Software has become an essential piece of every freight brokerage. In many businesses, software and technology has become integrated into almost every piece of the shipping process: pricing loads for customers, vetting carriers, identifying routes, coordinating with your team, managing documents, accounting, payments, and more.

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With a greater and greater dependence on software, more brokers are getting bogged down in tech overload. Sometimes brokers are using software to automate tasks that shouldn’t be, or using it as a patchwork fix for underlying organizational issues. Others may find that they have too many systems and apps, some with overlapping functionality, and aren't sure which are essential and which can be ditched.

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In this software deep dive we’ll explore the most essential pieces of freight broker software, what it should be used for (and which pieces of tech can be skipped), how some essential pieces of software can rapidly improve your brokerage’s revenue and profitability, and more. We’ll also review some of our favorite providers for today’s modern SmartBroker, so you know exactly where to go for the latest and greatest in freight tech.

Load boards have become an essential resource for freight brokers across the country. They are indispensable tools that help brokers quickly and efficiently locate carriers and connect them with new loads. The top load boards for brokers are full-service tools to find carriers, build new relationships, expand your business, and more.

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Since load boards are such an essential piece of every brokerage, we thought brokers might benefit from our top 3 best load boards for freight brokers, and why we’ve chosen these boards over the many options out there. 

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Does it feel like your team is constantly bouncing between one software or another to get the full picture of your brokerage? Every modern freight broker uses software and technology to enhance their operations, but sometimes it seems like these systems can cause almost as much pain as they solve when you need six different logins just to find out the status of a load.

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That’s where freight software integrations come in. Integrating your tech stack so all of your software communicates with each other is no longer an option - it’s a necessity. If you feel like you or your team are getting bogged down in redundant systems that all only give one small piece of the logistics puzzle, it may be time to re-evaluate your brokerage’s software integrations. 

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In this article we’ll review the importance of integrating all of your brokerage’s software systems into one cohesive ecosystem. Creating these integrations makes it easy to find information at a glance, and gives you and your team the time back that they spend swapping between systems, reduces erroneous or double entries of information, and more. 

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All integrations aren’t created equal, though. When integrating your systems it’s important to keep in mind your brokerage’s existing workflows and systems, and ensure that these integrations work FOR you, not against you. If an integration isn’t set up correctly, you may find data is entered incorrectly, is stored in the wrong place, or isn’t updated in every system, causing confusion and bogging down your operation. Keep reading to find out exactly what needs to happen to ensure your systems are integrated correctly, efficiently, and in a way that helps your freight brokerage grow.

Sales representatives should be selling. Not spending hours on administrative work. The lack of synchronization between your TMS (transportation management system) and full technology stack causes unnecessary friction between your billing department and reps. TMS integrations can save your reps hours that they can use to hit the phones.  

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A TMS is an essential part of every brokerage. Most brokers spend a significant amount of time inside their TMS, but don’t realize it could be providing even more to their business through third-party software integrations. 

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When a broker’s TMS is integrated with the rest of their tech stack, brokers and their staff can gain new insights, instantly access information across their organization, and improve efficiency significantly.

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Below we’ll cover some of the most important TMS integrations, how your TMS can integrate with payments and factoring even if there isn’t an “official” integration, and what to do if your TMS doesn’t integrate with these essential systems.

The logistics industry faces a growing menace - double brokering. 

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This deceptive practice involves fraudulent intermediaries, posing as genuine carriers or brokers, who subcontract jobs without the shipper's awareness or approval. The repercussions of this fraud include delayed deliveries, lost revenue, and potential legal complications.

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Recent reports indicate a concerning trend: TIA has reported a staggering 200% increase in double brokering cases last year. As noted by Anne Reinke, TIA's President and CEO, in an interview with Vishnu Rajamanickam, an oversaturated market has led to "too many carriers chasing less freight," contributing to double brokering.

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The stakes are high. 

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Double brokering is not just deceitful - it's illegal. The practice can cost your freight brokerage time and money and tarnish your reputation. 

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This article aims to arm you with crucial information to identify and prevent this industry menace. We'll explore the mechanics and consequences of double brokering, equipping you with the knowledge to safeguard your operations and maintain the industry's integrity.

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What is a double broker? 

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A double broker is a fraudulent intermediary who claims to be able to arrange transportation services but instead subcontracts the job to another carrier or broker without the shipper's knowledge. 

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There are two common instances:

1. Double broker posing as a freight broker.
2. Double broker posing as a carrier.

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Double Broker Posing as a Freight Broker

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There are instances of double brokering when a broker, who has already agreed to transport a shipment, gives the job to another broker without the permission or knowledge of the shipper. The result is a long chain of intermediaries, each taking a cut of the profits, ultimately reducing the carrier's earnings and increasing the shipper's costs.

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Double Broker Posing as a Carrier

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Double brokering can also occur when a broker arranges for a "carrier" to transport a load, but that "carrier" then outsources the task to another carrier for a reduced rate. The first carrier keeps the price difference without informing the initiating broker about the change. As a result, the broker remains unaware of the second carrier's safety record, insurance coverage, and other potential legal issues until problems arise. 

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In some cases, the carrier that transports the cargo doesn't receive payment from the carrier involved in double brokering. If the shipper who initiated the shipment receives complaints about non-payment, it can result in a complicated dispute involving three or four parties, including the broker.

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Identifying Double Brokers  

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Spotting and preventing double brokering is an essential skill for all stakeholders at every level of a company. By being watchful and proactive, industry participants can foster an environment of trust and fairness, safeguarding the industry's future and reinforcing its reputation for excellence.

