Platforms Speed Freight Industry’s Digital Journey Toward Modernization
All industries are in the midst of a digital shift — but freight and fleet management firms are among those most urgently in need of a movement away from paper-based processes toward digital makeovers.
Speedier booking, invoicing and payments benefit supply chains, too: the movement of goods from point A to point B becomes less snarled by paper-based documents and processes — 57% of payments in the transportation industry are made using paper checks.
In recent months, PYMNTS Intelligence has reported on the rise of online platforms that bring supply and demand together. The digitization of the freight industry is a global trend as so much trade is done cross border.
As reported last week, Jaime Tabachnik, co-founder and CEO at Mexico FinTech Solvento, told Karen Webster, “Demand is growing at a much faster pace than capacity,” especially since there’s a driver shortage. Many smaller trucking firms are facing cash flow shortages, as they may have to wait weeks to get paid.
Solvento, which just raised $12.5 million, provides immediate payment solutions to the freight industry, with a focus on Mexico, and is harnessing artificial intelligence (AI) and an end-to-end accounts payable process. The Solvento Audita uses APIs to integrate into any existing software, able to read and detect documents and validate them.
The digital shift got additional affirmation this week, too, as Freightos posted results that showed additional embrace of the company’s platform, which logged double-digit bookings, revenue and transaction growth.
98% Undigitized
During the conference call with analysts, Zvi Schreiber, CEO, pointed to the “industry’s growing reliance on digital solutions to bring transparency, efficiency and resilience to global freight.”
He said that during the quarter, the company logged 339,000 transactions — defined as digital bookings placed between a buyer of freight services and a logistics service provider, a carrier or freight forwarder on the Freightos platform — a 26% increase compared to the same period last year. Unique buyers on the platform were 14% higher year over year, as gross booking values surged 35% to $217.5 million.
“Ninety-eight percent of the industry is off-line. So we have huge growth room here,” the CEO said.
Elsewhere, Class8, formerly known as FleetOps, has raised $22 million in a Series A funding round to promote its original equipment manufacturer-integrated, artificial intelligence-powered logistics solutions. The company’s platform processes over 1 billion daily data points from 227,000 trucks and uses that data to help trucking businesses optimize their fleet operations, the firm said this month.
The freight firms themselves are quickly becoming attuned to the benefits of automating back-end processes in a bid to improve cash flow.
In the PYMNTS Intelligence Money Mobility Tracker, done in collaboration with Ingo Payments, focused on trucking, we found that 55% of trucking companies see innovating accounts payable as an important goal.
The payments modernization extends to driver level, as our research shows that 2 in 5 truck drivers now use instant payments to collect their income and earnings. Given the option, 93% of truckers would use instant payments to receive their earnings.
The post Platforms Speed Freight Industry’s Digital Journey Toward Modernization appeared first on PYMNTS.com.