Fleet Factoring Allows Investments in the Future
December 18th, 2017 marked the milestone for the trucking industry. On that day the Electronic Logging Device (ELD) went into effect, highlighting technology as an integral aspect of trucking, and a transition from the old ways to the new. Even prior to that date, and for most of 2017, the industry experienced the biggest year in technology and innovation. These advancements also brought attention to what was coming for the future of trucking. Not only were investors pouring money into the trucking, transportation and logistics arena, that same industry was investing in themselves in order to keep up with the necessary innovations that would keep them on track with progress. Many trucking companies turned to fleet factoring for the capital and the guidance. But let’s step back and look at why the trucking industry is trending in Venture Capital (VC) spending.
Trucking Launches a Trend with Venture Capital and Private Equity
While many PE and VC companies are looking at the development of autonomous vehicles, others are turning to investments within systems and infrastructure. Just because UBER transformed the taxi industry and moving people does not mean the same can be done with moving freight, there is much more to it. However, it is clear that the trucking industry has more longevity than most, so investors are looking at ways to make it more efficient, productive and safe. VC dollars are going toward start-ups that can address those concerns and there are hundreds trying. However, while there may be millions of dollars flowing into the industry, only a sliver of the investment will actually make a difference.
A 2012 study by Harvard Business School senior lecturer Shikhar Ghosh looked at over 2,000 venture-backed companies from 2004 to 2010 that raised at least $1 million. Their success rate? 25%. According to Fast Company, 75% of those firms failed, and as many as 40% never returned a dime to investors.
Of course, smart investors are looking at autonomous vehicles, but they are also looking at advancements in infrastructure like warehouse automation and industrial robots. The not so surprising fact is that the trucking industry is also paying attention and making investments of their own. It is critical for trucking companies to embrace new technologies in order to deliver for current customers and attract potential customers. It is also important to understand and provide new technology to a new generation of drivers who incorporate technology in every aspect of their lives. But investment requires money and cash flow is critical. That is why many trucking companies are turning to fleet factoring.
How Factoring Can Help with Investment Strategies
In order to keep up with an ever-evolving environment, the company needs to have focus and a clear strategy. It is not enough to say you are embracing technology and another to actually implement it. A strategy for growth will include technology, but it will not happen over-night or all at once. An experienced fleet factoring company will provide expertise in augmented reality, vendor management and screening to enable the trucking company to focus on investment strategies. The same factoring contract can also provide cash flow for operations and expansion:
- Automated vehicle and robotic technologies
- IT related systems like ERP and Payment
- Automated fleet management tools
- Cloud based data analytics
- GPS and location technology
- Mobile Technology
Investing in tech has also transformed safety in the industry. Equipping vehicles and drivers with collision avoidance systems, proximity detectors, integrated communications systems and mobile tools will help to reduce collisions on the road and save lives. There is even augmented reality technology that can provide a virtual vision of the environment and what lies ahead for the driver.
This “layering tool” also provides a safer and more efficient flow of data to the operator, everything from directions, real-time lane traffic and congestion management, to load and vehicle monitoring; all without having to take your eyes off of the road. Such technology will also make drivers more efficient and enable them to make smarter, savvier decisions as they drive.
Augmented Reality (AR) and Virtual Reality (VR) may be a long way off for some companies, but the technology is here, and the time is right for company owners to embrace the idea as part of their growth strategy. In the meantime, fleet factoring can handle the most basic needs that will help to get the company on track and ready to consider a forward-thinking strategy for the future. Taking control of the cash flow will enable the company to take the next step