The COVID-19 pandemic isn’t only a threat to human health but also to the economy. For many people, the impact has been disastrous as jobs have been lost and businesses have closed. For the trucking industry, however, the effects have been less clear cut. In some ways, in fact, the virus has actually created more demand for transportation services. Let’s look at some of the ways that the coronavirus has impacted the trucking industry.
How COVID-19 is Both Harming and Helping the Trucking Industry
Transportation plays a critical role in the entire economy. When a crisis such as a pandemic hits a large nation, the effects are both devastating and complex. Many businesses, such as retailers, hotels, event venues, salons, and others that typically order large quantities of products, are now closed and all events & tradeshows are canceled. Even businesses that have remained open are drastically scaled back. For example, some restaurants are getting by serving takeout food. However, some businesses that don’t have the resources to survive through an extended lockdown have shut down permanently. In all these cases, the result is fewer deliveries.
On the other hand, the virus has actually created more demand for transportation in certain sectors. Grocery stores are still open and many customers are stockpiling items such as toilet paper and staples. Amazon and other online retailers have actually seen increases in sales. People stuck in their homes under lockdown are ordering lots of items they would have normally picked up in person. Even when stores such as Walmart are open to the public, many customers feel safer ordering online. Thus, demand has increased for many physical products.
Trucking companies have either been helped or harmed by COVID-19, depending on which sectors they serve. Of course, even some experiencing a boom are facing challenges as they struggle to keep up with a surge in demand. It’s safe to say that just about all businesses are currently dealing with an unusual and difficult situation. The fact that no one knows how long the pandemic will last makes it all the more unsettling.
Importance of Non-Recourse Transportation Factoring
Whether you are currently facing a slowdown or spiking demand, your cash flow is crucial for keeping your business healthy. Invoice factoring is one of the easiest ways to keep your cash flow stable during chaotic times. If some of your customers are having trouble making ends meet, you may have a growing pile of unpaid invoices.
With an uncertain future for everybody, it’s often hard to predict when, or if you will collect payments. When you use non-recourse invoice factoring, not only do you get paid immediately, you get credit protection on your customers. This means if your customer does not pay for credit reasons, you do not need to repay the factoring company for the advance made on the invoice. The factoring company assumes the credit risk.
In addition to cash flow and bad debt protection, there are several other benefits to transportation factoring.
- Factoring is often easier to obtain than other forms of financing. Factoring companies base approval on your customers’ credit rather than yours.
- Once you qualify for factoring, you can start receiving payments right away. You can use the cash to fuel your trucks, meet payroll, and other business-related expenses.
- Factoring allows you to boost your cash flow without incurring any new debt, making it a sound practice for your business’s financial stability.
How to Obtain Transportation Factoring
While non-recourse invoice factoring can be helpful anytime, during a crisis such as the COVID-19 pandemic, it’s even more valuable. If you’re ready to consider factoring, you’ll want to work with a trusted and experienced company. Riviera Finance has been in business for 50 years and has experience in many industries. Transportation factoring and freight bill factoring are among our specialties. To learn more about non-recourse invoice factoring for trucking, contact Riviera Finance today!