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Vetting your Carriers 

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To avoid double brokering, working within your established carrier network is preferable. However, sometimes new clients require carriers out of network with specific equipment. It is crucial to evaluate new carriers thoroughly.

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There isn't a single tell-tale sign of a double broker, but certain key factors can help differentiate between potential double brokers and reputable carriers.

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Suggested Vetting Criteria:

1. Business longevity - The easy setup of carrier authority leads to new MC numbers daily. Opting for carriers with longer business histories helps minimize double-brokering risks and promotes the safe transportation of goods.
2. Safety record analysis - Carriers with multiple trucks should have had at least one inspection in the last year.
3. Business address verification - Cross-check their address using tools like HaulHero and TIA Watchdog to ensure it's not a non-business location like a convenience store. 
4. Phone number and email validation using SAFER or Carrier 411 - If there's a mismatch, contact the listed number to discuss the load due to potential identity theft concerns.
5. DAT Directory Seat - Refer to the DAT directory to verify an MC's DAT seat.

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Though not exhaustive, this list serves as a solid foundation. Freight brokers should consider using tools like Carrier 411, Highway, TIA Watchdog, RMIS and Freight Validate. Each brokerage should develop a specific vetting process for new carriers. We can help eliminate double brokers and foster collaboration with authentic, industrious logistics companies by remaining diligent.

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Common Red Flags of a Double Broker

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Navigating the logistics industry requires keen attention to potential red flags that might signify the presence of double brokers. Here are some warning signs to watch out for and the appropriate steps to take if you encounter them:

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Red Flag: Call Center Background Noise

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You're talking to a carrier or dispatcher about a load, and the background noise sounds like a call center. For carriers that claim only 1 or 2 trucks in their fleet, it's even more suspicious if it sounds like a call center. 

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What to do: Do your research. Look for inconsistencies in their authority length, number of power units registered, number of inspections, or reports on Highway, Carrier 411, or TIA Watchdog.

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Red Flag: No haggling

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Negotiating rates is a common practice in the logistics industry. If a carrier does not negotiate, particularly when offered a low rate, it's important to be skeptical, even during a freight recession.

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What to do: Run the lane in DAT or your preferred load board to see if somebody reposted it.

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Red Flag: Driver using gmail

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The driver requested you send the carrier packet to a random Gmail instead of a company email. Be more suspicious when the driver is part of a larger trucking company or fleet. 

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What to do: Call the carrier's company to verify the driver is associated with them and that the email is correct.

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Red Flag: Driver refuses to talk on the phone

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Verifying the driver and carrier before a load is good form. However, if the driver refuses to talk on the phone or a dispatcher refuses to give you driver information, you might have a double broker. Texting and email ONLY are big red flags. 

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What to do: Call the driver's phone number and see if a voicemail is set up. Many double brokers use free texting apps like TextNow or Google Voice for their drivers' numbers. Calling those will send you straight to voicemail or won't have a voicemail created.

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Preventing Double Brokering for a More Trustworthy Logistics Industry

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Double brokering presents a significant challenge within the freight and logistics industry. It undermines trust between carriers and brokers and can lead to a host of issues. Double brokers add an unnecessary layer of complication, often leading to inefficiencies and disruptions that harm service providers and clients.

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However, it is essential to remember that the burden of combating double brokering does not lie solely with individual businesses. Double brokering is an industry-wide issue that calls for an industry-wide response. We urge all players in the freight and logistics sector to take a stand against double brokering by investing in practical tools and resources, developing strict vetting criteria, and maintaining a culture of transparency and ethical practice. Together, we can make strides in eradicating double brokering and fostering a more trustworthy and efficient logistics industry.

Brokers from all over the country are beginning to experience shrinking margins. With the uncertainty of the economy, margins have been declining for the last several years, and brokers are struggling. 

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On top of these recent declines, a recent sentiment analysis by Freight Waves shows broker confidence in near-term profitability approaching all-time lows.

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(Image courtesy Freight Waves)

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This lack of confidence can be attributed to a myriad of issues in the freight industry, such as overcapacity, carriers passing increased costs along to brokers, declining spot rates, and more.

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Below we’ll review four ways brokers can stay lean by cutting costs and improving efficiency, adding new revenue sources, and expanding their business to maximize margins.

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1. Maximize employee efficiency 

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It’s impossible to ignore employee inefficiencies when speaking about shrinking margins. Most brokerage employees spend significant time on mundane tasks that distract from more important activities that drive revenue.

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This is especially true when personnel who could be finding new business are instead bogged down with automatable tasks such as data entry or document organization.

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Action: How to Improve Employee Efficiency

1. Automate Manual Tasks: Implement automation tools into your business to dramatically reduce the amount of time employees spend on data entry, document sorting, and more - freeing up their time to focus on activities that add value to the business.
   
   
2. Prioritize Software Integrations: Many brokers are stuck using outdated software systems that aren’t integrated, causing slow and painful processes. Consider switching to new providers that integrate with your most important tools, such as your TMS,  accounting software, factoring company, and loadboard.
   
   
3. Prioritize User-Friendly Tech: When changing or updating your software systems, ensure you’re choosing software that values simple, user-friendly interfaces. Transitioning to new software can be challenging for everyone involved, and software tools will only improve your operation if your staff uses them.
   
   
4. Use the tools available to you: Most brokers use a factoring company to ensure their carriers are paid quickly and efficiently, but don’t use all of the features they’re already paying for. Leveraging your factoring company’s invoicing and collections process can improve efficiency and take tasks off the plate of employees.
   
   
5. Leverage AI when possible: With new AI tools coming onto the market, there are many ways to improve employee efficiency and even eliminate some tasks. For example, with Denim’s AI-powered auditing system, manual document auditing can be almost entirely automated.

