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

The world is quick to blame inflation for the rising prices in grocery stores and retailers. This was the #1 political issue for recent 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.

However, few realize that inflation is only part of the problem. Higher costs for products and services can also be directly attributed to settlement fees paid by transport suppliers who are forced to take out corresponding payday loans against their freight invoices.

Shipper payment terms in the shipping industry are known to be extreme, and most shipping companies cannot afford to wait 30-180 days to get paid. When a carrier factors, it pledges the collection rights in its accounts receivable to the bank, and in exchange the bank advances cash within approx. 10 working days.

By industry average, this cost to carriers is 3% of each claim – often increasing up to 25% annual interest. The bank then waits for 30–180 days and collects directly from the shipping orderer. If inflation is considered a silent tax, invoice factoring is another layer of silent taxes on everything we buy.

More than 1 million US trucking companies honor 100% of their invoices, and 50% of third-party logistics companies do as well. Due to inflation, larger carriers also lose 3% or more of invoice values ​​when they wait more than 60 days to be paid by shippers. These costs create higher shipping rates, and the profits ultimately trickle down to every household and consumer.

Fixing a broken supply chain by settling on the blockchain

TruckCoinSwap (TCS) is a fintech and shipping technology company that uses a blockchain-integrated mobile app to provide fast and free settlement of freight claims to transport companies. In addition, TCS is listed on CrossTower in the US and abroad in 80 countries, and is now also listed on Uniswap.

Chief technology officer Jake Centner explained:

“Centralized exchanges can work very well and the team couldn’t be more proud of the relationships TCS has made. However, the TCS token also needs to have a decentralized exchange and non-custodial option in the ecosystem for carriers and holders. Uniswap has been the gold standard in this area.” »

To that end, TCS has created a process and platform identical to how carriers settle now, with one extra step. A few days after uploading shipping documents to the TCS mobile app, a push notification is sent and settlement is made available in the real-time value of US dollars (USD) to TCS tokens.

The carrier can then accept settlement via direct deposit from TCS. After receiving the balance in its crypto wallet, the carrier can immediately sell through the foreign exchange market to recover USD liquidity. By settling via TCS, and being able to sell within minutes, carriers avoid both factoring costs and crypto volatility.

Based on industry averages, TCS estimates that each factoring freight line can recoup a significant portion of its net income. In the supply chain, reducing operating costs makes transport companies more solvent and pushes down freight rates. Over time, commodity costs and, more specifically, food prices may fall.

Regarding the company’s adoption, CEO Todd Ziegler shared:

“TCS already has truckers involved in the beta, and we were just contacted by two more large strategies. One has 223 trucks. The other is one of the largest companies in the US that manages shipping documents, with over 500,000 transportation users. It’s telling that these companies are already interested in integrating with TCS.”

The future of shipping and blockchain

Earlier this month, TCS presented its solution at the Future of Freight conference to over 20,000 attendees and has since gained traction in both the crypto and transportation communities with features in FreightWaves, business publications and other related media.

With many strategic relationships already in place, TCS believes it is in a strong position to help the transport industry further into web3. Looking ahead to the intersection of the two industries, Ziegler offered:

“Following recent court decisions and the acceleration of the DCCPA [Digital Commodities Consumer Protection Act] on Capitol Hill we are going to see US crypto exchanges eliminate more coins. Many exchanges are already struggling with revenue and AUM [assets under management], and they are not going to stick their necks out in the wake of FTX. The projects without a real use case will be the first to go, and the digital assets with a value proposition for the industry will see larger market shares.”