Customers are starting to embrace digital forwarders that provide supply chain finance services as well as digitized freight forwarding.
In June, UK-based digital freight forwarder Beacon announced it had raised more than £10 million in its Series A fundraising round.
The company believes its ability to offer supply chain finance alongside freight forwarding will allow customers to better control and manage their cash flow – suppliers often demand payment before goods are shipped and, with months-long shipment times, importers need flexible finance to meet their working capital needs.
“By working with customers to solve their working capital constraint problems, we can provide a simpler and more complete solution that is also more interesting economically,” says CEO Fraser Robinson.
“Providing both shipping and financing services enables us to pool our profits to ensure prices on the freight side are competitive.”
Lack of working capital and liquidity is one of the biggest growth challenges for businesses, says Richard Fattal, co-founder of Zencargo. “Freight forwarders are well placed to service this need given their proximity to data on supplier yield, order fulfilment, customs and inventory,” he says.
“By leveraging in-depth insights into the customer’s freight movements and product performance, forwarders can quickly and accurately price risk and open up the market to more businesses.”
Digital freight forwarders bring together insights from the extended supply chain, tracking produce all the way from order through supplier to transport and delivery, creating a connected system of supply and demand information.
This enables businesses to improve efficiency by tracking metrics such as lead time, supplier performance and load fill, making data-backed choices about supplier performance, carrier choice and stock consolidation to reduce their costs.
In addition, tracking the end-to-end produce journey creates a more complete inventory view so planners can make real-time decisions about where stock is needed most, reducing stock-outs and lost revenue.