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Result: By reducing, automating, and eliminating time-sucking tasks like these, you can ensure your best employees are spending more time focused on sales and client engagement, directly contributing to improving your brokerage’s margins. 

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2. Monetize QuickPay 

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Brokers aren’t the only ones experiencing tight margins - carriers are starting to feel the pain too. These increased carrier costs are then passed back to brokers, making the problem even worse. 

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With these increased costs, brokers should consider adding a new revenue stream through a QuickPay fee - allowing carriers to choose between faster payments and lower fees. 

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Action: How can brokers counteract shrinking margins caused by increased carrier costs?

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Brokers can counteract increased carrier costs by monetizing quickpay. This gives your brokerage a new revenue stream by charging a fee for faster payments. 

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Carriers who are increasing their prices are given a choice: cut into that margin to receive payment faster, or maintain their margins and stick with an extended payment schedule.

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Note: Some factoring companies such as Denim, don’t charge brokers a fee for making QuickPay available to carriers, meaning brokers get to take home 100% of the proceeds for any QuickPay revenue.

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Result: Adding a QuickPay fee helps brokers improve their margins by adding a new revenue stream that is 100% profit. Many carriers are used to QuickPay fees, and will often choose to pay a small fee to receive payments in days instead of weeks. This new revenue stream can be essential in combating shrinking margins for brokerages.

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3. Negotiate Payment Terms With Clients 

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Rates are only one piece of the puzzle when it comes to negotiating contracts with your shippers. Negotiating payment terms can be just as lucrative as negotiating rates for your business. 

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If your shipper’s payment terms are over 30+ days, you have some negotiating to do. Money in the bank better serves your brokerage instead of money held up by a client. Borrowing money against these shippers through invoice factoring is also more costly the longer the payment terms. These payment terms can have a significant impact on your margins and cash flow, and only exacerbate the issues caused by outside influences.

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Action: How to negotiate payment terms with customers to improve margins

• Update contract terms to improve cash flow:some text
  • Most brokers are stuck with contracts that encourage customers to slow-walk payments to brokers, leaving them stuck holding the bag when carriers need to be paid. 
  • Updating your contract terms to encourage faster payments can massively improve your cash flow, even if your brokerage needs to offer customers a slight discount to do so.

Every broker knows that keeping a close eye on your cash flow is an essential piece of the business. Without careful monitoring, it’s easy to let costs balloon out of control and for economic forces to have their way with your business.

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A Profit and Loss (P&L) Statement is a tool used by brokerages of every size to monitor and understand the financial health of your business. This document may also be referred to as an income statement, and provides a clear snapshot of your company’s revenues and expenses over a specific period. This makes a P&L statement a vital tool to gauge your operations performance, make informed decisions, and plan for future growth.

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Read on to learn how to put together a P&L.

A line of credit has traditionally been the most appealing financing option for the logistics industry.

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Until now. 

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Rate hikes by the Federal Reserve over the last three years have made it more challenging for businesses including freight brokers, fleets, and logistics companies to access affordable lines of credit.

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In light of these tighter credit conditions, finding alternative financing solutions is crucial to ensure steady cash flow and remain competitive. Freight factoring emerges as a competitive option that offers more than just financing for logistics businesses. 

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Line of Credit Drawbacks in 2025

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The Federal Reserve (Fed) raised interest rates 11 times between March 2022 and July 2023 from a low 0.08% to a 21 year high of 5.5%. The goal of the hikes was to reduce inflation, however inflation remains higher than anticipated in 2025. As a result, the Fed plans to hold rates steady for now. 

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 So what does this mean for you and your financing options? A lot.

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The federal funds rate is the interest rate at which banks lend money to each other overnight. Higher federal funds rates make it more expensive for banks to borrow money from each other. As a result, banks usually pass on this increased cost to their customers by raising interest rates on various loans, including business lines of credit.

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There are 3 major impacts that the increasing rates have on businesses applying for a line of credit.

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1. Higher borrowing costs

The interest charged on a line of credit will depend on the prime rate and an additional percentage determined by the lender, known as the plus.

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The prime rate is the interest rate commercial banks charge their most credit worthy customers. It is a benchmark for various types of loans. And the prime rate is influenced by, you guessed it, the federal funding rate.

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Banks have been increasing prime rates as the Federal Reserve has increased their funding rates. Currently, the prime rate is 8.5%, up from 3.5% in April of 2022. Any new lines of credits opened today would be paying 142% more interest than two year ago.

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The plus percentage added to the prime rate is determined by the lender and is based on your creditworthiness, business financials, collateral etc.

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In our current high-interest rate environment, you face higher borrowing costs, affecting your cash flow and overall financial health.

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2. Tighter credit conditions

Banks have become more cautious with their lending practices in response to a higher federal funds rate, making it more challenging for businesses to obtain a line of credit and secure favorable terms.

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Due to increased risk perception, lenders are reducing the amount of credit they are willing to extend. The Federal Reserve Bank of Dallas surveyed 71 banks in March of 2023, and found a significant drop in lending. A smaller credit limit makes scaling your brokerage difficult.

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Since banks are lending less money in this economy, they are imposing tighter requirements. You can expect requests for higher credit scores, robust financials, more collateral, and lower loan-to-value (LTV) ratios.

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Even if your brokerage qualifies for a line of credit, you will still face stricter contract terms and conditions. Lenders may offer variable rates, shorter loan terms, impose additional fees or penalties. They may also include more restrictive covenants in loan agreements to manage the increased risks associated with high borrowing costs and protect their interests.

