Editor’s note: This story was updated at 12 p.m. on Sept. 1 to reflect updated information.
On Friday, FreightWaves reported that factoring company OTR Solutions made the decision to place digital freight brokerage Convoy on a “do not approve” list based on concerns about Convoy’s balance and credit.
Now, Convoy and OTR Solutions have issued a joint statement saying that the situation has been resolved.
“Earlier today, an article appeared in the press referring to a misunderstanding between Convoy and OTR,” the companies wrote to FreightWaves. “That misunderstanding has been resolved and Convoy is up to date on all payments. Convoy has also been reinstated to the OTR buy list.”
The factoring company OTR Solutions had put Seattle-based digital freight brokerage Convoy on its “Do Not Buy” list, indicating that it would no longer pay carriers for Convoy loads.
Small carriers and owner-operators use factoring companies to get paid immediately for hauling shipments: The factor buys the invoice from the carrier and collects from the broker later. The factor has to assess the creditworthiness of the brokers whose payments it’s buying, and that’s where the trouble with Convoy came.
In a phone conversation with FreightWaves, an official at OTR Solutions confirmed that this screenshot posted to the carrier Facebook group Rate Per Mile Masters on Thursday night was authentic:
OTR asked Convoy to make an advanced payment for its current outstanding balance.
A week ago, FreightWaves reported that Convoy hired an investment banker to advise the company on strategic interest, including a possible sale of the business.
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Robin Milender
Freight brokers make 50 to 100 plus percent on loads this is why you rarely here them go out of business. Factoring companies are not much better. As a O/O or small fleet owner your better off acquiring your own brokerage authority and dealing with customers directly. With such a small profit to the truck using brokers and factoring you are just giving your profit away.
DJTransport
From what FreightWave has said the problem has been resolved
Small Veteran Carrier
Good companies pay their debts on time. Under bidding causes these problems and it’s always the owner operators that take it on the chin. OTR are correct for putting them on blast. Let’s not forget large companies stay large by short changing smaller companies…eliminating the competition.
Elvin Santana
My factoring company (Loves Financial Services) sent us a “NO BUY DEBTOR” notice about Convoy as well.