¡No more payments within 30 days! Liquidity solutions at your fingertips

Eduardo Narváez - CEO & Co-founder
December 8, 2021

Once the famous American film director Woody Allen said: "Fixing financial problems is easy, all you need is money."

Beyond the irony in Allen's saying, the reality is that lack of liquidity continues to be the most serious factor for trucking companies around the world.

The economic scenario is still recovering after the lockdown, and this sector has been hit hard, with billions of dollars in global losses.

Even though this 2021 has had a slight recovery, the improvement has not managed to prevent the insolvency indicators for cash flow from being kept at really worrying levels.

Delays in payments to carriers, a common practice

In such a catastrophic scenario, there is a factor that exponentially worsens the situation, and that is the constant delay in payments to carriers.

Yes, that bad practice of paying them several weeks after delivery is typical in the industry. It matters little that companies need money to pay drivers, buy fuel, and other variable costs for day-to-day operations.

The days to pay carriers in our country can vary from the next day to more than 90 days, with an average payment time of 37 days.

Most of them have to beg brokers and managers for cash payments they would shell out, but after deducting their commission. Without a doubt, it is a major problem.

Carriers are usually paid by intermediaries, which must be settled by the shippers along with the flow of paperwork such as invoices, bills of lading, purchase orders, proof of delivery, etc.

Consequently, most carriers have severe cash flow problems that force them to factor accounts receivable at considerable cost.

At the same time, due to the slowness of the collection of accounts receivable, there is an excessive amount of immobilized capital in the industry. Capital is also locked in underutilized expensive assets like semi-trailers, trailers, warehouses, etc.

Unfortunately, the above explained results in a high cost of working capital across the board, which is invariably transferred to the cost of goods.

How can delays be avoided? Is there a solution?

The transportation and logistics industry is rich in transactions that are carried out using legacy techniques and countless phone calls and emails. The same data is often entered multiple times in multiple systems.

This slow and highly chaotic process increases the likelihood of data entry errors, creating problems when settling claims and payments.

But, what would you say if we told you that there is an automated and reliable system that counteracts delays in payments to carriers and improves the liquidity of the entire sector?

At TrackChain, we align incentives between stakeholders, allowing a unified view of transactions, frictionless payments, and faster reconciliation of invoices and disputes.

The platform has a robust financial services system to automate instant payment settlement.

The system automates repetitive manual tasks such as emails, quotes, calls for payment reconciliation, tracking, and thus streamlines workflows to provide a lightweight shipping experience.

By providing a more efficient factoring program with digital payments to their bank accounts. All operators and carriers will receive payment on time.

In addition to receiving faster payments at a factoring rate much lower than the industry standard rate, carriers will be able to optimize daily time by having more accurate information on the status of their invoices and cash flows in real-time.

All of this will not only streamline and streamline operational processes, but it will also help exponentially drive business and overall business growth.

Lastly, thanks to TrackChain's immutable reputation system, shipper abuse will be left behind, as carriers can leave their shipper evaluation, just as they receive it too.

Don't hesitate and join TrackChain right now to counteract the lack of liquidity, streamline payments and boost the growth of your transport company. For your peace of mind, you can request a free demo.

Are you shipper? click here

Are you carrier? click here