Warehouse & Logistics Encyclopedia
Your comprehensive guide to warehouse, logistics, and supply chain terminology. Explore over 100+ industry terms with detailed explanations and practical insights.
Freight Factoring
A financial service where shippers sell unpaid freight invoices to a third party for immediate cash.
Definition
Freight factoring provides liquidity to carriers and shippers by advancing cash on outstanding invoices, improving cash flow.
Overview
Freight factoring helps small and medium transport companies maintain operations without waiting for long payment cycles.
Role
A financial service where shippers sell unpaid freight invoices to a third party for immediate cash.
Focus
Freight factoring helps small and medium transport companies maintain operations without waiting for long payment cycles.
Example
A trucking company factors its monthly invoices to a finance firm to receive immediate payment instead of waiting 30–60 days from shippers.
Benefits
- Immediate cash flow
- Reduced financial risk
- Improved working capital
FAQs
Q: Can you give an example of Freight Factoring?
A: A trucking company factors its monthly invoices to a finance firm to receive immediate payment instead of waiting 30–60 days from shippers.
Q: What are the key benefits of Freight Factoring?
A: Immediate cash flow. Reduced financial risk. Improved working capital.