It is common for contractors in other businesses to demand partial payment upon agreeing to do the work, which would usually cover the outright expenses the contractor would have to shell out of his own pocket, with the balance being paid after the job is completed.
In some instances, yes - that is true - but certainly not always. Whether it is the case or not may well depend the amounts involved, whether the contractor has adequate lines of credit with his suppliers, and to what degree he is in good shape as far as his own operating capital goes.
..... it's probably not a great sign if your business is not backed up well enough to be able to complete a load without being paid for part of the load in advance
Not only is it
"not a great sign" .... but just think for a moment about
what it communicates to your customer or your partner (ie. your carrier)
What sort of a position does it put you in with respect to them ?
By placing yourself in the position where you are
utterly dependent on such advances, you are giving them alot of leverage over you ..... the word
desperation comes to mind .... particularly if you are having to ask to have a card loaded when dispatched on a load.
The reality is however, that a contractor can be out of pocket thousands of dollars for fuel, before being paid for those loads that required all that fuel.
Yup - that's true - at least in the case of straight trucks -
which isn't at all what we are talking about here.
A thousand bucks will buy a lot of miles (fuel) in a cargo van.
The reality is also that for one reason or another, through no specific fault of their own, many may have depleted their backup and/or operating resources.
Dunno ... maybe there's something I'm missing here, but it seems to me that one is
always responsible for the condition that one finds oneself in .....
The above is a
very cold, harsh, and .... quite brutal ... reality .... but based on my experience (some of it not particularly pleasant), that just seems to me to be way things
actually are .....
I've never heard of a roofing contractor (or any other type of contractor) being told by the business they're contracting to do a roof job for, that sure, they can have a partial 'advance' on the monies payable, however 15% will be deducted.
Likely true, but then it is also true that many industries offer discount terms for payments rendered in a timely fashion. The typical rate for the industry I'm most familiar with (the automotive aftermarket) was 2% (this was probably 15 years ago)
Most roofers, or any other contractors, wouldn't be willing to do that job under those circumstances,
Interesting that you would bring up roofers .... that is a subject that I'm not entirely unfamiliar with, since I'm nearing the time (next summer) where I will have to have a roof replaced on a commercial building that I own.
The cost to replace that roof, based on quotes I have received over the last several years, is ....
significant ..... in the mid five figures.
The terms from the roofer that will ultimately do the job are:
Net 30 Days, from the time the job is completed and invoiced. No advance payment required. His material costs will be s
ignificant (I know - I priced them at a local supplier)
I'm also currently faced with having the boiler replaced at the same facility - in the mid four figures - and the terms from the heating contractors that I have contacted for quotes vary considerably:
One firm was 1/3 down prior to the start of any work, and then balance due upon completion and a 2% discount off the total invoice if paid within 10 days of the presentation of the invoice. This was a smaller company - likely not over-capitalized - and perhaps had marginal credit from his suppliers (hence the need for 1/3 down)
Another firm was a straight Net 30 Days, no advance payment required. This was a much larger company - one that was probably much better capitalized, and probably had adequate credit from their suppliers.
The third company I contacted, having a doofus for a sales rep, didn't bother to include the terms on his written quote .... so who knows.
So it's a mixed bag ..... dependent on a lot of things.
or at the very least, they'd boost their charges to their customer by 15% to cover it.
Unless one is running under forced dispatch, one is always free to attempt to negotiate a higher rate for any load - and if you don't get a rate you like, then take a pass.
Yet drivers are not at liberty to do any such thing.
Really - are you operating under forced dispatched then ?
Or are you free to attempt to negotiate pay on loads (to whatever extent) and are you able to accept or decline loads based on whether the pay seems acceptable to you ?
I realize that it costs the carriers money to provide the money in advance to their drivers, however, why shouldn't it cost them?
Yeah .... well ......
because they aren't the ones asking to borrow someone else's money ....... 
Why are the drivers who are actually paying for the fuel, expected to be the ones to also pay the advance charges?
Because the drivers or O/O's are the ones
providing a service (to the carrier)
The service isn't actually performed or rendered
until the load is delivered to where it is supposed to go.
And if you want to be in this business (or most any other one really), then you need to be adequately capitalized,
in order to perform the service that is your business.
Obviously there are certain exceptions, or special circumstances, where that is not always possible due the amount of time or money involved - but as a general matter and practice, one should have sufficient capital to operate.
Just curious, how many here who are operating under their own authority, (with their own non-carrier customers) actually require
payment in advance from said customers ?
What do you think it would communicate to a customer if you placed yourself in the position where when the customer called in to book the load you had to say:
"I'll absolutely be happy to run that load for you ..... but I'll need to pick up a check for 50% of the invoice (or whatever) when you load me ..... cause I gotta buy fuel ..... and I'm a little short today ...."
Not exactly great PR .....
I'm sure that when the carriers bill their shippers, like any other business, they are taking into consideration the period of time between billing and actually receiving payment.
I would rather imagine that they do - in fact, I would guess that they watch it like a hawk ........ but I'm not sure what your point is ?
