Freight Collection Agency for the Logistics Sector
Freight Collections Agencies aid you in the recovery of your past-due accounts and will not only increase recovery rates but provide you time to devote to your business.
Operating a company in the logistics sector is a cost heavy endeavor with consistent and reliable cash flow being a necessity for survival. Every year millions of dollars in unpaid freight charges go uncollected, resulting in crippling losses for truckers, freight shipping companies, rail carriers, and associated logistics services. Having a clear and concise understanding of the issues that logistics companies face when collecting is paramount to maintaining clean accounts receivable.
The need to secure cashflow in the logistics sector can be attributed to several causes. There has been increasing competition among the most significant logistics carriers in the nation, which has caused companies to have to compete by offering lower rates to brokers and shippers. While prices are dropping, trucking companies also find themselves having to pay more per mile to truckers and increase other benefits to drive their trucks as the nation has a drastic shortage of active truck drivers. According to the National Transportation Institute, truck drivers realized an average increase in pay of nearly 10% from 2017 to 2018. This rising cost of labor means the margins earned on each load are shrinking, making the collection of revenue more critical than ever.
In addition to these macro concerns, the sheer expense of operating a logistics company can be remarkably high compared to other industries with relatively fixed costs. A study conducted by the American Transportation Research Institute broke down the average costs associated with operating a trucking company. In 2009 the average marginal costs per mile were $1.45 when considering fuel costs, truck leases, repair costs, truck insurance premiums, permits and licenses, tires, tolls, and driver expenses. By 2017 this cost was $1.69, an increase of 16.55% over eight years. While business expenses are part of every enterprise, the fluidity of the expenses in logistics can make it challenging to evaluate the costs that can be projected. In the same study between 2009 and 2017, the cost share of fuel expenses fluctuated over 11%. Driver wages also ranged 7% during the same time frame. With fluctuations as drastic in such a short time frame, any loss in revenue can quickly plunge a logistics company into the red if they fail to collect their invoices.
These challenges are not unique to domestic freight shipping and trucking; however, as all companies involved in logistics must deal with similar issues. International container shipping represented an industry worth 12 trillion dollars in the year 2017 alone. With larger ships and advances in technology, ships had grown from 11 million metric ton vessels in 1980 to 266 million metric ton vessels in 2019. When dealing with international freight, these companies run the risk of their clients not properly executing import documents, which can result in shipments being frozen at the port of entry. Often when this happens, the shipper or receiver will abandon the delivery as the import fees and costs to have the goods released may not be worth the expense, and the freight company ends up unpaid.
With the costs of operating a logistics company rising and the profit margins sinking, operators of these freight companies must do all they can to collect their receivables. When an invoice goes unpaid, the freight company loses out on the possibility of profits as well as the actual expenses, incurred such as fuel and driver pay. When faced with unpaid invoices, many logistics companies will turn to a 3rd party debt collection agency to assist with the recovery of their funds. Our agents are trained to utilize various tools when addressing these issues. The agents handling a claim will focus on identifying the cause of the debt, explore remedies to cure the problems, and, when appropriate, use the proper leverage to incentivize the debtor into resolving the matter. Unlike other agencies that use cookie-cutter demand letters and scripted agents, often in an overseas call center, our agents thoroughly investigate the claims to ensure that no stone is left unturned in securing payment. When a company still refuses to address the obligation, we have a network of collection attorneys that will not only dispute the claim but collect through garnishments, liquidations, and other court remedies that force a recovery.
In addition to recovering the debt, other factors make selecting the right company when using a collection agency. On top of being taught collection tactics, our agents are also versed in business etiquette and conduct to ensure that our clients are being represented professionally and that their customers are being dealt with respectfully. In times where anyone can write a yelp or google review, it is vital that logistics companies are represented as a collection agency that conducts business professionally.
If you are in the freight industry and faced with the problem of collecting on a delinquent debt, contact our office to speak with a specialist to discuss your collection needs. Unlike other companies that will simply provide a standard quotation and a slick sales pitch, our intake specialist will consult with you to better understand the challenges that you are facing and devise a plan and pricing option that will serve your needs. Your focus should be on the development and growth of your business. The logistics sector is highly competitive, and allowing our expertise to aid you in the recovery of your past due accounts will not only increase recovery rates but provide you time to devote to your business.