David Jencks Details IFA’s Work with Owner-Operator Independent Drivers Association

David Jencks, president of Jencks Law P.C., discusses the International Factoring Association’s latest initiative with the Owner-Operator Independent Drivers Association and how it will benefit members of both trade associations.

As part of its latest initiative to further educate potential clients about the benefits of factoring, the International Factoring Association is working with the Owner-Operator Independent Drivers Association (OOIDA), an international trade association that supports the trucking industry, to help educate its membership about transportation factoring.

As part of the partnership, Tania Daniel, executive director of the IFA, recently appeared on two episodes of Land Line Now, the podcast of Land Line Magazine, a publication of the OOIDA. In addition, David Jencks, president of Jencks Law P.C., is aiding the IFA in its education efforts with the OOIDA. Jencks took some time to speak with Commercial Factor about the new partnership and how it will benefit members of both trade associations.

For those who don’t know, what is the Owner-Operator Independent Drivers Association and why is it important for the factoring industry?

David Jencks: The OOIDA has over 150,000 members. Those members are small, entrepreneurial motor carriers by and large. Those are the exact carriers that need and want to factor. They specialize in working with those small and newer carriers, and really these carriers become factoring clients.

How did the IFA form a relationship with the OOIDA?

Jencks: Tania Daniel, the IFA's executive director, really took the initiative to reach out to OOIDA to offer ongoing educational awareness of the factoring industry and the roles that it provides for our operators. It's interesting. I think that what we found when we reached out was there was some genuine misunderstanding about factors, and I think there was a genuine interest on the part of OOIDA to learn more about factors and factoring.

What is the IFA doing with the OOIDA and what role are you playing in that?

Jencks: I'm playing a relatively small role, but I have been asked by OOIDA to participate in what is called Land Line Now. It's the SiriusXM satellite radio portion of a program that OOIDA produces. It gives daily news and information to their carriers. Then I asked to participate in Land Line Magazine, which is their trade publication dedicated to keeping professional truckers informed on current legislation, regulations, products and services, and common interests. I'm in the process of conducting interviews with OOIDA to run in those sorts of publications. Then I also participated in Zoom meetings with the OOIDA board of directors and foundation.

Will this be an ongoing effort or a one-off project?

Jencks: I think it's probably somewhere in between. I doubt that the IFA will have a consistent, constant role with all OOIDA, but I think from time to time as issues arise, I think that OOIDA will call on the IFA as a resource for learning information or current event information. So, I think there'll be a somewhat ongoing role, maybe not super regular, but at least from time to time.

Why is it important for the IFA to teach members of this organization about factoring?

Jencks: OOIDA's membership consists of a lot of small, sometimes new, and entrepreneurial motor carriers, and these businesses are oftentimes in need of cash flow financing. It's important to educate on the type of financing we provide and the needs that it meets primarily on a cash flow consistency basis.

It's also really important to educate OOIDA's carriers about the significant other resources that factors provide. Factors provide a back office for small motor carriers. We act as a billing department. We act as a collections department, as a credit department, and all of those things come along with a factor. So, I think it's really important to show carriers this is more than about being paid quickly on an invoice. It's about really receiving a quality business partner that can provide certain sophisticated business functions while they're out moving loads.

What benefits do you expect this relationship to have for the factoring industry at large?

Jencks: I hope this relationship clears up any misconceptions that somehow factors are predatory or there needs to be or should even be sort of an adversarial relationship. The interests of the small motor carrier and the factor are directly in line. We all want to see small and entrepreneurial motor carriers thrive and survive, so our interests are extremely closely aligned.

How does this initiative fit into the IFA’s overall mission of providing market education about the factoring industry?

Jencks: I think it fits perfectly. We have an opportunity for this relationship to reach 150,000 motor carriers, and there are very few organizations with whom we associate to reach more potential background companies at one time. It's really a tremendous opportunity to certainly talk about the virtues of cash flow and growth finance, but it's also really an opportunity to clear up misconceptions and really paint a broader, bigger picture about what factors can provide a small motor carrier.

What are some of the other most important aspects of factoring for owner-operators to understand?

Jencks: I don't think there's much else I really want to add. As you can tell, I'm really stressing that, sure, of course, we want carriers to know we provide a gap. On average, it takes a trucker 35 days to get paid from the time they deliver a load. With today's insurance costs and today's fuel costs, there aren't a lot of small businesses that can hold that invoice for 35 days. Certainly, it's important for the IFA to show that factors can address that issue, but it's also important to show the OOIDA members what else a factor really can and does provide in terms of business support.

What is your overall take on how the transportation factoring space has performed and progressed this year?

Jencks: Transportation factoring is heavily at the whim of transportation market conditions. So, with the historically high freight rates and freight volume at the end of 2021 and beginning of 2022, factors really rode that wave. There were many invoices. There were large invoices, and factors clients had almost more work than they can handle.

Now, with declining freight rates and slightly declining freight volume, factors are also riding that trend downward. Things have probably cooled and slowed a bit for most transportation factors, as it appears that the transportation industry is cooling off a bit with the economy.