Transportation Payments’ Path To Electronification

You might not think about transportation payments frequently, but any time you buy a physical good, that’s the industry you have to thank for facilitating your purchase.

So how are freight payments similar to others in the payments space, and how do its complexities differentiate it from others we discuss more often? PYMNTS.com spoke with Kim Kennedy, SVP of freight payments for U.S. Bank, to learn.

“In terms of challenges, first there is that idea that you initially believe you’re going to pay this amount, but then when you get the invoice it may be different,” Kennedy said, explaining that unforeseen complications – such as wait times to unload freight – can add to expenses.

Kennedy also said that the complexities involved in a freight payments invoice add challenges to working within the industry as well.

“They’re not unlike most other payments that we facilitate between trading partners, but the difference — or maybe the challenge — is within that freight invoice, there’s a tremendous amount of information about the goods that have been moved or how much was paid for moving those goods,” she said, pointing out capacity as a particularly important aspect of freight invoices.

“There’s only so much space on a truck a plane or a carrier,” she said, “and generally they want to give that capacity to the buyer whose using it most efficiently and frankly pays them the fastest.”

One area in which freight payments are similar to many other types is in the industry’s transition to electronic payments. Kennedy said that the industry is largely split between electronic and paper payments right now – electronic has a slight lead at 53 percent – but said she believes that companies will continue to trend away from physical payments.

As for why she believes that financial institutions are best situated to work with shippers and carriers, Kennedy highlighted three core areas in which FIs have an advantage over third-party processors: regulation, data and payments flexibility.

“If you want to secure the financial components of the supply chain, you can offer the carrier an accelerated payment, so bank can help manage the cash flow as well as the actual payment and the data.

So you can rest assured that if you choose a financial institution, the movement of your info and your money will be very secure.”

To hear more from Kennedy, including why she says that shippers should apply the same care to their financial supply chain as their physical one, listen to the full podcast below.

*If you have trouble with the audio player above, click here.

Kimberle R. Kennedy, Senior Vice President
U.S. Bank Corporate Payment Systems — Freight Payments

Kim Kennedy joined U.S. Bank in January of 2007 as Senior Vice President Healthcare Payments. Today she holds the position of Program Manager for U.S. Bank Freight Payments. In this role, Kim is responsible for developing and executing market strategy and new products and services development and delivery for the freight payment business within U.S. Bank Corporate Payment Systems.

Kim has 30 years of management experience in the financial services industry including retail banking, wholesale banking and personal lines insurance. Prior to U.S. Bank, Kim held leadership positions at ACE-INA, Visa U.S.A. and Mellon Bank, N.A. Her background includes management positions in program and product development, business development and client relationship management.

Kim received a Bachelor’s degree in Marketing from Robert Morris University in Pittsburgh, PA and is a graduate of the Katz Graduate School of Business at the University of Pittsburgh.