In recent years, trucking load boards have been gaining popularity with Canadian carriers and shippers. Load boards offer a simple solution for shippers who need freight moved and for carriers with available capacity.
In fact, many owner operators rely solely on load boards as a way to grow their business. Perhaps this strategy sounds easy because you can find loads from any place that has an Internet connection.
However, relying solely on load boards is not a good idea. You should use load boards strategically, while looking to establish relationships with shippers.
Problems with load boards
Working with load boards is not as easy – or as profitable – as many owner-operators think. The fierce competition for loads affects your profit margins, as you need to lower your prices to get loads on popular routes.
You also often work with freight brokers, rather than with direct shippers. While there is nothing wrong in working with brokers, they do take a share of the profits.
Lastly, you usually end up pulling loads for many different companies (and brokers) instead of building relationships. Be careful to ensure you don’t move freight for brokers or shippers who are unreliable payers. Working with shippers who are bad payers could easily drive you out of business. (Tip: Here is a list of Canada and transborder load boards).
Preventing unreliable payments
One of the problems of constantly working with new shippers and brokers is that you never know who will be a good payer – and who won’t. As an owner-operator (or small fleet owner), you need steady cash flow to operate the business. A slow-paying broker could derail your cash flow and affect your ability to buy fuel, pay for repairs, or pay drivers.
The best way to avoid unreliable payers is to run a commercial credit report on them before taking on a load. Credit reports cost a little bit, but they are worth it. Ansonia provides credit reports for Canadian shippers/brokers.
Handling slow-paying shippers
Ideally, you want to work with shippers that offer quick-pays. However, this scenario is not always possible. Many shippers and brokers have net 30-day payment policies. Unfortunately, few owner-operators can wait that long for payment. One solution is to pull the load but factor the freight bill.
Freight bill factoring allows Canadian truckers to finance freight bills from slow-paying, but creditworthy, shippers. Basically, you pull a load and the factoring company provides you with an advance as soon as the load is delivered. The transaction settles as soon as the shipper/broker pays the bill in full.
The best way to grow your trucking business
Your best bet is to use freight load boards strategically. Use them when you have excess capacity, are sitting idle, or are just starting in the business. However, work hard to build relationships with shippers who will provide constant loads.
Over time, your objective is to avoid using load boards entirely and rely solely on established relationships. Most truckers agree that this strategy works best .
Working with established relationships provides you with higher profit margins, better job satisfaction, and a reliable source of business. Building shipping relationships is hard work, but it is worth the time investment.
Get a factoring quote
Are you looking for financing? We are a leading provider of factoring in Canada and can offer competitive terms. For information, get an online factoring quote or call (877) 300 3258.