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Automating cash flow, part 1: peer-to-peer payments in trucking

Evans Delivery Company Inc. logoIn the anatomy of a trucking business, if profitability is the central nervous system then cash flow is the lifeblood.

Declining profits may cause motor carriers or freight brokers to develop an abnormal heartbeat but when forces constrict cash flow the survival of a business is immediately at risk.

A variety of technology can be used to keep cash flow healthy. Some are designed to maintain tighter controls on the outflow, or expenses, to slow the bleeding. Other technologies can help accelerate the conversion of receivables to cash.

In this three-part series on cash-flow technology we begin with a new kind of electronic payment system companies are using to both manage expenses and accelerate cash receipts.

The check’s in the mail

As the logistics and operations manager of Evans Delivery, Sue Schoenthaler is in charge of a process that impacts cash flow; she manages payables for the carrier and brokerage operations of the Schuylkill Haven, Penn-based company.

Evans Delivery operates more than 1,300 tractors across multiple companies in intermodal, truckload and flatbed markets. One of its companies is West Motor Freight, which provides full-service truckload and brokerage for customers in the Eastern United States.

The number of carriers in the brokerage database used by West Motor Freight and other companies in the Evans umbrella is more than 12,000, she says.

Evans Delivery recently began using a new peer-to-peer electronic payments system from Comdata. Schoenthaler expects the system, announced in April as Comchek Mobile, will save the company money and offer cash flow benefits to carriers that haul for Evans Delivery.

“They will not have to deal with checks in mail,” she says.

Trucker using the Comchek Mobile system on his smartphone

In April, Comdata announced a new peer-to-peer payments system for the trucking industry, Comchek Mobile

Currently, the business pays carriers with paper checks 30 days after invoice. It also offers a weekly quick pay program for a two percent fee on invoices.

Starting in July, Schoenthaler plans to require carriers on Evans’ weekly pay program to use the Comchek Mobile system to receive funds. Soon afterward, the payment platform will be rolled out to carriers on the 30-day pay cycle.

“I think once carriers hear about Comchek Mobile and the word starts spreading it will be a good incentive for carriers to haul for us,” she says.“I think we will have thousands of carriers using it by the end of the year.”

Evans’ corporate office currently uses Comchek Mobile to transfer funds to a company-owned factoring firm located in Fargo, North Dakota. The factoring company receives the funds electronically from the corporate office and then pays carriers for their invoices.

Evans Delivery is in the process of building a new transportation management software system and plans to integrate the Comdata product into its payables process, she explains. Until then Schoenthaler says she will be using the Comdata portal to send funds.

Peer payments

Comchek Mobile is the first peer-to-peer payment platform in the trucking industry, says Terrence McCrossan, senior vice president for Comdata North American Trucking. The platform expands on the capabilities of the Comchek Express money transfer system from Comdata that has been in the trucking industry for 40 years.

Shippers, brokers and carriers use Comchek Express to send unique codes to drivers they can exchange for cash at locations in Comdata’s proprietary merchant network.

Comchek Mobile is an app that fleet managers, drivers, lumpers, merchants and other parties can download to their personal devices. Once drivers or other parties sign up and are registered to use the app they receive a unique Comchek Mobile ID number. They also get a Comdata debit card.

Fleets can transfer funds to drivers electronically using their ID numbers. They can use Comchek Mobile to transfer funds directly to other parties as well such as lumpers or merchants by using their IDs instead of having drivers pay with cash and turn in receipts.

Another option is to transfer funds to drivers and other Comdata Mobile users via Comchek Express; the recipients would simply enter the Comchek Express code into the mobile app to receive a funds transfer. Comdata says there is no fee to transfer funds between Comchek Mobile users with IDs.

“To pay funds directly is a very big win,” McCrossan says.

At any time, drivers can transfer funds from Comchek Mobile to their personal bank account or to their Comdata debit card to make purchases at fuel stations, hotels and other locations over the road.

Not only can carriers pay drivers using the system, but for brokers the new technology provides “a very quick ability to get carriers set up and establish a pay practice without collecting bank information and other details,” he says.

Small carriers and independent owner operators that use Comchek Mobile will be able to receive funds directly from their customers such as freight brokers, and transfer those funds to other Comdata Mobile users – like drivers in their fleet – who can then move funds to their Comdata debit card or to their bank accounts as needed, he explains.

Unlike the Comchek Express system, all of the transactions sent and received through the mobile app are digitally recorded. Users have access to their transaction history through the app and online portal to reconcile their personal and business expenses, he says.

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Aaron Huff is the Senior Editor of Commercial Carrier Journal. Huff’s career in the transportation industry began at a family-owned trucking company and expanded to CCJ, where for the past 14 years he has specialized in covering business and technology for online and print readers and speaking at industry events. A recipient of numerous regional and national awards, Huff holds a Bachelor’s Degree from Brigham Young University and a Masters Degree from the University of Alabama.