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How Factoring Can Help Trucking Companies Manage Fuel Costs

AutomotiveHow Factoring Can Help Trucking Companies Manage Fuel Costs

Fuel is one of the main expenses for any trucking business. And with the continuously soaring fuel prices, some fleets may struggle to keep up. Worse, the long payment cycles in the trucking industry don’t offer any consolation – just another problem for truckers to deal with.

The good news is that there are many ways to cope with the increasing fuel costs in the market. Instead of cutting corners on other areas of your operation, you can consider partnering with a trucking factoring company.

Below, we discussed how a factoring company can help in managing fuel costs and why it’s a good solution for your own fleet.

How factoring can help manage fuel costs

The high cost of fuel trucking business have to face doesn’t have to be a lingering pain. With the help of a factoring company, you can lighten fuel expenses in the following ways:

1.  Get immediate fuel money

First off, a factoring company for trucking can turn your unpaid invoices into instant cash. You no longer have to wait 30, 60, or even 90 days for shippers to pay just to receive your much-needed working capital.

When you sell your accounts receivables to a factor, they will fund it within 24 to 48 hours. This means you’ll always have enough money for fuel, ensuring your trucks are always on the road hauling loads.

Aside from fuel, quick funding from freight factoring will also let you cover all other operational expenses. This includes maintenance, salaries, toll fees, and other things that keep the wheels turning.

2.  Take advantage of fuel advances

Aside from funding outstanding invoices, a factoring company trucking also offers fuel advances. Much like invoice factoring, you’ll receive a portion of your future invoice as fuel money so you can successfully deliver your loads. Once delivered, you’ll be paid the remainder of your invoice value.

Overall, fuel advances are a great way to kickstart your trucking business if you’re a bit short in cash. It’s like a short-term loan without any interest rates, tedious paperwork, or a long approval process.

3.  Maximize fuel card perks

Factoring companies also offer fuel cards where you can take advantage of fuel discounts, service discounts, and other perks. Overall, it’s a great way to get more miles on your trucking gas and monitor your driver’s fuel expenses.

On average, fuel cards allow truckers to save up to 42 cents per gallon, which can accumulate to $8,000 year – or more for the busiest fleets.

Aside from helping you manage fuel costs, fuel cards also let you generate detailed fuel statements for IFTA reporting. It’s both big savings and convenience for your trucking business.

4.  Secure budget for upgrades

While there’s nothing you can do to stop the rising fuel prices, there are upgrades you can perform to make your trucks more fuel-efficient.

However, truck upgrades do cost money, which is something that factoring can easily help you secure. You can simply sell your unpaid invoices to a factor and have enough funds to enhance your fleet’s fuel economy. This includes adding side skirts and roof fairings for aerodynamics, fuel-efficient tires, and engine tuning.

All these will help maximize every gallon of fuel on your tank, so you can cover more miles, deliver more loads, and make the most out of every cent you spend on fuel.

Bonus tips on how to reduce fleet fuel costs

If you’re looking for more ways to stretch your fuel economy, the following tips will be a great help:

  • Practice good driving habits. Aggressive acceleration and hard braking eat up a lot of gas, which will increase your fuel costs in the long run. If you want to avoid this, you should start assessing your driving behavior and see where you can improve.
  • Avoid unnecessary idling. If possible, reduce unnecessary idling as this consumes as much as one gallon of gas every hour. In a week, this will cost you at least $100 or even more.
  • Get lighter loads. Weight matters when it comes to improving your fuel economy. If you can, try to avoid very heavy loads as this burns a lot of more fuel than lighter ones even with the same mileage.
  • Keep your vehicle well-maintained. Regular maintenance will ensure you’re not burning too much fuel than necessary. For example, clogged air filters, leaks, and brake drag will lead to higher fuel use. All these can be avoided with periodic tune-ups.

Takeaway

When it comes to fuel costs, a factoring company trucking can be a big help. They can turn your invoices into cash, giving you more than enough funds to cover fuel costs and other operational expenses in your trucking business.

Aside from that, factors also offer fuel advances and fuel card programs that will further enhance your cash flow. Whichever solution you choose, just make sure that you’re getting it from a reputable factoring company that specializes in the transportation industry.

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