Stripe Sees Surge in Platforms and Digital Payments Aimed at Truckers’ Productivity Problems

Two years into the great digital shift, there’s a clearer picture emerging of how age-old, analog businesses — the mainstays of the economy — are becoming ever-more streamlined and efficient.

Nowhere is that more apparent than in the trucking industry, where moving freight more quickly (a necessity amid the continuing eCommerce deluge) is aided by platforms and by better connectivity between drivers, carriers and supply chains.

Payments are at the center of it all — though it’s early innings yet.

Emily Glassberg Sands, head of information and data science at Stripe, illustrated how trucking is solving its productivity problem through digital means, taking an industry rife with speed bumps more fully into the 21st century.

“The trucking industry suffers from a number of inefficiencies across the business model” that become even more pronounced amid economic slowdowns, she noted.

Amid the pain points: Payments to unload trucks have typically occurred in person, which cuts down on the time spent on the road and results in under-utilization of fleets. Given the fact that 90% of carriers have six or fewer trucks in their roster, that’s a significant amount of time spent idling.  The routes themselves have to be optimized, where the trucks have to be sent to where demand is most urgent.

See also: Streamlined Corporate Cargo and Financial Flows Boost Trucker’s Profits

The embrace of technology by trucking firms — traditionally reliant on paper invoices and historically hostage to uncertain cash flow, with payments delayed until after the deliveries have been made — is evident, as a broad range of providers are emerging to help sync supply and demand and track freight across the last mile.

The greenfield opportunity is certainly there. Sands said that at present, the inefficiencies are so great that some studies, like this one from MIT, have estimated as much as 40% of U.S. trucking capacity is “left on the table” each and every day.

“A big piece of that is due to waiting for payments, for finding the loads to haul,” she remarked, “and fitting in as many jobs in a single day’s work as possible is critical to the industry’s productivity.”

Increasingly, the speed at which payments can be received is important to carriers and drivers (particularly amid a labor shortage), and indeed to the overall health of supply chains in general. Stripe’s own numbers bear out the sentiment that paper-based payments are going by the wayside.

A Stripe blog post that debuted on Tuesday (Oct. 11) noted that through the past two years, the number of trucking firms using Stripe has tripled to more than 6,000, having processed more than $2 billion across the platform.

Platforms using Stripe’s infrastructure — which integrate a broad range of trucking activities — have also been seeing increased payments volumes, Sands said.

Mothership, which matches freight to nearby truckers and is integrated with Stripe Connect, has enabled instant payouts to truckers, and payouts to trucking businesses via Connect have risen 10x over the past two years.

Another company, AtoB, uses Stripe Issuing to create similar efficiencies through smart commercial cards that integrate with their fleet management software. Trucking companies use the cards to manage payments for repairs, tolls and fuel, allowing them to cut down on misused expenses and fraud while saving money through fuel discounts.

Learn more: The Ripple Effects of Digital Engagement

Sands also noted that instant payment can be a strategic tool that not only attracts drivers, but keeps them on the road as they need to pay for gas, parking and all manner of daily expenses.

Along the way, she said, the $271 billion in last-mile trucking — spread out among more than 370,000 carriers — is ripe for a continued digital transformation. The platforms mentioned above, among others, will be instrumental in reducing market fragmentation and integrating payments into the mix.

They act as one-stop shops for the drivers and the shippers, enabling all parties to conduct business as efficiently as possible.

“In the current environment,” Sands said, “traditionally offline businesses have found that in order to remain resilient, they’ll have had to move online.”