New partnership harnesses factoring, freight tools

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Updated May 20, 2020

If you’re a client of factoring service OTR Capital, there’s a going to be a new avenue toward the freight universe available from brokers participating in Trucker Tools‘ load matching engines. The integration’s of a piece of with what OTR Vice President and Director of Operations Grace Maher told me last week was principal to the company’s mission — not only to deliver cash fast for its core service, factoring independents’ and small fleets’ invoices, but increasingly to provide clients access to the “best freight options out there, and it might not always be NTG.” That’s Nolan Transportation Group, the referring brokerage OTR Capital has its longest-term relationship with.

The new partnership with Trucker Tools is evident this week in a platform integration. Trucker Tools’ predictive freight-matching tools, including features to help plan loads based on current and destination locations, and “Book it Now” options will be embedded in OTR Capital’s customer portal. OTR customers will also gain access to Trucker Tools’ document-capture functions to speed up payment for delivered loads.

Trucker Tools says this partnership is among the first the company has formed with financial services and business support firms focused on owner-operators and small fleets.

Trucker Tools’ Prasad Gollapalli speaking at the 2019 Mid-America Trucking ShowTrucker Tools’ Prasad Gollapalli speaking at the 2019 Mid-America Trucking Show

OTR Capital CEO Fritz Owens said the partnership “addresses two key imperatives for our clients: simplifying and automating many of the burdensome tasks truckers face in managing a fluid and changing business, and providing timely, accurate data through enabling, intuitive mobile technology.”

It builds on other developments Maher detailed last week, including an early-year debut in the OTR client portal of a window on “new exclusive live data so that clients can see what the rates are that we’re factoring.”  That means a close look at particular lanes — and particular brokers, a very popular feature. “We really want to give them the tools to help them understand how well they could do.”

Most OTR factoring customers, small businesses as they are, don’t have a robust TMS in place, she added. So “we’re helping do that for them now – tracking their volumes, helping them understand what’s going on in the wider market.”

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I’ll be further reporting on factoring companies in the near future, and the support they can bring to small trucking businesses, particularly in a time like the present one.

Apex Capital customer Joel Ruhlman, the non-driving co-owner and -operator of 30-truck/50-platform-trailer (flatbeds and more specialized equipment) small fleet North American Specialized Transport, or NAS, out of Warren, Mich., summed up the risk well after having recently utilized the services Apex makes available to clients to check a broker’s credit.

“In a time like this,” he said, shippers and brokers are likely to be struggling as much as you are. He noted a large reduction in a Chicago-based 3PL’s limit (the amount the carrier client can factor) in Ruhlman’s Apex portal for credit checks. “Their credit score there went from 97 to 54, with days to pay from 32 to the high 60s or low 70s.”

Those kinds of resources, among the many others that larger factoring services bring to the table, have clearly gotten the attention of small trucking businesses. In our recent surveying of Overdrive‘ readers operating with authority, the share who reported utilizing a factoring company for payment on at least some invoices was 19 percentage points higher than it was just two years ago, when we asked a similar question.

Former expedited owner-op Dawn Weaver manages a small fleet, Big Ass Freight, focused on oversize freight on extendable RGN trailers. She designed her three-truck, all-owner-operator business to be as “low-asset” as possible. Instead of a dedicated collections staff, she factors almost all of her invoices for mostly oversize (non-heavy) moves through OTR Capital, as she has from the beginning.

Dawn WeaverDawn Weaver

“The biggest problem a small trucking company has is cash flow,” she said. “I don’t have a problem filing suit in small claims court and chasing that” if a broker doesn’t pay, “but I didn’t want to invest the time and money in training a collections staff, which is what you have to have when you’re dealing with brokers.”

In her experience, only Landstar’s brokerage delivers better quick-pay rates than her agreement with OTR, a non-recourse agreement. “Every year they’ve reduced my factoring percentage based on the volume I do” with them, she said.

A Big Ass Freight-leased 2012 Volvo VNL, outfitted with a custom ARI big bunk, owned by Alan & Sons LLC and operated by Alan Kopetzky.A Big Ass Freight-leased 2012 Volvo VNL, outfitted with a custom ARI big bunk, owned by Alan & Sons LLC and operated by Alan Kopetzky.

And Weaver relies heavily on OTR’s broker credit check function as her insurance against getting involved with fly-by-night operators who have no intention to pay any carrier. “If a broker’s not approved” in OTR’s system for factoring, she said, “I email [OTR] and ask them why not, and they’ll tell me, which is nice.” She’s come across situations where a broker is actively attempting to get the company to do business with them – in such cases, it may make sense to take the load if their credit is approaching levels acceptable to the factor.

If you’re factoring, how has your arrangement helped you – or not – through the current climate?

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