Our Managing Director and CIO Manuel Faeh talks about the future of payments in logistics in an interview with the magazine „Der starke Mittelstand – Strategien, Lösungen, Wachstum”. The interview was published on 09.12.2022 in the complete edition and in the e-paper of „WirtschaftsWoche”.
Click here for the PDF version of the interview.
What challenges do medium-sized logistics companies face with regard to payment transactions?
80 percent of orders are taken on by small transport companies – these are shippers with one to ten trucks. They are the backbone of the industry. Challenge number one is the lack of digitization: Often, invoices and accounting are still done very manually there. The second challenge is that they rely on short payment terms. Their large clients, on the other hand, operate with long payment terms. And third, their large clients often operate with complicated payment mechanisms based on a multitude of intermediate steps that need to be fulfilled. But a small freight forwarder wants a manageable, straightforward fixed price.
JITpay has only been on the market since 2016 and is already considered a “hidden champion”. How did you come to be the European market leader?
JITpay’s USP is that we network various services along the invoicing process. No other competitor can do this, and we are revolutionizing payment transactions in logistics. We address precisely the challenges faced by small logistics companies by taking over their receivables and paying them out quickly and easily. We know the processes in logistics and want to support our customers far beyond pure factoring. After all, we may be a financial services provider, but we are logistics specialists at heart. What sets us apart: We work according to the “pay per use” principle, our customers are free to decide which receivables they hand over to us. This lowers the hurdles for small companies enormously. Our success proves us right: we are currently registering 100 new customers per month and expect up to 250 next year.
You distinguish between mere digitization and an intelligent ecosystem. Where does the added value lie?
A bad process is still a bad process when digitized. That’s why we’re not talking about digitization, but completely redesigning the value chain. The future of payments in logistics is the networking of all players or the creation of an intelligent ecosystem, which includes the platforms, the shippers, the TMS providers, the freight forwarders, the carriers, and the providers of mobility services such as fuel cards. We are not creating new interfaces, but integrating existing data and interfaces. In this way, we reduce complexity for the customer: He can thus concentrate on his value-creating logistics service, and we take care of the rest when it comes to billing and payment. We thus ensure transparency and liquidity.
What role do partnerships play in your business model?
Only together with partners can we break up traditional value chains and offer a closed ecosystem. For example, the partnership with TIMOCOM is essential for the order/freight exchange topic. With the strategic partnership with EUROWAG, which was concluded in September, we are acquiring everything to do with mobility services.
A look into the future: What will happen next with JITpay?
We want to offer small transport companies “Logistics Finance as a Service”. Our vision is to calculate the invoice value minus all operating costs at the push of a button – such as refueling, tolls, VAT reimbursement, vehicle leasing. We pre-finance or pay out this latest EBITDA value as a virtual cash pool. We handle all financial transactions from order entry to settlement. In addition, we will launch an innovation for shippers in 2023 with the “JITone” collective settlement, thus closing the loop from order origination to payment.