The crisis caused by the corona virus has caused major problems for the transport and the logistics companies. This is because the forecasts and estimates made for this year 2021 are not being realised, the situation is testing the true value of the services on offer, and so all the pressure is on.
The vital importance of transport to society
Transport and logistics play a major role in today’s society and economy, not least in the food chain. This ranges from deliveries to supermarkets, to the collection of products, to the food processing industries. The food chain is so important because it covers one third of the flow of the goods by road.
Two major risks for the transport companies
Companies have problems in the long term because of their insufficient recovery capacity, but in the short term because of a shortage of liquidity. Transport companies are basically exposed to two major risks. The first is the risk of a fall in demand that cannot be absorbed with flexibility, the second is the explosion of turnover in the short term caused by extreme circumstances.
The underlying problem is that, in the volatile realities, many companies find it difficult to calculate their own costs correctly.
Online networks and platforms
The introduction of the IoT (Internet of Things) and improved internet connectivity from mobile phones has enabled inter-connectivity, which has become more important since the health crisis began.
This directly affects the classical supply chain, which involves standard flows of goods between sender and receiver, as it will be replaced by a network in which anyone can participate.
This new network will be able to connect everyone in the private and business sectors to get products to consumers on the most efficient way. For example, this could lead to the merging of passenger transport and courier services. In order to realise this, they will draw on different algorithms, the internet and smart ICT applications to immediately link a transport need with available mobility.
Supply chain and “fast payment” services
The emergence of the coronavirus has had a global impact on the supply chain, which is challenging its cooperation.
Companies in the logistics sector are already beginning to realise that they can save a lot of money if the amount of working capital improves. This is because they will need less financing and banks are more willing to lend on a strong working capital ratio.
However, since the economic crisis of 2009, the payment term within the logistics and transport sector has increased significantly. As a minimum, a logistics service provider waits, currently up to 84 days according to the Permanent Observatory of Late Payment , for an invoice to be paid, this mainly affects the smaller elements of the chain.
The “Fast Payment” service seeks to improve the financial position of companies in the supply chain by spreading the financial risks. For example, it forces shippers to reduce the invoice approval time and to guarantee payment within 48 hours, which helps logistics companies to receive their money faster. So, we can say that the Fast Payment Service is a cooperation not only between financial institutions and companies, but also between the companies themselves. A trend that started before the pandemic crisis and has now become even stronger.
If you are interested in the Webtrans Fast Payment service or if you have any questions, our sales department is always at your disposal.
“Fast Payment from anywhere in Europe within 48 hours for a fixed fee.