Whether you are a new company or an established one entering an aggressive growth phase, credit is everything. Potential partners want to know that a company has what it takes to stay the course, so working with a customer with subpar credit may be unsavory or even unacceptable for some.
“As our economy enters into an unprecedented period, having good credit has become more important than ever,” said ComFreight CEO Steve Kochan. “A couple of bad customers can essentially put you out of business.”
ComFreight, a pioneer of risk mitigation within the logistics industry, has made it the company’s mission to help brokers and shippers alike build good credit while eliminating the credit risk that is inherent with doing business.
“Often freight brokers and carriers are relying on their own internal efforts or their factoring company to steer them away from traditional credit risks, but at the end of the day the credit risk ultimately lands on the brokerage,” Kochan said.
ComFreight, however, can remove this credit risk if the broker or shipper adheres to the company’s credit decision. But it’s not an all-or-nothing arrangement.
“When we turn a company away for having subpar credit, we allow them to enroll in a credit-building program instead of blocking them altogether. This allows the struggling company to build credit while at the same time allowing ComFreight to establish enough of a payment history to begin extending credit on our customers behalf,” Kochan said.
Cris De La Rosa, Abound Logistics’ senior logistics account executive, said, “One of the perks of working with ComFreight is protecting yourself and your credit in such a way that other factoring companies don’t offer. Eliminating some of that credit risk has been something that has been important to us. If we have a prospect, we need to make sure that prospect is an actual business and not someone that is going to scam us out of money.”
ComFreight is an ideal option for newer brokerages like Abound because, unlike a traditional factoring company, it does not hold back a reserve unless the brokers want their margins advanced. Even then, ComFreight’s reserve is the lowest available, according to Kochan.
Not only can ComFreight eliminate credit risk for clients and cut down on fees, the company also speeds up the payment process between shippers and brokers, ensuring brokerages run smoothly. This is done without traditional chargeback requirements for slow payment or additional interest charges being applied to the client.
Quicker payment has been a huge perk for Abound, according to De La Rosa. He said the speedy process allows him to pay his employees – all of whom work on commission – faster and with more regularity.
ComFreight offers this quick-pay program tailored to a broker’s preferred workflow. It also offers various payment methods via a complete digital process.
“By ensuring carriers are paid faster, ComFreight is helping customers improve their own credit,” said Kochan.