What You Need to Know About Starting a Career in Trucking
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Originally Posted On: https://moneyqanda.com/career-in-trucking/
Driving a truck remains a very popular career. No matter what technology may do to education, shopping, or even medicine, there are still things that must be moved from one place to another. That security makes it an appealing choice for many people.
In time, some of those drivers begin thinking about owning a truck themselves and working independently with a career in trucking, choosing their own workload, destinations, cargo types, and otherwise being their own bosses.
Career in Trucking
For those aspiring entrepreneurs, there are a number of barriers. The most obvious is the purchase price of the truck. Commercial vehicles are very expensive and require skilled maintenance, so many drivers simply can’t afford to put a rig of their own into service.
Another obstacle is the administration of the operation. The management required as a driver is far less than what’s needed for an owner-operator, so many drivers stay out of ownership just because they don’t have the background to manage an entire business.
But perhaps nothing gets in the way of this opportunity quite like the simple need for timely payment. A truck driver incurs costs with each load, consuming hundreds of dollars in fuel before receiving payment. Despite good financial budgeting techniques for the circumstances, it can be difficult enough to stay afloat when invoices are paid on time, but when customers lag behind, the strain is almost impossible to overcome.
Accidents can also be expensive, although you may be able to mitigate these with compensation through help from an 18 wheeler accident attorney.
For a truck driver who can finance the rig and balance the books, this problem doesn’t have to derail plans to own and operate their own truck. A service called freight factoring can get them into business quickly and efficiently.
The service is relatively simple and straightforward. In traditional business models for trucking, the load is delivered and an invoice is sent to the shipper. Payment is made and the trucking company pays its bills.
While that model sounds simple, there are many opportunities for it to get interrupted. First, the trucker must be able to send the bill in a timely fashion, but more problematic than anything is getting the customer to pay it. Add in the impact of road time in creating a lack of time for pursuing late payments, and the imbalance can be significant.
With freight factoring, the trucker doesn’t bill the customer. Instead, the invoice goes to the factoring company, which performs the tasks necessary to collect a payment, including working to get overdue bills current. The factoring company keeps a percentage of the invoice for the service.
The best part for the owner-operator is that the factoring service pays immediately, so the trucker not only farms out the billing and collection process but also gets money upfront. This dramatically simplifies the process of handling highway expenses and staying current on the trucker’s own payables.
Almost everyone aspires to do work they love under their own name, without having to help someone else earn a living. Trucking is certainly no exception, with countless drivers undoubtedly daydreaming about this option during their many hours on the road.
Because business management, in general, is so difficult, most drivers can do little more than a daydream. But for those who have the means to finance the rig and have the knowledge to manage the business, it’s no longer necessary for them to rule out a life as an owner-operator just because of concerns about being paid promptly by customers. In these cases, freight factoring can be the final hurdle to clear between driving for someone else and driving independently.