Young brokerages and those attempting to rapidly scale their businesses often end up taking out loans to cover their costs and finance their carrier payments. The terms that accompany these loans — including high interest rates, strict payback periods and restrictive covenants — can become burdensome for brokers and may actually hamper rather than enable their growth.
Many brokers rely on these types of loans to help them pay carriers and staff when growing in the industry.
“Carriers and factoring companies that a broker is paying will often times not work with the broker unless they can pay within a few days of the agreed-upon terms or send quick pay,” ComFreight CEO Steve Kochan said. “If the broker doesn’t keep their payments on time, this will negatively affect their credit and make it harder for them to book trucks and grow in the market.”
Traditional loans are not the only way to get carriers paid and build up credit. ComFreight has set out to help brokers and carriers grow by solving the problem of contract-heavy, high-stress traditional loans with HaulPay. The company finances brokers’ carrier payments and even advances broker’s margins without locking them into highly restrictive loan terms, allowing them to pay carriers fast and avoid the restrictions that accompany traditional loans and factoring.
HaulPay also offers superior protection against costly mishaps, like paying fake carriers. As more carriers are invited into the HaulPay payment network the number of trusted payee carriers grows and these trusted carriers can be easily connected to from within the platform to help broker’s expand quality capacity options too. Because HaulPay also has digital factoring for smaller fleets they have direct insights into the best ways to mitigate these risks from carriers.
Invoicing and payments can also be error prone and HaulPay has a unique way of dealing with those issues too. Each invoice is generated as a digital receipt for both sides of the transaction and uses structured data either entered and confirmed directly by both parties of the load transaction or it is streamed directly into HaulPay with a direct TMS integration.
ComFreight’s unique factoring program has proved especially helpful for small brokers working to establish or repair their credit. In fact, many brokers keep the company’s 15-day pay program in place over the long term in order to have stellar credit reporting to the load boards, according to Kochan.
“We have doubled down on that in the past year,” Kochan said. “We’re continuing to build a trusted payment network of carriers that brokers invite into our payment system to be able to QuickPay or pay with a fully digital transaction, essentially getting rid of the paper and risk”
Eliminating paper is aligned with greater trends within both ComFreight as a company and the logistics industry as a whole. The industry is embracing digitization and integration at breakneck speed.
After spending years in brokerage himself, ComFreight Head of Customer Success, Steve Spoerl understands the importance of streamlining the experience for brokers. The fewer steps brokers have to take to execute a task, the more time they have for revenue-generating conversations and relationship-building interactions.
In order to make the process as easy as possible, ComFreight already integrates with several TMS products, making it easier than ever for customers to take advantage of their solutions. According to Spoerl, that is just the beginning.
“The demand for integrations is astronomical,” Spoerl said.
The ultimate marker of ComFreight’s success is the fact that customers tend to stay once they experience the product, despite the company’s somewhat rare non-punitive nature.
“We have an incredibly low turnover rate, and that is amazing. When you’re comparing us apples-to-apples to other companies, this is a big one because of the complete openness of the program,” Spoerl said. “This is a non-recourse program, and there are no hidden fees or interest charges for leaving. There are very few non-recourse programs out there for brokers, and there aren’t many that operate at our level of service for carriers, either.”