How Fintech is Taking over the Logistics Sector A few start-ups are offering the pay-as-you-go model, whereby one can track the shipment and know the exact distance covered by the truck or carrier service, and pay accordingly

By Sanchita Dash

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Be it the early hours of the morning or the peak hours of the day, highways of India are incomplete without the scores of trucks, all filled with sacks of goods being transferred from one state to another.

The Indian logistics industry is a thriving one and a recent report by credit rating agency ICRA states that the sector is growing by eight-nine per cent. Reports suggest that the Indian logistics market is set to touch $307 billion by 2020.

But this sector, too, is on the cusp of a revolution. It's a majorly unorganized sector and leaves open many loopholes for entrepreneurs to sweep in and create solutions.

At the same time, financial technology is spreading its wings to soar across all sectors. So, when fintech meets logistics tech, it looks at streamlining the payment processes involved in the sector.

Here's a look at the top four ways in which start-ups are using financial services to be a part of the ever-growing logistics industry.

Supplier Finance Management

Supply-chain finance basically refers to opitimizing the cash flow in a business that allows one to fund early payments to their suppliers. Now, for traditional logistics business owners it could turn out to be a difficult task, but start-ups are coming forward to make things easier for them. This makes the functioning of SMEs easier. Internationally, there are many start-ups like Taulia, which help companies improve their working capital.

Pay and Ship

With many irregularities in this sector, bills and receipts often go missing or are even unreported. Start-ups are offering invoice management services to help out SMEs and businesses in the transportation sectors.

From digitizing payments in these sectors to automating the processes of producing bills and even acknowledging receipts, fintech start-ups make way for easy functioning. But it doesn't stop there. Start-ups are combining logistics and fintech to offer the same to e-commerce websites. Start-ups like Ecommexpress are not only offering logistical solutions but also processing payments for marketplaces.

Start-ups like Roambee are also offering the pay-as-you-go model, whereby one can track the shipment and also know the exact distance covered by the truck or carrier service, and pay accordingly.

Blockchain in Logistics

Ever since blockchain has been introduced in fintech, its use-cases have been fitting in everywhere. And now, logistics sector, too, is going to get a taste of the blockchain.

Internationally, start-ups have already started implementing the technology for supply chain finance. This facilitates lending to smaller establishments as well as management of records. In fact, Skuchain, a Singapore-based start-up, has a product called Bracket, which covers the A-Z of logistics, right from placing the order to processing the payments. All this while, it maintains a transparent record.

Automated Trade

With the advent of Artificial Intelligence, more and more companies in the sector will soon start automating the entire process that is involved in logistics. Adhering to a customer's request, the implementation and execution of the same and even processing payments will soon be done at the click of a mouse.

Sanchita Dash

Entrepreneur Staff

Former Senior Correspondent, Entrepreneur India

In the business of news for 5 years now. Making my way across India thanks to my career. A media graduate from Symbiosis, Pune, I have earlier worked with Deccan Chronicle (South India's leading English daily), T-Hub (India's largest incubator) and Anthill Ventures (a speed-scaling platform). 

Stories, movies and PJs are my thing. 

If you hear 'The Office' opening score randomly, don't worry it's just my phone ringing. 


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