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3. Variable interest rates

Variable interest rates appeal to borrowers when market interest rates are declining (like in 2020-2021). However, borrowers may face higher payments if market interest rates rise, making it more expensive to repay the loan.

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Banks are more likely to offer variable rates in this market because the Fed will likely continue to increase rates until inflation stabilizes, likely by the end of 2024.

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The variable interest rate is adjusted at regular intervals, such as monthly, quarterly, or annually. The loan agreement specifies the adjustment period and determines how frequently the interest rate can change.

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Lines of credit with variable interest rates can involve more uncertainty than fixed-rate loans or financing options like factoring.

Factoring is a Competitive Alternative to Line of Credit  

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In today’s uncertain financial climate, factoring has become a more attractive and reliable option for trucking businesses seeking financing.

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Freight factoring involves selling your accounts receivable to a factoring company in exchange for immediate cash. Funds are accessible without incurring debt, making it a more attractive option in any economy.

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Unlike lines of credit, agreed upon factoring rates do not change based on market conditions. For example, a 3% factoring fee will remain the same regardless of whether the federal interest rates increase or decrease. Factoring rates are typically volume or time based and can vary between companies. But they remain consistent once established.

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Freight factoring also provides several benefits, including quick access to cash, simplified approval processes, and no need for collateral, making it an accessible financing option in various market situations. Additionally, factoring companies offer support for your back-office operations in several ways.

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The top five benefits of factoring include: 

1. Improved cash flow: Access funds within 24-48 hours vs. waiting 30+ days
2. Protect your business: Free credit checks on customers to avoid risky deals and double brokers.
3. Automated invoicing and collections: Save hours with auto-generated invoices and managed collections.
4. Freight Payment Management: Schedule carrier payments, including QuickPay
5. Scalability: Factoring services grow with your business, allowing you to access more funds as your revenue increases.

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Factoring is Just As Flexible as a Line of Credit 

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A common misconception is that factoring is restrictive and costly compared to a line of credit. However, this couldn’t be further from the truth at Denim.

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Denim’s factoring solutions are among the most flexible and comprehensive in the industry, offering customizable carrier payments, invoicing, and collections. Client’s only pay for the capital they’re using at any given time, which mirrors the flexibility of a line of credit without the need to go through a bank.

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With Denim’s factoring solutions, you are in control of your rate. Here are two ways you can influence your rate: 

• Flex Factoring - Denim offers prorated discounts for delaying advances - yours and contractors.
• DSO Pricing - Denim adjusts the factoring fee based on your shipper’s days to pay. The rate is broken into a daily rate, so you only pay for the days you need to borrow. 

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By leveraging these options, Denim clients can effectively manage their rates and only borrow what they need, ensuring cost-effective and flexible financing. Use our factoring calculator to see how you could save today! 

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Factoring vs. Line of Credit

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This table provides a high-level comparison between factoring and lines of credit for your business. While factoring offers faster access to funds and additional support services, lines of credit may provide more flexibility in terms of fund usage.

Breaking Down the Costs

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Eliminating all other considerations, let’s take a look at the cost of factoring compared to interest on a line of credit.Let’s assume a freight brokerage is moving a $5,000 load with net-30 day payment and the carrier agrees to do it for $4,500.

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SCENARIO 1:

Factoring at a 1% rate

If the factoring company charges a 1% factoring fee on the invoice total. We can calculate the factoring fee for this load as follows:

Factoring fee = $5,000 * 0.1

Factoring fee = $50

With factoring the freight broker would receive$5,000 - $4,500 - $50 (factoring fee) = $450

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SCENARIO 2:

Line of Credit at 13%

(8% prime rate + 5%)

If the freight broker uses a line of credit with an interest rate of 13% to pay the carrier, the interest cost is calculated as follows:

Interest cost = Principal amount *(Interest rate per year / 365 days) * Number of days

Interest cost = $4,500 * (13% / 365) * 30

Interest cost = $47.88 (approximately)

The interest cost for the freight broker using a line of credit at 13% to pay the carrier $4,500 for 30 days would be approximately $47.88.

With the line of credit, the freight broker would receive:

$5,000 - $4,500 - $47.88 (interest cost) = $452.12

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While the costs are within a few dollars of being the same, the major value add for brokers using factoring now over a line of credit is access to smart freight payment features through their factoring provider. Big banks do not have freight and logistics specialization and will never provide niche services like invoicing, collections, reporting, and carrier document collection. Factoring will always remain accessible regardless of credit score and the ideal route for freight companies to receive fast, reliable financing.

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Grow Your Freight Brokerage with Denim

In the current economic climate, freight factoring and a line of credit have comparable borrowing costs. However, factoring is a more favorable and accessible financing solution. 

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Factoring offers several advantages, including faster approval times, more accessible eligibility criteria, and immediate access to cash upon selling invoices. Factoring companies also provide valuable services like invoicing and collections support, credit checks, and freight payment management.

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Most importantly, factoring fees are not directly tied to interest rates. With Denim, factoring rates mirror a line of credit providing the flexibility businesses need to scale. 

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Securing a line of credit in a high-interest-rate environment can be more challenging due to stricter lending standards, reduced credit availability, and potentially unfavorable contract terms, such as variable interest rates.

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Don’t let rising federal interest rates derail your freight brokerage’s success. Schedule a demo with Denim today and seize the opportunity for reliable funding to scale your brokerage.

Comparing our services with HaulPay? We agree with your approach. 

Your factoring company is an extension of your team. And just like you'd vet new employees, you must vet your factoring company. Before signing the contract, you should understand the benefits or downsides of the factoring company's platform, integrations, and financial solutions. 

While we can claim we're the best factoring company for you, we want to let our offerings do the talking. 

