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3 Ways Payment Automation Helps Build a Robust Revenue Model For Logistics Operations


3 Ways Payment Automation Helps Build a Robust Revenue Model For Logistics Operations

The transportation and logistics industry faces a myriad of challenges that impact their business operations. Rising costs, driver shortage, and inefficient operations have a major impact on helping organizations meet revenue targets. One of the major challenges that easily gets unnoticed is maintaining a healthy cash flow. The use of highly configurable Logistics Management Software can help the company meet the need for speed to display payments and get paid. As per Gartner, over 50% of the global midmarket and large enterprises will deploy procure-to-pay suites by 2025.

In this blog, get a detailed explanation of how different personas like DHL, FedEx, Mcdonald’s, KFC, Amazon, and Uber, to name a few,  benefit from a robust revenue module. 

  • Rules-based Costing Charts For Shippers- 

By using logistics management software, the business can set separate rate charts for each shipper. The dispatcher can set the rate profile for different shippers and define the service area. They can easily create multiple rate profiles for delivery types. For example, express delivery, standard delivery, 2-day delivery, special delivery, etc.  Additional costs that can be incurred during delivery can include-

  • Set rates for handling fees
  • Location-based fees are based on wait time, load, and unload time
  • Any miscellaneous/ custom fees
  • Surcharge
  • Insurance
  • Cancellation fees
  • Reattempt fees
  • Discounts 

By supplying these details, the system will automatically help calculate prices for different service types and cost to customers for shippers. This automated calculation will remove manual errors and streamline shipping payments for seamless deliveries for all your shippers under one platform. 

  • Optimizing Costs For Carriers- 

Whether you are using owned fleet or third-party service providers, timely payments to carriers are of utmost importance. They can be the source that might have to be properly studied to ensure efficient utilization of the fleet for deliveries. But how can the cost be calculated to ensure delivery is assigned to the best carrier?

Basic Cost- This will calculate the base rate of operation, which is combined with rates based on distance, weight, volume, and pooled milestones. This gives insight into the actual fleet cost.

Basic Cost= Base Rate + Rates Based On (Volume+ Weight + Volume + Pooled Milestone)

  • Surcharge fee that includes: Fuel surcharge, Zone surcharge, and Surge timings
  • Cash handling fees on completion of milestones
  • Assign handling fees based on skill sets offered 
  • Location fees
  • Insurance
  • Cancellation fees
  • Reattempt fees
  • Taxes on milestone completion

By computing all the costing, the operations managers can get detailed information on delivery in the reports and analytics section. This will help the team understand the best carriers which can be assigned for specific types of delivery. And this will relate to cost savings for the dispatcher. 

  • Daily Driver Payments Updates- 

One of the best ways to retain drivers and improve fleet efficiency is by offering them incentives. For example, the business can incentives drivers for handling delivery during surge hours or holiday seasons.

Using this policy, the dispatcher can set rate profiles for deliveries associated with every delivery associate. Similar to carriers, the driver rate profiles can be created using logistics management software to ensure seamless delivery. The drivers using the driver app can be easily notified daily to keep track of their incentives. 

A leaderboard can easily be generated to keep drivers motivated to outperform their counterparts. With bonuses and incentives easily integrated and calculated, drivers get real-time updates and remain informed about the payments- offering complete transparency regarding their payments. 

This helps the organization to retain drivers, create an efficient fleet to ensure on-time delivery. As the calculations can be handled by the logistics management software, there is no longer any need for manual intervention to calculate the payments. This will future help the organization reduce operational costs as they will be saving costs for additional resources or third-party integrations to get the job completed. 

Additionally, modern logistics management software also can integrate with digitizing payments by integrating with QR payments or via PoD payments to avoid cash collections and go fully digital. This helps remove additional human intervention at warehouses/ hubs, ensuring no gaps in payment collection. Payments Source reports that 92% of electronic invoices are paid instantly as compared to 45% of paper invoices.

The use of logistics management software that can account for payment history, track dispute details, and automate the collections process will enhance the relationship between buyers and suppliers. Companies that use electronic or software invoicing see a significant reduction of up to 49% in delayed payments and a 37% reduction in failed payments. By adopting logistics management software, organizations can also speed up their payments, helping the team to focus on other areas, and helping elevate customer experience.


This article discusses how the use of logistics management software can help  businesses build a robust payments module that can optimize costs for shippers, carriers, and drivers. This will help your organization beat competition and focus on other key areas to enhance customer experience.

Author Bio

Matt Murdock works for a leading SAAS-based platform called LogiNext Solutions. Where he helps businesses optimize their logistics operations and improve their delivery performance. With a passion for innovation and technology, Matt is always looking for new ways to streamline logistics processes and enhance customer experiences. In his free time, he enjoys writing blogs based on his experience in the logistics industry. Happy reading!