The trucking industry represents a vital component of the national economy, transporting more than 72% of the nation’s freight by weight. Sustaining this extensive transportation network requires the movement of substantial funds to cover costs for fuel, taxes, maintenance, salaries and various other expenses. For example, the largest company in the sector, UPS, counts more than half a million employees on its payroll.
To keep this massive industry moving, its stakeholders need the ability to process payments swiftly and efficiently. However, existing methods are falling short. New technologies such as embedded payments and automation are crucial to ensuring the seamless flow of money and keeping the trucking industry — and, by extension, the economy — advancing toward a prosperous future.
The “Money Mobility Tracker®” investigates the impact of outdated payment processes on the trucking industry and highlights the importance of modernizing payments to accelerate transactions and ensure a swift and seamless flow of business operations.
Manual Methods Stall Trucking Payments Processing
The transportation and logistics industry is a complex network of regulations, documentation and compliance. Any mistakes or delays in these processes can bring transportation to a standstill. The continued reliance on paper payments further complicates this payment ecosystem.
Freight companies encounter various issues that can disrupt the payment process, including inaccuracies in documentation, such as duplicate payments or miscalculated charges resulting from manual methods. These legacy payment processes can impede compliance, as accounting staff must keep up with various payment terms for shippers, carriers and regulatory bodies. Moreover, manual payment processes can contribute to poor bookkeeping, a critical aspect of ensuring regulatory compliance.
Embedded Payments Key to Improving Trucking Transactions
Cash flow is critical in the trucking industry as inflation drives up costs, and a driver shortage makes finding employees more challenging than ever. Embedded finance solutions help firms automate payments from shippers and to carriers simultaneously, ensuring the seamless flow of inbound and outbound payments and improving overall cash flow.
Trucking’s Roadmap to Success Runs Through AP Innovation
Accounts payable (AP) is the driving force of the transportation industry: Nearly every cash-related function of the business is downstream from AP. Leveraging innovative payment systems gets truckers paid faster and improves the entire firm’s cash flow.
Recent PYMNTS Intelligence research found that 55% of transportation companies view AP platform innovation as an important goal. Among those firms that have already augmented their AP capability, 61% with automated AP processes report high satisfaction with their platforms. As payment volume grows, the demand for AP innovation will only intensify in the coming years.