Let's compare Denim vs. HaulPay and see which offers the best invoice factoring services.

Denim vs. HaulPay: Overview  

Since its inception in 2019, Denim has swiftly climbed the ranks in the factoring business world. After rebranding and securing a $126 million in Series B funding from well-respected investors like Crosslink Capital, Anthemis, and TruckVC, Denim has become a reliable factoring partner for over 200 freight brokers and fleets looking to scale. Its standout features? Flexible factoring and back-office automation tools that slash invoicing time by a staggering 75%. Plus, it's worth noting that Denim has been honored in the FreightTech 100 for two consecutive years, underscoring its innovative contributions to the industry.

On the flip side, HaulPay began its journey as ComFreight, a load board, back in 2011. Fast forward to 2023, and ComFreight was acquired by Dakota Financial. This acquisition led to a significant rebranding to HaulPay, the name of their payment product. HaulPay casts a wide net, offering its services to carriers and freight brokers, making it a versatile player in the field.

While Denim and HaulPay both provide customized factoring solutions tailored for freight brokers and fleets, a closer look reveals some key differences between their offerings:

• Recourse versus non-recourse factoring
• Factoring minimums
• QuickPay fees
• Platform features
• Integrations

Keep reading to find the perfect factoring partner that aligns with your unique needs, whether you're leaning towards Denim's innovative approach or HaulPay's comprehensive solutions.

Denim vs. HaulPay: Factoring 

For small freight businesses, cash flow is king. That's where Denim and HaulPay come into play, offering a lifeline through freight factoring. Though both companies aim to solve cash flow challenges, their approaches have some key differences.

Non-Recourse vs. Recourse Factoring 

Denim provides recourse factoring, where the broker might have to pay back the advance if the client fails to pay on time. This arrangement allows Denim to offer lower fees and more flexible credit lines by reducing their risk. To help prevent any surprises, Denim also offers complimentary credit checks and monitoring, minimizing the likelihood of chargebacks.

HaulPay opts for non-recourse factoring, offering a layer of protection against the financial instability of shippers. However, it's important to note that this protection doesn't extend to all scenarios, such as contractual disputes or billing inaccuracies. HaulPay's policy is to seek repayment if the documentation provided by the broker is incorrect or lacks appropriate paperwork.

Minimum Requirements 

Denim and HaulPay offer the flexibility to factor load by load or shipper by shipper. 

Here's where freedom meets restriction. With Denim, factor what you want, when you want, no strings attached. HaulPay sets a minimum bar. Don't hit their monthly factoring minimum; you'll receive a fee. Factoring minimums can be a significant consideration during slower business periods.

QuickPay

QuickPay services focus on expedited payments to carriers. Denim simplifies this process, offering next-day payments without additional fees for the broker or carrier. Denim customers have the option to monetize the QuickPay option to their carriers as they see fit. This service also provides the option to select the payment timing for further flexibility.

HaulPay’s approach to QuickPay involves a fee and set payment timelines. The model allows for flexibility in payment timing but introduces additional costs, which can be passed on to the carrier or shared. The company’s fees range from 1-3% depending on payment timing.

While both Denim and HaulPay aim to ease cash flow for freight brokers and carriers, their approaches and services offer distinct choices. Understanding the differences between recourse and non-recourse factoring, minimum requirements, and QuickPay options is essential for selecting the best financial partner for your needs.

Denim vs. HaulPay: Platform and Features

Leveraging technology to boost efficiency and reduce costs is essential in the logistics industry. Denim and HaulPay each offer unique platforms with automation tools to support small freight businesses. Here's how their offerings compare:

Denim Platform Features

• Flexible Factoring: Denim puts you in charge, allowing you to adjust the payment dates for both your advance and your contractor's. The longer the delay, the lower the cost. 
• Analytics Dashboard: A comprehensive dashboard provides insights into your business performance, featuring trend analysis, real-time alerts, and crucial metrics like account balances and days sales outstanding (DSO).
• Early Invoicing: With only proof of delivery, you can kickstart the payment process, ensuring faster cash flow while handling contractor invoices.
• Document Management: Securely request and manage documents within Denim's platform, simplifying paperwork and ensuring easy access to important files.
• Document Audit: Instantly verify the accuracy of key documents, enhancing operational efficiency.
• Denim for Teams: Facilitate collaboration across your team with tailored roles and permissions, safeguarding sensitive data.
• Carrier Portal: Empower carriers with a self-service portal, giving them control over their finances.

HaulPay’s Biggest Platform Features (that’ve we’ve identified)

• Loadboard: A dynamic tool for brokers to post loads, search for trucks, and access market rates. The platform supports QuickPay and allows for private or group postings.
• Mobile App: Handle payment requests and invoice sales on the go, with added functionalities like credit checks and a comprehensive view of your financial transactions.

Both platforms offer a range of features to streamline freight business operations. Whether through advanced analytics and document management with Denim or the convenience of mobile access and a dedicated load board with HaulPay, each service provider brings something valuable.

Denim vs. HaulPay: Integrations

Denim and HaulPay are at the forefront of using technology to streamline operations for small freight businesses. They feature open APIs, allowing seamless integration with your Transportation Management System (TMS). This capability is essential for automating data synchronization, saving valuable time, and minimizing manual entry errors.

