Every year, more and more research shows that consumers expect faster, cheaper shipping. Among the most recent was the National Retail Federation’s Consumer View quarterly survey. As reported in RetailDive, the survey found:
- On purchases of less than $50, more than two-thirds of online shoppers expect free shipping
- About 38 percent of online shoppers now expect free two-day shipping
- About 24 percent expect free same-day shipping
- Nearly half of shoppers (47 percent) said they would not go through with a transaction if free shipping were not included
Customers are getting more demanding. Carriers and shippers have to work together to deliver shipments to end consumers faster than ever. That means strategic adjustments throughout the supply chain from the location of warehouses and fulfillment centers near cities to the use of new last-mile delivery technologies.
But the push to move goods faster through supply chains is forcing another change, too: the money has to keep up. Not only do online retailers have to absorb expedited shipping costs, they have to transfer that money to carriers, and carriers have to transfer it to their contractors faster than ever.
New E-Commerce Payment Methods can Increase Supply Chain Efficiency
New technologies continually force the shipping industry to evolve or allow it to evolve, if they lift barriers to faster, more efficient shipping. E-commerce payment methods fall into the latter category. These new systems are being implemented to allow companies to keep up with customer demand for same-day delivery or two-day shipping.
Some tech companies are beginning to develop tools that allow shippers to pay freight haulers more easily. These efforts, The Wall Street Journal reported in March, are “aimed at streamlining how companies handle invoices while catching billing and other errors more quickly.”
Currently, at most steps along a supply chain each company sends an invoice to the next. The online store sends an order to the manufacturer and the manufacturer responds with an invoice. The retailer hires FedEx to move those items to their fulfillment centers and FedEx sends an invoice and so on.
There’s an extent to which invoices have been digitized. Major carriers have digital platforms where retailers review their orders, check their status and make payments. But some companies along supply chains may still invoice using PDFs and make payments via monthly checks.
And at most points along the supply chain, invoice errors still cause long delays. These errors tend to become more widespread as all these companies work faster to meet customer demand for expedited shipping.
“As you increase the speed of commerce, you need systems in place to be able to accommodate that,” Haven Inc. founder Matt Tillman told The Wall Street Journal. Haven’s software can identify differences between freight quotes and invoices. Its users, mostly commodity firms, “can’t afford to hire a bunch more accountants and sit them in a room to do this.”
If everyone struggles to keep up with invoicing in this accelerating shipping environment one might ask, shouldn’t every party be willing to forgive some mistakes?
Experts say no. Not when certain aspects of the shipping industry are so supply-constrained. For instance, There is a shortage of truck drivers across the U.S. and increasing demand for ground shipping. Trucking companies simply can’t work with every company who needs goods shipped, and they’re far more likely to drop those who don’t pay in a timely and accurate way.
Better Invoicing Will be a Long, Industry-Wide Transformation
Billing and other invoice errors slow down delivery service because they slow down back-end payment processing. Processing invoices and payments on time is essential if carriers and retailers are to satisfy consumer demand for greater volume and speed.
First, companies need to ensure that invoices are accurate. Second, when those invoices contain errors, companies must undertake an arduous claims process to get them resolved. As Haven’s Matt Tillman explained, very few companies have the resources to do the first much less the second.
Software can help with these challenges. Reveel’s invoice auditing is one such service. We offer a 45-point inspection combing through invoices to find savings when company leaders don’t have the resources to do so. Then, we work directly with carriers to negotiate and secure credits on our clients’ behalf.
On a longer horizon, big data is playing a more significant role in supply chain management. Big data can link all aspects of a supply chain from inventory on hand to warehouses to customers. This information can remind companies when it’s time to order more replacement inventory, show which vendors missed shipments, and highlight the manufacturers whose products got the best customer reviews. Because all this data can be synthesized, we expect invoices to eventually be synthesized too.
Invoicing and payment processing can be a slow process, and it requires accuracy and careful review. And as the speed of commerce gets increases, money will need to move faster too. Sophisticated software and big data can facilitate better and faster transactions if companies are prepared to adopt them.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.