With online commerce driven to new heights last year, the supply chain and logistics sector was stretched to its maximum.
For independent truckers, the onset of the global pandemic was filled with uncertainty. With an initial slowdown in the freight market, some trucking companies were forced to shutter. Yet as online shopping ramped up, a rebound in the trucking space created new opportunities for the drivers who decided to go solo.
As more drivers turn to an independent business model in an effort to take control of their careers and their own schedules, those professionals are facing new challenges to keep pace with the demand of shipping and delivery. But through specialized FinTech, says Arodiogbu, independent truckers not only have an opportunity to optimize their operations, but accelerate cash flow, too.
An Evolving Landscape
The trucking industry is quickly evolving, thanks to the emergence of industry-specific technologies. Only about five years ago, explained Arodiogbu, the breadth of digitization only went so far as to offer online brokerage boards to help truckers be matched with loads.
“Truck drivers would go to these online boards, find loads, see the number of the broker and then call them to negotiate,” he said.
Then, several years ago, digital-first brokerage solutions like Uber Freight and Convoy came onto the scene to help streamline the process of truckers getting matched with loads and completing jobs. While this evolution has removed some of the friction of manual processes from independent truckers’ operations, there was still plenty of pain involved in the coordination of optimizing schedules.
As Arodiogbu noted, truckers continue to manually log on to these platforms one by one to book loads and try to orchestrate a schedule that best fits their needs. Yet this would often occur on a trip-by-trip basis. For example, if a trucker wanted to book loads out of Los Angeles to Orlando, that was fairly easily to do. However, if the Orlando market didn’t have a high volume of outgoing loads, that trucker would be stuck.
CloudTrucks aims to optimize this scheduling and load-matching process by allowing drivers to optimize several days’ worth of jobs to not only coordinate where they travel, but ensure they are maximizing revenue by moving loads from various brokers as they move from one location to the next.
Accelerating Cash Flow
One of the biggest pain points for independent truckers goes beyond simply coordinating schedules. Unlike other digital-first logistics platforms that support independent workers, such as Uber and Doordash, which can often facilitate same-day payments to drivers, the freight and trucking space still operates on legacy payment processes in which drivers won’t get paid until 30 to 45 days after delivery.
Arodiogbu pointed to the high volume of paperwork and data that must exchange hands between parties before any payment is released as a key roadblock to faster payments for independent truckers. CloudTrucks also tackles this challenge by collecting key documents like bills of lading and proof of delivery, then issuing a direct bank deposit to the driver via ACH.
However, he said, drivers were seeking a way to access their funds even more quickly than traditional ACH could facilitate. This need is what led the company to launch CT Cash last month, a solution that wields Visa’s card rails to more quickly push funds to driver’s card accounts. After documents are processed and verified, the platform can load funds to those cards within several hours.
What’s critical for today’s independent drivers is to not only facilitate faster access to payments, but to integrate a cash flow management solution so professionals can actually manage both their capital inflows and outflows. According to Arodiogbu, that means providing visibility into each transaction and the job to which it is tied, as well as empowering truck drivers to make their own decisions about what they do with the cash loaded onto their cards: either use it for everyday expenses, or transfer it to their own bank accounts, and transparency into their current cash positions.
“It’s not sufficient to just built a payment product or an app that lets drivers find loads,” he said. “It’s about getting them visibility and a better understanding of cash inflows and outflows.”
While the trucking and logistics space continues to evolve, Arodiogbu said there continues to be a gap in FinTech solutions designed specifically for the independent driver. While the pandemic has ramped up supply chains and widened job opportunities for these professionals, more innovation is needed to optimize operations and accelerate cash flow.
For CloudTrucks, that means exploring technologies to automate and accelerate the process of verifying the documents required to release payment. For the industry overall, it means pushing for more innovation to relieve some of the biggest pain points that continue to plague the sector.
“Cash flow problems existed prior to the pandemic, and continue to exist to day,” said Arodiogbu. “Uness this problem is really solved, they’ll continue to exist going into the future. We see independent drivers are getting left behind from what’s happening in the FinTech space.”
Selected by Fintech Tube