Denim stands out with many integrations, supporting connections with 9 different TMS and 3 additional partners. This extensive network offers businesses increased flexibility and efficiency in their operations. Denim's integrations include:

• Ascend
• EKA
• EZ Loader
• Logistically
• MyCarrierPortal
• Port TMS
• QuickBooks
• Quote Factory
• TAI
• Turvo
• Zapier
• ZUUM

HaulPay offers valuable integration capabilities as well, with a total of 6 platforms, including 3 TMS. These integrations provide crucial tools for businesses to enhance their efficiency. HaulPay’s integrations include:

• Aljex
• Cargo Chief
• Descartes
• MyCarrierPortal
• TAI
• Trans Credit

Denim distinguishes itself further with two-way integrations for platforms such as Turvo, Quote Factory, and EKA. This feature facilitates a seamless flow of information—Denim not only pulls payable and receivable data effortlessly but also sends back updates on payments and collections directly to your TMS. Two-way integrations ensure real-time insight into the financial status of your operations, significantly enhancing management efficiency.

Denim vs. HaulPay: Which factoring company is best for you? 

If your brokerage is growing, you need a financial partner that will increase your business and one you can trust. You'll require a team of experts to monitor your customer's credit scores and payment timelines and answer questions whenever you run into an issue. 

At Denim, we are the best factoring company for your business. We offer flexible factoring solutions that put you in the driver's seat. At the helm, you can choose which loads to factor and even delay advances for additional cost savings. With our back-office automation tools, you can save hours on manual data entry to focus on what matters most: growing your business and building carrier relationships. 

Denim takes the stress out of factoring. If you want to switch factoring companies, check our pricing FAQ and schedule a demo today.

In this uncertain economy it can be incredibly tempting for brokers to resort to non-recourse freight factoring to remove risk from their business. 

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While non-recourse factoring may sound like a great deal - putting your factoring company on the hook in the case of customer default, it also comes with a significant increase in expenses, fees, and restrictions on your business and clients.

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In this article, we’ll explore the best alternatives to non-recourse freight factoring that you can implement in your business for 2024, so you can improve your cash flow, de-risk your business, and accelerate your growth.

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Alternative 1: Recourse Factoring

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Recourse factoring is essentially the same process as non-recourse factoring, where a broker sells their open invoices to a factoring company at a discount, and gets paid a percentage of the invoice value up-front. The big difference is that with recourse factoring, the broker maintains responsibility for collecting unpaid invoices.

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When paired with other risk-mitigation strategies, recourse factoring is often less expensive and has fewer restrictions on your business than non-recourse factoring. 

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Most non-recourse factoring companies charge additional fees to compensate for the risks the factoring company is taking on. They also will run additional credit checks on your customers, and often only cover losses in the event of bankruptcy. These restrictions are reduced or removed entirely from recourse factoring agreements.

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Want to find out more? We compare recourse vs. non-recourse factoring in detail here.

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Alternative 2: Invoice or Receivables Financing

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Invoice financing is very similar to factoring, with one distinct difference: You continue to own and be responsible for any invoices. Instead of being sold at a discount to a factoring company, these invoices are used as collateral for a short-term loan. 

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Invoice financing has several pros and cons: First, you maintain full control over your invoices and collections process, and don’t involve your customers in your financing. This also means lenders are less likely to perform credit checks on your customers - but they may have additional criteria that your business must meet before providing the loan.

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Alternative 3: Line(s) of credit

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Lines of credit are another popular option for brokers to use instead of non-recourse factoring. The advantages of lines of credit are similar to those of invoice financing and bank loans - they keep your customers out of the lending process, and your business qualifies based strictly on its own merits.

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A line of credit can also be used for a variety of business needs beyond just paying carriers, such as financing expansion, hiring, and so on. The downside is that, in the current high-interest rate environment, lines of credit can get very expensive very fast.

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In addition to the various credit checks and financial statements a bank may require, a LOC adds debt to your balance sheet and requires consistent long-term payments that may restrict your cash flow. 

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They’re also often much more cumbersome than factoring agreements - where you can be waiting weeks or months to access funds vs. 24-48 hours with factoring.

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Here are some of the most important factors to consider when choosing between a line of credit and factoring:

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Want to learn more? Download our Factoring vs. Line of Credit ebook here.

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Alternative 4: Self-Financing

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One alternative for well-funded brokers is self-financing. This method of financing requires brokers to have access to large cash reserves, but provides full control over your financing and avoids cumbersome loan repayments.

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While there are some upsides to self-financing, there are also a few downsides. The most obvious is the amount of cash required to finance your operations consistently. Your team will also lack support for payables, meaning you’re on your own for options carriers love like QuickPay. 

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Brokers who self-finance may also find themselves running into a cash crunch if shippers consistently pay late, or during economic booms where your reserves don’t scale with demand. During large spikes in volume, you may find it difficult to consistently pay carriers quickly enough to keep them happy.

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Alternative 5: Bank, Government, or Private loans

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Similar to a line of credit, a broker may approach a bank, the government, or a private lender for a short or long-term loan to improve their cash reserves.

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These loans often have more favorable terms than lines of credit, but often come with other restrictions and limitations. For example, SBA loans have specific size requirements, documentation requirements, restrictions on how funds can be used, and may not lend to you if you can get funding from other sources.

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These loans may also require collateral, but do allow you to remove customers from the lending process similar to lines of credit and invoice financing. 

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Alternative 6: Receivable insurance

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Receivables insurance is a method of risk management that brokers may want to use in addition to some of the financing options above. This involves a business insurance policy that covers losses on a broker's receivables, up to a certain amount. 

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This can provide peace of mind to brokers who have many loads on the road, and want to avoid a catastrophic event that might impact their cash flow.

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Unfortunately, there are also a few downsides. Receivables insurance isn’t cheap, and is an additional cost on top of any financing costs you may incur. These policies also often only cover catastrophic losses, and don’t provide any cash advances or support for your ongoing operations.

