Regulations are driving the trucking and logistics industry to adopt cutting-edge technologies. Requirements around the recording of digital data — for instance, newer rules on Hours of Service records and electronic recording of drivers’ hours worked — have industry players adopting tools to maintain compliance.
While regulatory requirements have emerged as a top “driver” of trucking innovation and technological disruption, the complexities of the industry’s supply chain mean that dealing with paper not only adds cumbersome processes to the fold, but slows down payments for trucking firms. Research published last year from the International Factoring Association (IFA) pointed to the trucking and freight industry as the market that uses invoice factoring solutions more than any other. Invoices submitted for financing by freight factoring firms account for more than one third of all invoices processed for funding, the IFA said.
That statistic may signal the cash flow challenges that members of the trucking industry endure as they wait to see their invoices get paid. According to Jake Lopez and Joe Cook, both product managers at Trimble‘s TruckMate (its division providing automation technologies for the trucking sector), the need to accelerate accounts receivable is contributing significantly to the industry’s digitization efforts.
“As you go through processes, it’s all about how you get documents in to [prove] you completed the task, with few errors and at your service-level agreement, to be able to be paid and paid in full, and paid fast,” explained Cook in an interview with PYMNTS.
Paper documents are far from a conducive strategy to get all players in the trucking, transport and logistics space on the same page. Partnerships in the supply chain go far beyond a trucking company and its clients. Rather, the industry is a web of collaborators, including fleet managers, drivers, service providers, matchmakers connecting fleets to loads and beyond.
TruckMate’s latest product enhancement further exemplifies how many collaborators are involved in the trucking space.
Earlier this month, Trimble announced new features for its TruckMate solution that enables trucking firms to manage chassis ordering and billing. A chassis is a carriage designed to enable trucks to transport ocean containers once they arrive at a port. As Lopez explained, recent regulatory changes have shifted the responsibility of chassis management from steamship lines to chassis pool companies. It’s another example of trucking and logistics regulation affecting accounts receivable and payable operations in the sector. According to Lopez, because of that change in management, billing processes had to change from invoicing shippers to invoicing the signee.
That shift caused delays in invoicing by one or two months, he noted, resulting in a need for TruckMate to introduce an automated accounts receivable solution that could better address the needs for players that have existing subcontracts with chassis pools. It also led the company to enhance its accounts payable offering and streamline reconciliation of payment for chassis pool invoices, a solution Lopez said was designed to reduce payment inaccuracies and invoice disputes.
Chassis billing is just one example of the intricate complexities involved in invoicing and supply chain management for the trucking sector. While regulatory shifts certainly offered a catalyst for adoption of automated tools in the accounts receivable and payable spaces of the industry, Lopez and Cook noted that the need for companies to enhance visibility and streamline data sharing has also driven technology adoption.
“There are always changes in this industry — government regulations or not,” said Cook, who added that companies are embracing mobile solutions to accelerate their accounts receivable. Businesses in this space can only get paid once they have provided the proper documentation and proof of completed service, so mobile and digital data management tools are key, as are other innovations like telematics and document scanning, he noted.
A focus that has become critical for the trucking space is ensuring that all these technologies and platforms can communicate and integrate not only with each other, but with the platforms of other members in the supply chain, added Cook, particularly as this information must be shared for the right people to be paid as quickly as possible.
On-time invoice payments are “always a challenge,” Cook said. “There’s definitely a market out there. Customers are always struggling with how to automate things and reduce costs.”
In that spirit, TruckMate is exploring other innovations that can support data digitization, process automation and supply chain management to streamline business and get people paid on time. Automation that supports cost reduction — as well as visibility of key supply chain data for shippers, carriers and all of their subcontractors and partners — is essential for the industry today, Lopez noted.
Another emerging shift is the demand for better risk management and the ability for industry players to anticipate and proactively address those risks. Blockchain, Lopez said, shows high potential in all of these areas as a tool that can support data movement, data visibility and data analytics to manage risks and make processes more efficient — and get businesses paid quickly.
“It’s this general sense of tracking where your trucks are, where your assets are and where your shipments in the supply chain are,” he said. “That’s a huge trend.”