Explore the future of frictionless freight payments with fintech innovations, including CargoAi’s game-changing CargoWALLET solution.
Traditionally regarded as a conventional industry, the world of freight and cargo has long been ripe for modernization. While discussions about modernization and transformation had been ongoing for years, substantial progress was slow until the onset of global digitalization, and the multiplier effect of the pandemic. The digitization of the industry has revolutionized the movement of freight through enhanced data sharing, transparency, and tracking mechanisms. Yet, the most significant game-changer in this landscape is the rise of financial technology or fintech.
Outside of logistics and freight, global investment in fintech has surged, reflecting the rapid technological advancements across various sectors. This surge has not only transformed customer expectations but has also paved the way for innovation. Just as we've become accustomed to disruptive technology in our daily lives, such as online shopping and digital payment methods, the freight and logistics industry is also experiencing a fintech renaissance.
Since 2009, dedicated freight fintech payment solutions have been in the market, to simplify the payment process for faster cargo releasing and therefore faster shipping across the globe. The need for carriers and shippers to promptly settle transactions became increasingly critical to outdo the competition, especially with the continued growth of the e-commerce.
In parallel, technological advancements such as blockchain has created a secure environment for international transactions, while the use of APIs allows seamless integration of payment software into existing online systems.
This shift towards online B2B payment solutions is a prime example of how fintech developments are playing a pivotal role in future-proofing the shipping and cargo industry.
One of the key pillars is speed, ensuring that payments are processed swiftly and efficiently. With the global exchange of funds amounting to trillions of dollars, the impact of delays in payments directly impacts the timely release of goods, and the potential cascading effects of such delays. Freight forwarders shudder to think about shipments held in port due to pending payments - the need for speed is undeniable.
Accessibility is another crucial aspect of achieving a frictionless payment experience. Limiting when payments can be made, as with the case of traditional banking limiting to only business hours, can be a major inconvenience. Payment cut-off times can constrain the ability to provide exceptional customer service and affect business flexibility. These limitations have a ripple effect, particularly since logistics operates across different time zones.
Transparency is the third pillar in this journey. In a perfect world, companies will receive payments that match their invoices in full and without intermediary deductions (invoices which by the way would not have gone though many rounds of corrections and which will reflect the prices displayed to clients at the start of their procurement journey). This transparency ensures a smooth process and aids in reconciling invoices – which also aids in the goal of increasing operational efficiency.
The ultimate goal is to is to embed these principles into every payment, providing a seamless and efficient experience, making 24/7 instant payments a reality.
This union of fintech with shipping and cargo has ushered in an online payment space for the rapid exchange of funds and vital remittance information between payers and vendors. Despite the huge potential, today there remains a lot of friction in the airfreight shipment handling process, especially in payments - preventing the seamless handover of goods from one party to the next.
Payments are a manual process in airfreight requiring multiple players to be physically on standby, or present verification of payment proof and reconciliation.
Currently, there is no payment framework that allows the secure transfer of funds to multiple vendors within a secure ecosystem, at a low cost.
CargoAi’s CargoWALLET is a pioneering payment ecosystem specifically tailored for logistics players to enable instant secure transactions with any vendor anywhere in the world.
Fintech is no longer the "next big thing" for the shipping and cargo industry—it is already here, ready to be embraced and integrated into the industry's core operations. CargoWALLET's advantages make it a cornerstone of the cashless logistics ecosystem, providing Freight Forwarders with an unparalleled level of financial flexibility and efficiency.
To learn more about how CargoWALLET can help transform your payment processes, download our brochure.