Our solution to delayed payments in the transport sector
“Companies are experiencing average payment delays of 51.5 days” claims a study performed by Coface, a global trade credit insurance company, that conducted a survey on payment experiences of carriers and transport companies. It is a fact that we see more and more discrepancy on payments, something that has a direct impact on the economy of each business, no matter the size of the company. Delayed payments are a challenge to each business in the transport sector, making this issue a prominent one to work on in the future.
Are delayed freight payments an issue across all European markets?
The above-mentioned study was focused on the Polish transport market, where the number of bankruptcies in 2019 increased from 56 to 73, recording a 30% increase. Alas, the situation across Europe generally is not that different, as Germany, France and Italy were also mentioned as countries with high risk considering the transportation of goods. Either because of political instability, insufficient economic liquidity, debts or any other type of crisis, the transport sector will always be among the first ones to face constant insecurity considering freight payments.
Payment recovery is a tremendous challenge for transport businesses
Therefore, one of the main problems a professional truck driver faces nowadays is payment recovery. Even though most transport companies already use various tools for checking the credibility of new companies, the real verification of foreign companies remains a big challenge to overcome. Also, the further the borders of their own country, the more difficult it gets to recover outstanding or delayed payments for the service provided.
It may happen that a payment gets delayed, which is very unpleasant for any type of business out there. In some cases these invoices simply remain an unpaid debt that keeps accumulating. Sadly, this is not a rare phenomenon but a scourge that is getting bigger and bigger. Inevitably, it has some serious consequences on the economy of local freight businesses and to a larger extent the economy of the industry itself.
Most companies in the transport industry operate on digital freight exchanges and enter many commercial transactions every day, picking loads from different companies. However, in many cases they avoid certain routes for fear of not being paid for the transport delivered. Additionally, once companies accepted the order of load and after having experienced late payment, they often patiently wait for payment and stick to the principle that good contact with the debtor is the best way to maintain business cooperation. The truth, however, is that the more time passes after the invoice is due, the less likely it is to get your money back, raising the number of delayed payments in the transport sector.
How to avoid late payments in the transport industry?
The question arising from these thoughts is how to decide which company to trust, in order to avoid all the mess. Unfortunately, there is no standard answer, as each business is distinct. If it is the first time you do business with an unknown company, the only thing you can do is research.
Research your business partner
- Use Google to learn more about the company’s history and development
- Try to find testimonials online
- Ask your colleagues if they have worked with them in the past
How Teleroute can help transport businesses to avoid late payments
Foreseeing the above-mentioned issue, at the Teleroute Freight Exchange, we believe in the necessity of providing carriers with an extra security when it comes to putting their whole trust in one provider, that is most often unknown to them. We want to reassure professional truckers that every single time they close a deal through our platform, they will get paid. This is our motto and the philosophy behind Teleroute Payment Guarantee. To meet the demands in the transport and logistics sector, we identified the challenge and created an innovation that will further support our vision of providing a 100% safe freight exchange platform.
How does the Teleroute Payment Guarantee service work?
Teleroute has partnered with Coface, global leader in credit insurance, to offer a solution that allows carriers to ensure payment for any transport executed using our Freight Exchange. In short, Payment Guarantee protects Teleroute users from unpaid invoices. By activating the Payment Guarantee service, professional transporters will receive 90% of their transport invoice, in case their customer doesn’t pay for the transport being delivered.
On top of that, there are quite some more benefits. Carriers can directly register online for Payment Guarantee, via the Freight Exchange platform, and receive immediate feedback regarding cost and coverage, which is possible because all companies offering freight in Teleroute are given a credit rating by Coface. The success of this service, which is increasingly used among the customers of the Teleroute Freight Exchange, thus lies in the immediacy of the contract and in the effectiveness when claiming the invoices.
An additional benefit of the Payment Guarantee service, is the freedom to choose which invoice carriers want to secure. Carriers are not obliged to guarantee all transports performed for a specific customer, but can choose on a case-by-case basis which transport they want to guarantee. Above that, it is not a prerequisite for Payment Guarantee that the load is being posted in Teleroute. As long as both parties are a Teleroute customer, the Payment Guarantee service can be used to secure payment. All these settings allow carriers to price their services more competitively, to save up money and to expand their business network quickly and more strategically.
You can learn more about Payment Guarantee by visiting our website. We are proud to announce that we succeeded to introduce a ground-breaking option, that opens new horizons for professional truck drivers and significantly reduces the risk of trading transactions. We make delayed payments in the transport sector a bitter memory that now belongs to the past.