Actual Cass #1

A truckload carrier operated a fleet of 18 trucks near Dallas, Texas. In 1998 the carrier was financing accounts receivable at a local commercial bank. Accounts receivable were averaging $200,000. Outstanding short term loan balances were $100,000. The short term commercial rate varied between 8 and 9.5%.

A large shipper pressured the company to get more trucks. The owner wanted to expand. The company needed to operate 30 trucks within 12 months. The company's balance sheet and bank lending standards would not allow the commercial bank to finance the additional freight bills. The banker suggested their factoring department would need to get involved. The bank had set up a subsidiary company to handle just such cases. The rates were represented to be real competitive at 2.5% of the gross freight bill. They could also advance up to 90% on every freight bill. The carrier agreed and signed the factoring documents. The factoring company paid off the commercial loan department and the carrier started to factor freight bills.

Using GECC financing, the carrier purchased 12 additional trucks, hired drivers and started operations. After operating just three full months, factored freight bills reached $350,000. Cash flow began drying up. As fast as freight bills were prepared they were assigned to the factoring company for a 90% advance. The carrier started to panic.

At the same time the company had purchased Truckwin™ Dispatch and Accounting software from Computerized Management Systems to improve efficiencies. CMS was affiliated with Carriernet Group Financial.

The financial consultant explained the Carriernet Group Financial "Nickel per Mile Profit Program" to work with carriers to construct accurate and complete financial statements on a per mile basis using the Truckwin Dispatch and Accounting software program. Using the ratios identified in the Nickel per Mile Program 2.2 cents per mile savings were immediately identified.  This reduced the loss by 52%.

The financial consultant also determined that the carrier was attempting to pay off late model tractors in 36 to 42 months. It was also draining working capital. Armed with accurate financial statements, the carrier approached GECC to refinance 12% notes at a lower 8.5% simple interest rate. Another $60,000 interest savings reaching a breakeven point.

Over 18 months using the "Nickel per mile profit Program" the company identified an additional 6 cents per mile in cost savings and revenue enhancement opportunities. After 18 months of continuing operations the carrier reached the 4 to 5 cent per mile pre-tax profit and a 16% return on its investment.

Actual Cass #2 | Actual Cass #3