Bad debt for a truck line is like waving a red flag in front of a bull. Unfortunately, the damage doesn’t stop there. People may lose their jobs. Profits shrink. Promotions are put on hold. Bankers frown. Most critically, employees’ morale and confidence suffers.
I remember a large, publicly traded truck line in the late 90’s. It struggled with profitability toward the end of its life. Whenever it released earnings, it blamed its lack of profitability on deregulation and poor quality brokers. Each quarter we heard the same old story. It was like a broken record.
I didn’t buy it then and don’t buy it now. Don’t blame a lack of success on the wrong business relationships. Have the courage to say “I’ve had enough. We are not going to haul for these guys any more. We are going to build a network of premium brokers who will pay us on time and fill our empty miles.”
So what are the traits of a premium brokerage company? Are there enough premium brokers out there to reload your equipment? We think so. We estimate that there are about 2,800 premium brokerage companies doing business in the U.S.
How would I define a “premium” brokerage?
- Freight bills paid in 35 days or less.
- A competent payables staff in place. (You won’t ever hear excuses like our payables clerk is on vacation in Antarctica and won’t be back for several weeks.)
- A high net worth of at least $250,000. $500,000 or more is even better.
- A membership in the Transportations Intermediaries Association.
- They don’t run away from problems and shippers love working with them.
- They control some of the best freight in the United States and for a reason.
There is even talk of a number of these brokerages getting together to form a “Premium Association.” Requirements would include a high net worth and a surety bond of $500,000 or more. These brokerages believe that if it’s good for the industry, it’s good for them.
We are currently working on an upgrade to RTSCredit.com. It will allow you to do a radius search for premium brokers anywhere in the country. Our goal is to allow you to work with the best. Make a conscious decision to put the aggravation of slow pay and bad debt behind. Start building quality relationships today.
Elizabeth Beerman
Director of Marketing, RTS Credit Service, Inc.
Posted by rtscredit 
