Logistics as an industry seems to be lacking some logic. At least when it comes to payments.
Supply chains are still being roiled by the pandemic.
Stockouts were common even as late as last year before inflation truly took off, and restrictions and lockdowns still were the norm. More than a third of shoppers could not find what they wanted on shelves.
That pressure continues into the present day, as earnings commentary has shown.
Read more: Inventory Stockouts Cost Retailers up to $4.6B on Black Friday
Stockouts and delays lead to disputes, and disputes lead to unhappy consumers.
See more: Transaction Disputes Rise as Supply Chain Disruptions Persist
There’s a critical piece of the puzzle here that needs updating — and modernization and digitization. After all, goods cannot move through their supply chains and wind up on shelves (or in warehouses, ready to be shipped), without payments moving right alongside.
To that end, we’re seeing movement by some of the largest players in the logistics space to bring payments fully into the 21st century, embedded into the mid-mile and last-mile interactions.
In just a few recent examples, Danish shipping and logistics firm Maersk has chosen payments infrastructure firm Stripe to help “modernize its economic infrastructure.” The effort will synthesize and centralize several far-flung activities, from tokenization to payments processing and security authentication — and brings credit cards more fully into the mix.
Read more: Maersk Turns to Stripe to Modernize Payments
Elsewhere, in the trucking industry, as Guillermo Garcia, CEO of FinTech SmartHop, told Karen Webster, platforms can help level the playing field between the largest operators and their smaller competitors.
See more: Payments, Tech Give Small Truckers Big Fleet Advantages
More than 90% of the trucking industry is made up of independent operators and smaller firms, where the average fleet is six vehicles.
“You wind up in this unbalanced situation where you are simply too small for such a massive industry,” Garcia said. “Your top line is controlled by intermediaries.”
Cash flow is further hindered by the fact that payments within trucking, in general, are mismatched from a timing perspective. Garcia said that payments come after the loads are delivered, usually within 60-day terms, and through automated clearing house (ACH) payments. Platforms such as SmartHop, with the aid of machine learning, match supply and demand in ways that help small trucking outfits control their top lines.
Several verticals, transitioning to on-demand models, are also modernizing the logistics components of delivery and ordering. Call it the Amazon effect.
“As consumers, we all expect shipping to be reliable, fast, transparent, inexpensive — like that Amazon effect,” Carpool Logistics Founder and CEO Michael Malakhov told PYMNTS.
Read more: Fast Payments Key to Modernizing Vehicle Shipping Industry
Ordering vehicles online is becoming more commonplace.
The industry also needs to share better visibility in terms of when vehicles are going to be picked up, when they’re going to be delivered and what condition they are in at both pickup and delivery, Malakhov said. Auto transporters — the vehicles that deliver the vehicles — can gain greater operational efficiencies through bundling and payment functions that were not available in years past.
And, in a nod to how quickly eCommerce is changing, AfterShip Co-Founder and Chief Marketing Officer Andrew Chan told PYMNTS that “keeping an eye on the carriers and revising the carrier strategy from time to time is a must.”
See more: For Smaller eCommerce Companies, Optimizing Carrier Strategy Is Key
AfterShip’s carrier shipping software works with eCommerce apps and connects with multiple carriers. It provides order management, real-time shipping rates and label printing. Automating those tasks helps with transparency and visibility, which in turn saves firms money.
