Beyond On-time delivery: How automated payments enhance carrier loyalty

 Happy carriers equal happy shippers. Freight payment automation builds trust and loyalty, keeping carriers on your side.

A loyal and harmonious relationship with your carriers is an absolute requirement for you as a shipper. You need them to reach your customers, and therefore the responsibility of making timely payments, scheduling, offering them consistent loads, and having transparent communication falls on you.  

However, if you are still taking care of invoices and payments manually, you need an upgrade. A freight payment automation (FPA) solution will streamline your payment processing, ensuring all your carriers are paid on time. These solutions offer you a faster, more reliable process of dealing with invoices while also avoiding delays and inconsistencies.  

In this article, we will discuss why carriers might not want to work with you. We will also present to you all the arguments in favor of switching to an automated system for freight payment to become the top choice of your carriers.  

Why do carriers drop shippers?  

The relationship between carriers and shippers is interdependent. So if a carrier drops a shipper, there may have been inconsistency in payments. It can be frustrating for a carrier to wait weeks beyond the agreed-upon date to get paid. They also need the funds to keep their operations running smoothly. Frequent invoice discrepancies are another big issue. If a carrier constantly has to argue over incorrect payments, it quickly becomes a deal breaker, leading them to seek out more reliable partners. 

Another thing is a lack of payment transparency. The uncertainty in contract terms or the unnecessarily complicated payment process can lead to cash flow issues for the carrier. If these issues persist, carriers might decide it’s just not worth the hassle and look for shippers with smoother, more reliable payment practices. 

Faster payments, Happier carriers: The automation advantage for shippers

Eric Johnson of the Journal of Commerce explains that, based on a common industry estimate where freight costs account for 5 to 10 percent of a shipper's total revenue, a company with $1 billion in revenue could spend between $50 million and $100 million on freight annually. If the average freight invoice is approximately $2,500, this would result in about 40,000 invoices processed over a year. 

Freight payment automation is one tool that can help shippers tackle vast volumes of invoices, retain their carriers, and enjoy their trust and loyalty. Like most modern tools, FPA leverages new technologies like AI, ML, blockchain, and data analytics that help systematize payment processes. It ensures payments are fast, accurate, and transparent, making everything smoother for everyone involved.

• Keep the cash flowing

You can pay your carriers on time if you have the available funds. Utilizing the power of machine learning in freight payment automation, you can predict payment cycles, especially peak seasons, and keep the cash ready. With stable finances, you can offer better terms, making carriers more inclined to work with you regularly, knowing that they will be paid no matter what. 

• On-time payments 

Now that you have the cash handling, the next step is to navigate the complexities of the entire process of payment, from collecting the invoices to auditing and validating them, and much more. With an AI-powered FPA system, you can automatically scan, verify, and process invoices as soon as they are received. 

AI uses algorithms to match invoices with corresponding contracts, load details, and delivery confirmations. Once invoices are verified, the system routes them for automatic approval based on predefined rules.  

With automation, you no longer need to worry about manual data entry, which reduces errors and speeds up processing time. It ensures that all payment terms are met before processing, so you can avoid delays caused by discrepancies. Plus, it removes bottlenecks in the approval process, allowing you to execute payments more quickly and efficiently. 

• Keep them in the loop 

The carriers that work with you are your partners. Giving your carriers access to track the payment status in real-time through a blockchain-enabled, secured platform helps build trust. Blockchain technology provides a transparent, immutable record of all transactions, and carriers can see exactly when and how they’ll be paid. 

Increased confidence in your payment processes makes carriers more likely to choose your business over others and have a long-lasting, mutually beneficial partnership. 

• Data-driven payment term customization

When a carrier has been consistently working with you without any issues, it would be a good idea to offer them an incentive like a fuel surcharge (allows the carrier to pass on the cost of fuel to the shipper), or a higher percentage of the advance payment. You gain valuable insights into payment trends and carrier preferences through the FPA’s advanced analytics. 

You can use this data to tailor your services and meet carrier needs more effectively. As a result, you gain their loyalty, making them more likely to continue working with your business. 

• Improved relationship 

Carriers will trust you if they believe you to be professional and reliable. With freight payment automation, you already take the hassle out of the payment, which leaves your team with time to promptly address other concerns the carriers might have. When they get paid without any invoice dispute, they are more likely to stick around and prioritize your loads. This trust, built through reliable automation, helps keep your carriers loyal for the long haul. 

Pando.ai: The trusted choice for freight payment automation 

Pando’s AI-powered freight payment automation is here to make your life easier, solving common issues and introducing efficient solutions tailored to your business. We’ve upgraded your logistics approach with OCR-based invoice ingestion, which scans and digitalizes your invoices, pulling out the information you need. 

Our AI and ML algorithms are designed to catch errors and inconsistencies, which not only prevent disputes but also enhance overall accuracy. Vivek Singh of Nivea underscores the significant improvements they've seen with Pando's freight management, noting that they can now precisely estimate freight expenses, streamline invoice processing, and efficiently handle disputes and additional costs. 

Plus, with ERP-ready integrations and automated carrier invoicing, we ensure smooth data flow and operational efficiency across 196 countries. 

With Pando, managing your freight invoices becomes effortless, freeing you up to focus on growing your business. Our system also offers advanced analytics to give you clear insights into your freight spending, helping you make smarter financial decisions. It even tracks and reports emissions, supporting your sustainability goals.