Your customer pays in 60 days. Your carriers want payment in 15.
Who finances the missing 45 days?
You do.
And when interest rates rise, that gap can get more expensive. This is where Fed policy becomes a logistics problem. 🧵
A logistics company can be profitable on paper and still be short on cash.
Revenue is booked. The customer hasn’t paid. Payroll, rent, and carrier invoices are due.
If a credit line covers the gap, you’re paying interest while waiting to collect your margin.
Put numbers on it:
A $1 million average credit-line balance costs an extra $20,000 a year if its rate rises from 8% to 10%.
Same customers.
Same shipment volume.
Same operating performance.
An additional $20,000 in financing costs.
Your customers can feel the squeeze, too.
More expensive inventory financing can push brands to reduce stock or delay orders. Slower sales can stretch their cash further.
That pressure can reach your business through fewer shipments or requests for longer payment terms.
This is why payment terms belong in the pricing conversation.
Two customers generating the same revenue can have very different economics if one pays in 15 days and the other pays in 75.
The invoice amount is the same. The cost of serving them may not be.
Before chasing more volume, ask:
How much cash will we have to advance to support it, and for how long?
Growth can increase profit while draining cash.
For 3PLs and ecommerce operators: what’s squeezing you hardest right now, financing costs, slower payments, or weaker volume?