Cash Flow ???

[Activet]

I'm at my wits end ! We had some on time delivery issues with several carriers on loads from Hamilton to Regina - avg. 3/mo. and this with one of our largest accounts. Our customer insisted we use a carrier (Salmon Arm, BC.), that their customer had some direct experience with, and wanted us to use to end the delivery issues. Forgive me for being cynical but now I can guess why they wanted that carrier in particular.

We gave them 20 loads totaling $65K, and have yet to receive their invoices and PODs before 45 days past delivery, despite many of our pleadings. There was always some lame excuse, usually blaming the drivers for not turning paperwork in, and their promise to do better. It's not nice receiving invoices that are already 15 past due when we get them! Not only did it delay us getting our margin, but our customer as well. We paid the carrier within thirty days of receipt of invoice and had to wait an additional 45 days past that before we recovered the funds. We obviously had to put a stop to that and re dated their invoices to the day of receipt in accordance with a verbal agreement with their acct.s Rec. My guess - the consignee had direct experience with the carrier's questionable admin capabilities and it was like getting granted an extra 60 days credit before they paid our customer. To top it all off, the carrier sends us statements showing over 91 days (from date of p/u), and this gets reported to Equifax, & D&B !!! We pay carriers in thirty or less and now this ! What do you suppose that makes us look like ???
Our customer got pissed with waiting to get their money, and now we use another carrier and the cash flow will get back on track!

Now for your opinions, please.
We still owe the carrier $6,800. and I am considering a charge back at 2%/mo. on our margin for delay for the 20 loads we gave them.
What do you think?

Howard

 

[loaders]

I can appreciate and sympathize with your problem of receiving invoices dated from either the shipment pick-up date or delivery date. I have never understood why an invoice should already be 15+ days old when I open it.
Would it have been possible to get a copy of the signed Bill of Lading from the consignee, which you could have used for billing your customer? We have used that procedure when the delivering carrier was slow in providing his paperwork. As far as charging interest to the carrier, I don't think that is a good idea. There doesn't appear to be a service failure here, only an accounting failure. It is certainly frustrating, but take pride in the fact that you pay your carriers in thirty days from receipt of invoice - from what I have read on this site, there seems to be lots of brokers that don't.

 

[MarkD]

At $3250 for a full load to Regina theres no money left over for stamps.

 

[Activet]

Loaders - Consignee wouldn't send copy of POD as this would negate their extra 45 - 60 day credit window gained by using this carrier.

MarkD - We issued them as LTL loads, however they consolidated them as B-Train Loads with room to spare. I believe $6,500 is reasonable.

Howard

 

[loaders]

It would appear that the only party getting any advantage out of this, is the consignee. The carrier, back-dating his invoices to the p/u date, must have a real terrible looking receivables ledger. With todays tight credit, surely his banker must be nervous! Does your customer share your awareness of this "extended credit" situation? By all accounts, there is nothing that you did wrong here. Still, I do not think that you should penalize the carrier for employing poor accounting practises, they will ultimately pay a price for it on their own.

 

[lowmiler88]

It seems to me that your customer is the one you should be concerned about, if they do that for extra terms then they will have no problems screw you in the end guarranteed.

 

[Activet]

Cash Flow ??

Thank you all for your comments and opinions.

The only one who benefited from this was the consignee (our customer's customer). I don't believe there was any collusion between the consignee and the carrier they preferred we use. Just the consignee's awareness of the carrier's cavalier admin practices, and the effect it would have on their effective credit terms, as they insisted on receipt of the original PODs before paying our customer's invoices. Our customer had had enough and again allowed us to use the carrier's of our choice, and now things are getting back to normal.

The fact that there was an administrative failure as opposed an operational one is still a failure, that results in their not being able to do any more business with us. Notwithstanding the their admin. practices, operationally, the carrier provided great service. It just boggles my mind when I think of what the carriers receivables look like.

I am going to follow my own advice in another posting here, and not back charge the carrier, just pay the outstanding, and move on.

Again, thanks for your feedback.

Howard