A truck financial services company in metro Detroit is seeing rapid growth and expects to double its revenue this year compared to before the COVID-19 pandemic.
Livonia -based RoadEx was started in 2014 by Jagdeep Dhillon, who ran the trucking company previously with his wife. He attributed the rise of RoadEx to the increase in pandemic-related demand for shipped products, along with the company’s decisions in 2020 and 2021 to expand services for its customer base which is mostly small and medium-sized. truck carriers and operator owners.
RoadEx revenue grew from $ 60 million in 2019 to an expected $ 130 million for all of 2021.
It’s rare for companies in the trucking industry to be owned or operated by women, and only about 12% of workers in the industry will be female by 2020, according to the U.S. Bureau of Labor Statistics.
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RoadEx has approximately 30 full-time employees working out of its Livonia office, along with an additional 15 employees based overseas in India. The company was formerly known as Flat Rate Funding Group before rebranding last year as RoadEx.
The company does not own or operate large rigs. Instead, it offers financial services to trucking companies, generally those with a fleet of one to 20 trucks, although some of its customers are larger.
One of RoadEx’s core services is known as freight factoring, which involves providing funds to trucking companies in exchange for purchasing their accounts receivable.
Truck companies use factoring because they have large upfront costs such as fuel and repairs, and businesses receiving their deliveries can take 30 days, 45 days or longer to pay. An average invoice per truck delivery is approximately $ 2,300.
“They need cash flow all the time to pay their drivers and pay for fuel,” said Dhillon, who heads the company.
Factoring providers such as RoadEx buy invoices at a cost less than the amount due, approximately 95%-97%. They make money eventually as businesses pay the invoices.
RoadEx funded its factoring activity through a mix of money on its own balance sheet, including bank borrowings, according to Dhillon.
The truck industry is known for add-ons and hidden fees in contracts. Kevin Main, co-owner of Florida-based Winstar Total Logistics, a trucking company with 26 trucks that uses RoadEx for factoring, said he appreciates how transparent the company is.
“What I like about RoadEx is that when I look at my contract, as everyone should do for shipping and for fuel and for factoring, there’s nothing hidden – everything is out there for me,” he said. “It’s very easy to understand … and that’s why I stayed.”
Over the years, RoadEx has continued to add services, including truck shipping, setting up truckers ’routes and looking for freight for them to pick up and deliver.
If notin shipping, truck companies threatened to have little or nothing to haul on their journey back from a distant location. Dispatchers typically charge a portion of the fee for each load they find for the truck.
The dispatcher is different from a freight broker, who acts as a middleman between the shipper and the trucking company.
Other services offered by RoadEx include truck insurance, emergency loans and fuel savings credit cards.
“We provide five different services – usually factoring companies don’t provide all of them,” Dhillon said.
Brother in the truck
Although Dhillon or his wife never worked as a truck driver, Jagdeep Dhillon became familiar with the financial services needs of the industry from his brother, who started driving trucks after moving to Canada from India. .
Dhillon was also born in India and moved to Canada in 1994 at the age of 22. He is from the Punjab region of India, and the Punjabi community in general has deep roots in the truck industry in the US and Canada.
He and his wife started a trucking company in Canada in 2005. They later closed that company when they moved to the U.S. in 2012.
Here began a new general freight trucking company, the Romulus-based DF Carrier, which they sold in 2017 to focus on growing RoadEx today. Proceeds from the sale helped Dhillon invest more in RoadEx and its growth, he said.
Dhillon, who is called “Deep” at work, said he knows a few other female owners of financial services businesses in the truck.
Her daughter, Simran Dhillon, said people are often surprised to learn that her mother is the boss at RoadEx.
“You can hear him on the phone and (callers) will be like ‘Can we talk to anyone in charge?’ And he was like, ‘It’s no more commanding than me,’ “said his son.” And they were like, ‘How’s the owner or the manager?’ and she is like, ‘that’s me.’ “
Deep Dhillon said some of the supply chain delays now in the news were exacerbated by the shortage of trailers in addition to truck drivers.
“Right now, it’s very hard to get a trailer,” she said. “We have a lot of companies where they have drivers, they have trucks, but they don’t have trailers.”