Some fear what AI will do, but others are embracing the benefits to be gained. In the U.K., bus companies have struggled to keep buses running on time due to traffic and other delays, which frustrates passengers as they never know when their bus will truly arrive.
To fix this issue, one operator embraced AI-powered software to design and continually update the timetables. With AI’s real-time changes and analysis, responsive scheduling is possible. Since embracing the software in November 2022, buses in three areas are on time 20% more often. That success is leading to a U.K.-wide rollout.
Precision scheduling is just one way that AI can change the trucking industry in the U.S. Many other benefits occur when AI is implemented in the trucking industry. Explore the benefits of AI-powered freight factoring.
Freight Factoring in the Current Economy
When you have a freight factoring arrangement, you submit a bill of lading to a factor for processing. An underwriter has to take that payment request and look over all of the paperwork, the broker or shipper’s credit rating, and the agreement you have in place. All of this is considered before determining if the approval is too risky.
There is a chance a payment request will be denied. That’s why freight factoring often provides free business credit checks. You can check a broker or shipper’s credit rating before you take a job.
Because factoring requests are processed online, but with human underwriters, it can lead to slower processing times. It’s important to work with a factor that specializes in AI-powered credit assessments and approvals.
Learn How AI is Transforming Freight Factoring
AI automates the process by using data analytics to process invoices in a fraction of the time. Algorithms use brokers’ and shippers’ real-time credit reports to make assessments of their creditworthiness, which means faster payments for you.
It can also use the data it collects to determine risk and identify fraud. The FMCSA warns against fraud as it’s a problem. It occurs when someone claims to be a broker, but they’re not registered with the Federal Motor Carrier Safety Administration or they’re illegally using another carrier’s USDOT number.
Double brokering is a common type of fraud that’s affecting trucking companies. A fake broker poses as a legitimate one and offers to handle shipping for a customer at a cheap rate. That fake broker then subcontracts the job for a much higher rate and collects the extra. It often leads to carriers not getting paid. You don’t want to do the work and learn you’ve been scammed and won’t get paid. AI can quickly scan a company’s history and look for a history of scams like that.
In addition, you can use AI tools to plan your work for you to optimize your routes and loads to ensure you never drive with a partial load, which wastes potential revenue.
Where Is the Future of AI Factoring Solutions Heading?
That’s where AI is now, where is the future of AI freight factoring heading? It’s going to be much easier to create arrangements and services that are precisely tailored to match your needs. needs.
AI factoring may soon pair with blockchain to use cryptocurrencies for secure payments. Imagine getting paid via Bitcoin and not having to worry about sharing bank information anymore. It’s going to be possible with AI in freight factoring.
Like the buses in the U.K., you could have AI accepting new jobs for you after running stringent checks on new brokers and shippers. AI can help plan routes and reroute you long before you realize there are issues with traffic. It can also find the shortest, safest distances to keep your fuel consumption to a minimum while also ensuring you arrive in plenty of time for the scheduled delivery.
Self-driving trucks are another way AI is going to start changing the industry. Work faster by having the truck take over driving while your driver gets the necessary sleep. AI and automation never need to sleep or take time off.
With Advancing Technology Comes Concerns You Shouldn’t Ignore
While AI and advancing technology are the wave of the future, there are concerns you have to consider. If you’re working with a freight factoring company, they must take every possible precaution to secure your private information. Data security has to be of the utmost concern.
Ask the freight factoring company about the steps they take to protect your data. They need to use encryption when sending and receiving information from their customers. Your information should be stored behind strong firewalls. Only a handful of workers should be able to access any personal information. If everyone in the company can pull up your financial file, it’s risky.
Some people worry that AI is going to replace people. Workers are still needed for complex decisions and to provide the human touch when it comes to customer service. Computers can only do so much. Workers need to be trained on how to work side-by-side with AI in factoring companies. If you partner with a freight factoring company that uses AI, don’t worry that your needs for impeccable customer service will be ignored. It’s not the case.
Follow These Tips to Get the Best Factoring Partnership
AI-powered freight factoring ensures you get paid fast, and there are many other benefits to be gained with the right partnership. You’ll have immediate access to key financial data sets, and that helps you make smarter business decisions. You’ll find it’s a lot easier to grow your business when you have real-time financial information on things like what payments are approved, when the money’s coming in, and what payments are still pending.
However, as helpful as AI is, it requires human interaction for optimal performance. Employees will learn valuable skills using AI-powered software, and that might cause some stress. It’s so much easier than they might think, so it’s important to encourage employee growth.
Saint John Capital has helped many small trucking companies grow into national businesses since the 1990s. With our AI expertise, range of additional services, and favorable freight factoring agreements, we’ll help you make the arrangements for the lowest fees. With low fees, it’s easier to grow your business as you have more revenue to put towards growth. Reach us online or by phone to learn more about our freight factoring services.