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Alternative 7: Risk mitigation and management

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Regardless of the financing options you choose, we always recommend brokers implement risk-management strategies to maintain a healthy operation.

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These strategies should be used in addition to financing options like factoring, and when properly implemented can be both more cost-effective and safer than non-recourse factoring.

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Here are some of our top risk mitigation strategies for brokers:

1. Diversify your client base with a wide variety of customers across industries, geographic locations, and cargo types.
2. Perform credit checks on customers, and implement your own client vetting criteria. 
3. Monitor customer payments and business health - and be aware of any risks posed by having too much of your business dependent on one or two customers.
4. Monitor the health and stability of the market as a whole, and create backup plans in the event of a downturn. 

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With the implementation of these risk mitigation measures, most brokers find that they’re comfortable using full recourse factoring to finance their business because they’re more confident in their client base and business health.

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Conclusion

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As a broker, it may be tempting to use non-recourse financing to mitigate the potential risks of customer bankruptcy. In reality, there are significantly less expensive and more effective ways of de-risking your business while improving the financial profile of your company.

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Alternatives such as recourse factoring, lines of credit or loans, self-funding, and more are all ways to improve your financial health with fewer fees, and can be less risky than non-recourse factoring when paired with risk mitigation strategies.

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Want to learn more about how to improve your cash flow, get best-in-class finance tools and dashboards, and streamline your back-office operations? Click here to learn about factoring with Denim get started today.

Growing a brokerage is hard, and most brokers know it’s important to maintain access to working capital through freight factoring to aid their growth. Yet one dreaded term will often cause brokers to stop in their tracks: the personal guarantee.

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Freight brokers often shy away from signing personal guarantees because they see them as too risky, controversial, or limiting. While this can sometimes be the case, freight brokers can use personal guarantees to their advantage.

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In this article we’ll review what personal guarantees are, the purpose they serve, why they matter, and how they can be a useful tool for many brokerages to get a leg up on the competition.

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What is a Personal Guarantee? 

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In the context of freight factoring, a personal guarantee is simply a promise made to the factoring company that they will be able to recover the advance provided to a brokerage. Factoring companies use personal guarantees as a way to ensure that funds that are lent out will be repaid. 

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It’s essentially a backstop that a factor uses in the case of a broker’s customer refusing to pay an invoice or going bankrupt. Personal guarantees generally come in two forms, a limited guarantee and an unlimited guarantee.

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• Limited guarantees: A limited guarantee caps the amount that the guarantor (in this case, the broker who is borrowing funds) would be responsible for. These types of personal guarantees are generally set to a specific dollar amount or percentage of the debt, and are more common when there may be multiple entities that can pay some portion of the debt.
• Unlimited guarantees: Unlimited guarantees do not have a cap, and mean that the broker will be responsible for the entirety of the outstanding balance of the debt. 

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How Personal Guarantees Work for Freight Brokers

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Personal guarantees are terms that will be in the contract between a freight broker (borrower) and the factoring company (lender). These terms will be similar to other lending agreements between business borrowers and lenders, and are often used to secure credit when the borrower has a limited credit history. 

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Personal guarantees allow borrowers (in this case, the freight broker) to qualify for a line of credit that they otherwise normally would not qualify for or to secure a more favorable rate. 

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A guarantee in your contract may be under a variety of headings or clauses in your contract, such as:

• “Personal Guarantee”
• “Personal Guaranty” 
• “Guarantee Agreement”
• “Guarantee and Indemnity”
• “Grant of Security Interest”
• “Default”
• Etc.

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These sections vary based on the factoring company and terms of the agreement. Consult an attorney for more information.

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When a personal guarantee is made between a broker and a factoring company, the factoring company may run a credit check on the applicant (generally the business owner), in addition to checking the credit of the business itself. The lender may also ask the borrower to pledge personal assets such as checking or savings accounts, real estate, vehicles, etc. as collateral to secure the loan. 

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What Businesses Sign Personal Guarantees?

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There are several reasons a business owner may need to sign a personal guarantee. Some of the most common scenarios are in new or small businesses that are still building up a solid credit history. 

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Many business owners also choose to sign an additional personal guarantee because it helps them secure more favorable rates or terms with the lender. These business owners are confident in the growth of their business and see personal guarantees as a low-risk way to improve their cash flow. 

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This tactic has even been used by some of the most famous business people in the world, such as former President Trump who personally guaranteed $421 million in debt. 

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According to a recent Small Business Credit Survey conducted by the Federal Reserve Banks, upwards of 59% of small businesses use a personal guarantee to secure funding. 

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Personal guarantees are incredibly common, and shouldn’t discourage brokers from engaging a factoring company.

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Why are Personal Guarantees Used in Factoring Agreements? 

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The primary goal of personal guarantees is to protect the lender (factoring company) from bad actors. It’s incredibly easy these days to register an LLC, accumulate a significant amount of unsecured debt, and then declare bankruptcy leaving the lenders without any recourse. 

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Providing credit to new and small businesses carries significant risk for the lender, and personal guarantees are a common way to mitigate that risk, and in turn offer lower rates to clients.

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Without personal guarantees, lending rates would skyrocket and eat into the broker's cash flow, creating a lose-lose situation for everyone involved. When freight factoring companies like Denim can limit this risk through a personal guarantee or collateral, brokers can secure significantly better rates, improve their cash flow, and maintain healthy lending relationships.

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The vast majority of brokers should not be concerned about providing a personal guarantee to freight factoring companies.

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If you’re doing your best to run a healthy business and believe in your company and your clients, then you have little to worry about. Personal guarantees are rarely called upon, and usually only as a last resort due to extreme cases like fraud, gross mismanagement, or a broker’s entire client base going out of business.

