Third Party Logistics
Companies typically engage third party logistics to outsource elements of their supply chain to another company. The contracted company then manages various logistics functions such as warehousing, order fulfillment, customs, distribution, inbound/outbound freight and more. Since third party logistics is an outsourced service, it can produce a trickle-down effect on successful supply chain payment.
It should be noted that third party logistics is a highly competitive industry. Providers often lose carriers to other companies and reliable carriers are in short supply. Since third party logistics industry margins are traditionally extremely tight, both providers and carriers are constantly in need of cash solutions. In order to attract the best carriers and generate goodwill, an early payment option is often offered. This may not always be possible or efficient for small and medium-sized providers, which is where Liquid Capital can help with an effective supply chain payment program.
Liquid Capital of Colorado’s supply chain payment solution reduces third party logistics overhead through outsourcing and provides you with the financial resources to compete. Unlike other programs, it increases carrier convenience by directly depositing funds into a designated bank account for free.
How it works as a supply chain payment solution
- Carrier delivers the load and sends confirmation to Liquid Capital of Colorado
- Your third party logistics provider collects a customer invoice (AR) and remits a carrier invoice (AP), sending Liquid Capital originals for both documents
- Confirmation is received and a supply chain payment discount is subtracted from carrier invoice (AP)
- A factoring fee is charged to the third party logistics provider and discounted from customer invoice (AR)
- Net factoring cost to the provider can range from a manageable cost to a profit, depending on how the Quick Pay revenue is shared.
The Liquid Capital of Colorado supply chain payment advantage:
- Increases sales because advanced supply chain payments mean you can provide more loads
- Reduces overhead through outsourced AR, AP and collections
- Profit center can subsidize or reverse factoring costs by sharing costs with carriers
With the flexibility, fair rates, and great customer service, we found Liquid Capital to be the right choice for our company. By putting monies at our disposal, we can compete with some of the larger companies.”