel and factoring are at the top of that list.
A fuel discount of 25 cents a gallon can translate into $3,000 annual savings per truck. .25% off factoring fees can save about the same. There is an allure to bundle factoring and fuel thinking it will save lot of money, but it comes with hidden risks that carriers should carefully consider.
Here are some points to consider:
Here are a few red flag clauses to identify potentially problematic bundled factoring and fuel agreements:
Given how quickly things can change, it’s best to negotiate factoring and fuel discounts independently and keep the financial control of your company in your hands, not your factoring company. It’s important to note, the small independent carrier can benefit from great discounts without the need to leverage their company. In fact, bundling of factoring and fuel was designed to benefit the carrier who does not qualify for fuel credit on their own. Those carriers’ options are limited to cash deposit, or factor-funded fuel accounts. Conversely, carriers with established credit can negotiate each deal independently thus circumventing the contractual levers involved with bundling.
NASTC is dedicated to helping small trucking companies control their costs and save money. NASTC has partnered with Orange Commercial Credit (OCC) for factoring for over 18 years. Together they provide the small independent carrier the most competitive pricing on factoring and fuel while keeping the contracts separate. This allows the carrier to adjust each relationship independently as needed so they can always make the best decisions for their company.
Andrea Rogers is Vice President of Orange Commercial Credit (OCC) and has helped over 500 companies grow by achieving steady cash flow and financial stability through factoring. OCC has 40-plus years' experience funding transportation companies. More than 35% of OCC's new business is client referrals.