A new study shows that nearly half of transportation and logistics companies plan on innovating their AP platforms within three years.
Transportation, shipping and logistics companies have proven essential to the rise of eCommerce, particularly since the pandemic began. Amid soaring demand, these businesses recognize a pressing need to upgrade their accounts payable (AP) systems to ensure that supplier and vendor payments are sent reliably and efficiently. Companies in this sector already process payables at high volumes — 71% process an average of at least 1,000 payables each month, and 72% expect their payables to rise by 11% or more over the next three years, as revealed in “Accounts Payable Automation: Transportation Companies Innovate To Drive Growth,” a PYMNTS report in collaboration with Routable.
Another challenge companies in this sector often encounter is a lack of sufficient payment options within vendor platforms. Twenty-four percent of these businesses cite this inadequacy as a problem, and 12% report it as their biggest challenge. Many transportation, shipping and logistics companies are aware of their payables systems not meeting modern demands. Forty-one percent of transportation and logistics companies consider AP platform innovations to be a priority over other organizational issues.
Per the report, 83% of transportation and logistics company CFOs expect to realize an improved relationship with vendors through AP innovation. A further 48% expect their ability to pay vendors with their preferred payment methods to improve with these innovations. Sixty-seven percent of these companies identifying insufficient payment options as a key challenge emphasize the importance of having automated AP platforms to handle increased payables volume.
Source: PYMNTS AP Automation: Transportation Companies Innovate to Drive Growth, December 2022 N = 51: Transportation, logistics and shipping companies, fielded Feb 15, 2022 – March 2, 2022
Some companies are emerging as early adopters of accounts payable automation and other AP innovations. For example, global logistics group MAN Truck & Bus announced a partnership with financial infrastructure platform Stripe in September 2022. The partnership will pilot a new product orchestrating payments between MAN’s truck fleet owners and their service partners. The product, MAN SimplePay, is intended to streamline and simplify payments for partner repair shops and services, with the goal of enabling a frictionless and unified brand experience.
In an interview with PYMNTS’ Karen Webster, Flexport CFO Kenny Wagers detailed the importance of accounts payable automation for the sector, noting that “data integrity and a really good operations team can make vendor retention easier.” The advantage for logistics firms is that they can see exactly what is happening with the physical movement of goods.
Additionally, LuckyTruck announced in December that it is launching a credit card for small trucking companies and their fleet managers. This will be the first credit card offered by the insurance and FinTech platform for small and medium-sized businesses (SMBs) in the trucking industry.
Looking forward, artificial intelligence (AI) could also soon make AP easier for logistics firms. In terms of document digitization and workflow automation, AI is emerging as an optimal tool for running algorithms and parsing large sets of data. Automated software and AI tools have already proven to be a great boon to CFOs in other sectors, helping to remove friction, inefficiencies and redundancies within their business operations.
As forward-looking companies explore the potential of AP automation, logistics and transportation firms could be on the path to more streamlined, automated and efficient payables processes.
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