tephen Patrick Day is president and CEO of Logistics Group International (LGI) in Houston. Drawing on decades of experience in the transportation industry, Stephen Day founded LGI in 2002 with the goal of becoming a top logistics provider to the oil and gas, petrochemical, manufacturing, power generation, mining, and construction industries.
A problem many logistics brokers face is balancing a client’s credit needs with their own cash flow. To solve that, many choose to use invoice factoring, a common practice in the logistics brokerage industry. Invoice factoring basically involves selling invoices to factoring companies to get cash immediately rather than wait for a payout.
There are two kinds of invoice factoring. In a recourse agreement, when a client files for bankruptcy, the logistics broker is still responsible for the money advanced by the factoring company, so it tends to have fewer associated fees than the alternative.
In a non-recourse agreement, the company is not liable for the payment if its client goes bankrupt. This gives the logistics broker added protection when dealing with riskier clients, but also carries a larger service fee.
Stephen Day 