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The best way to ensure your business isn’t one of these rare edge cases is to continuously diversify your portfolio of clients. The freight brokers at the highest risk are those who depend on one or two large customers for the majority of their business. 

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Diversifying your client base will eliminate the vast majority of scenarios where personal guarantees would be called upon. 

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Personal Guarantee Alternatives 

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There are a few alternatives to personal guarantees that are less common but still provide some protection for the lender and borrower. These can include validity agreements, credit insurance, or other types of collateral to secure the loan. 

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These alternatives have varying levels of protection, requirements, and pros and cons. For example, credit insurance would protect a brokerage’s assets in the event of a default, but comes with additional costs, fees, and credit checks. 

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Personal guarantees are often the least expensive way for both parties to secure a loan, meaning lower rates, fewer fees, and a smoother borrowing experience. 

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Does Denim’s Contract Include Personal Guarantees?

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At Denim we specialize in freight factoring for freight brokers and fleets, and we do require personal guarantees in our contracts. Personal guarantees are a standard practice in the industry, and are required by most freight factoring companies.

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Using personal guarantees to secure loans allows us to offer some of the lowest rates in the industry, even to brokers with little to no credit history. 

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These guarantees may seem daunting, but they’re a fundamental part of lending and borrowing in the freight industry where cash flow is king. 

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For freight brokers, embracing personal guarantees can open the doors to better rates, stronger relationships with your factoring company, and a clear path for growth. 

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If you’re ready to get started on improving your cash flow, building your business, and streamlining your financial operations, click here to speak with our team and start factoring today.

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Las Vegas recently hosted the Manifest: Future of Supply Chain 2024, a spectacle of innovation that transformed the desert landscape into a melting pot of supply chain evolution. 

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With over 4,500 attendees, including 1,500 shippers, the event was not just a gathering but a bold statement on the future of logistics and supply chain management. 

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We attended for our second year and had the opportunity to meet with many freight brokers and carriers, attend sessions, and network with partners. 

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From our conversations, we took away three trends:

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1. High Customer Expectations Across the Supply Chain

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Consumer expectations are being felt from top to bottom of the supply chain. And Amazon is setting a high benchmark to follow. 

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Amazon set a new standard by delivering a package in 15 minutes via drone in College Station from click to door. "Amazon has set the bar for customers, and we have to figure out how to meet it," said Itmar Zur, CEO & Co-Founder of Veho. 

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The ripple effect? Speed is now a basic expectation, reshaping the entire supply chain.

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Farrukh Mahboob, CEO & Founder of PackageX, provided a solution: shippers must diversify their carrier mix. This approach aims to meet evolving customer demands. 

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Brokers and fleets use this as a selling point. Showcase your diverse carrier network and educate shippers on why they need various options at their fingertips. Speaking to shipper's customer needs is a sure way to make a lasting impression and provide more value to their business. 

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2. The High Cost of Bad Data

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The industry is bleeding money due to insufficient data. The loss? A staggering $1.3 trillion, according to Sarah Barnes Humphrey, founder & host of Let’s Talk Supply Chain. 

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Getting data is only half of the problem, but molding it into actionable insights is where the real problem lies. Coby Nilsson, CEO & Co-Founder of Enveyo, said this was top of mind for his brokerage, "Getting data aggregated and digestible is something we are still working on." 

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When developing a successful data strategy for your organization, you must step back and reflect on potential blind spots hindering your progress. One helpful piece of advice from Cody, who is currently addressing this issue within his own company, is to begin. By taking that first step, you can better identify areas for improvement and start making positive changes towards a more effective data strategy.

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Peter Coratola Jr., CEO and president of EASE Logistics, added the importance of technology and internal processes. "The problem is workplace adoption inside our walls. The key is to keep it simple and not let it get in the way of customer experience."

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An easy way to encourage adoption and ensure data is moving smoothly across your technology stack is to only work with providers with an open API or integrate with your customer technology stack. Solutions that mesh seamlessly are not just nice to have; they're essential for survival.

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3. Overcoming Cash Flow Challenges

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In 2024, many brokerages and fleets are looking to grow their businesses. However, they face a significant challenge due to cash flow issues. The problem arises when they must pay carriers while waiting for payments from shippers. Factoring emerges as a viable solution to overcome this challenge. It helps support growth and ensures that carriers are paid on time. 

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According to Lexi Farris, Senior Sales Manager at Denim, business owners' perception of factoring has changed recently. In the past, factoring was considered a "dirty word," but now, several brokerages and fleets explicitly ask for factoring. Business owners have realized the benefits of factoring in this market. Farris believes that a healthy cash flow is essential for growing and sustaining momentum in business. 

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The logistics industry embraces factoring as an emerging trend, and more businesses recognize its value. Leveraging factoring has proven to boost a company's ability to take on new projects by ensuring steady cash flow.

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2024 Will Be a Big Year for Supply Chain

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According to Itmar, "2024 will be the biggest year of the supply chain. The last two years have been all about cost reduction. Those that will win are marrying cost with customer experience. Winners will start to emerge as the economy starts to shift." 

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We're really excited about what this means for all of us. Providing the best customer experience is a cost worth investing in. Businesses that get this balance right are the ones we'll be talking about next year.

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We believe this is the perfect time to think about how your business can jump on this opportunity. That's where factoring comes in. It's like a superpower for your cash flow, giving you the flexibility to invest in what really matters – your customers and your growth.

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Curious about how this works? Let's chat! Request a quote today, and let's explore how we can help supercharge your business growth.

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So, here's to 2024 – a year full of potential. We can't wait to see where it takes us all. Let's make it a great one, together!