Shippers and Carriers Find Common Ground With BNPL Solution

Trax, BNPL, shipping, transportation

Buy now, pay later (BNPL) works in the transportation industry, too.

In the same way that customers love paying for purchases over time with installment plans and retailers enjoy booking bigger tickets and more sales, shippers love paying for carrier capacity in alignment with their internal days payable outstanding (DPO) goals and carriers enjoy getting paid quicker. 

That’s the idea behind a joint solution announced Feb. 18 by transportation spend management solutions provider Trax Technologies and FinTech company Raistone Capital. This solution is designed to create extended working capital for shippers — the companies that are trying to distribute something — and improved cash flow for carriers, or the companies that carry the products. 

“It is buy now, pay later,” Josh Bouk, president and chief revenue officer at Trax Technologies, told PYMNTS. He explained that it enables shippers to buy the carrier capacity now, but pay for it 60, 90 or 120 days later. 

“What this program does is, by using a buy now, pay later strategy that aligns with those internal DPO goals, all it does is it creates a service that says, ‘Yep, you can buy it now, Trax will pay for it, with our partnership with Raistone, and then you can pay us back in alignment with your DPO objectives,’” Bouk said. 

Meeting the Needs of Both Shippers and Carriers 

In creating this joint solution, Raistone brings the licensing to be able to provide these types of capital availability solutions, while Trax brings the customer relationships and the control of the invoicing process that enables the company to offer this to shippers. 

“It was one of those really big ‘aha’ moments,” Bouk said. “‘Wait a minute, if you can do that, and I can do this, one plus one equals 500.’” 

For shippers, this program provides access to carrier capacity, enabling them to avoid the risk of delays and shorten the timeline between producing a product and getting it into the customer’s hands, while also not having to use their own capital to get it.

For carriers, the program gets them paid faster and allows them to run their business and get the cash flow they need. 

“Each of those two parties is constantly pulling in opposite directions,” Bouk said. “The shipper is trying to get longer payment terms, trying to extend that working capital, while the carrier is trying to get paid faster — they’ve got oil changes to buy and they’re got tires to buy.” 

Coping With Continuing Supply Chain Challenges 

With the current supply chain challenges, carriers have had all the leverage and shippers have been having a hard time. With the BNPL program, however, shippers can see that the carriers get paid when they want — without impacting their own working capital goals and without incurring additional debt. 

The new solution is available around the world for transportation including air, ocean, rail and trucking, for shippers that are mid-size and larger. The current transportation problems are also global, Bouk said. 

“This is going to be a real issue for the next, minimum, three years,” Bouk said. “Capacity constraints are going to continue, the supply chain challenges that we are all experiencing — it’s the new life for a while because of the timeline it takes to really build out more capacity.”