Blockchain-based fintech firm prepares to enter $500 billion freight settlement market

Although rare, the real utility of blockchain does exist, as evidenced by one company's efforts to reduce transaction fees in supply chains.

The world is quick to blame inflation for rising prices at grocery stores and retailers. It was the No. 1 political question for Election Day voters in the United States. For example, media sources recently reported polling data that 85% of Americans could not afford to spend $200 on a Thanksgiving meal in November 2022, and only 25% could afford $100. /p>

However, few recognize that inflation is only part of the problem. Higher product and service costs are also directly attributable to settlement fees paid by carriers who are forced to take out the equivalent of a payday loan in exchange for their freight bills.

Shipper payment terms in the transportation industry are known to be huge, and most carriers can't afford to wait 30-180 days to get paid. When a carrier factors, it pledges its accounts receivable collection rights to the bank, and in exchange, the bank advances money within approximately 10 business days.

Based on industry averages, this cost to carriers is 3% of each receivable, often increasing to an annualized interest rate of 25%. The bank then waits the 30 to 180 days and collects directly from the freight forwarder. If inflation is seen as a silent tax, invoice factoring is a second layer of silent taxes on everything we buy.

More than one million trucking companies in the United States factor 100% of their invoices, and 50% of third-party logistics companies do as well. Due to inflation, large carriers also lose 3% or more of the value of their invoices when they wait more than 60 days to be paid by shippers. These costs create...