When people think of artificial intelligence (AI), they often conjure movie scenes with robots taking over the world. Tech entrepreneur Elon Musk hasn’t helped that image by calling AI the world’s “greatest existential threat.” While great for the box office, these misrepresent AI and discount its tremendous benefits for nearly every aspect of our lives.

Driver-assisted cars, improved customer experiences, cancer detection, and wildlife conservation – artificial intelligence is powering it all, but that’s just a small portion of how AI impacts our everyday lives.

What is artificial intelligence?

Artificial intelligence comprises computer systems able to perform work typically limited to human intelligence. Machines use large amounts of data and its patterns to learn tasks. The technology becomes “intelligent” over time through experience to achieve decision-making abilities comparable to humans. Using this learning, AI creates automation for specific activities typically performed by humans.

Is AI the end of the workforce as we know it?

Former Alphabet Inc. Executive Chairman Eric Schmidt shared a story of automation at the Global Digital Futures Policy Forum in 2017. The introduction of ATMs in 1969 was thought to be the elimination of teller jobs in the banking industry. However, the number of tellers doubled between 1970 and 2010. ATMs allowed banks to operate with fewer tellers, which supported the opening of more banks, increasing teller jobs overall. The moral of the story? While artificial intelligence will change job duties over time, it doesn’t necessarily mean the elimination of jobs.

Doug Thompson, president of Agilify Automation, which specializes in machine learning, often gets asked about AI’s impact on staffing. He doesn’t see AI automating whole jobs, but instead giving higher-level cognitive opportunities for staff and leaving lesser tasks to computers. When speaking to the Indianapolis Customer Experience Professionals Association recently, he said, “If a company doesn’t remain competitive, people will lose their jobs. If a company applies AI to process more volume at higher quality, they remain very competitive and don’t have to eliminate jobs.”

What are AI’s major benefits?

Resource savings

AI is a time and money saver for organizations. Traditional IT projects often require long development cycles with expensive internal or external human capital attached. Machine learning projects by comparison can be deployed more rapidly with less money. Surveyed organizations at the forefront of AI adoption report seeing up to 44% cost savings on projects. AI also brings new tech to legacy systems. The risks associated with switching CRMs or ERPs keeps many businesses on outdated technology. With the assistance of subject matter experts within the business to identify areas for automation, machine learning can bring new life to existing systems at a significantly lower cost than adopting a new management system.

Data discovery

Approximately 90% of the world’s data was created in the last two years. This glut of information presents prime opportunities for machine learning. Unlike humans, artificial intelligence can analyze vast amounts of data quickly. Businesses can leverage information never considered before to create competitive gains.

Connectivity

Artificial intelligence works across systems and can streamline multiple databases. Consider a customer service representative working with clients of various product lines. Information often sits within different systems requiring CSRs to access multiple data sets to generate solutions. You know it’s happening when you hear, “Can I put you on hold for a moment?” Artificial intelligence brings this data together rapidly allowing CSRs to quickly access answers to improve customer experience.

Error Reductions

AI lives on data inputs. Clean information eliminates errors caused by human interpretation. AI also minimizes person-to-person knowledge deterioration when training. Machine learning brings continuity to job-related tasks and the timing of their delivery across staff for better employee management. Machines, unlike humans, also don’t take vacations or get sick. Their work is always as good as the data given to them and they can work continuously.

What can be automated?

Think of AI like an Excel macro – it learns repetitive tasks and executes them as many times as needed. Ask your staff what tasks they do daily. Where do they get the information and what steps are taken to complete the task? How much time would be saved in automating the task? What additional work could replace that time? AI automation time adds up quickly. Even 60 seconds a day across 80 associates generates significant opportunities in an eight-hour work day for a company.

Does FreightRover use AI?

FreightRover’s affiliate partner Rover180 recently announced its acquisition of Vemity, an Indiana-based company specializing in artificial intelligence automation and machine learning. As a result, FreightRover will soon integrate artificial intelligence into its PayEngine platform to improve invoicing and supply chain payment processing. Vemity’s technology allows PayEngine to harness often overlooked data to reduce manual work, improve invoice accuracy, and increase payment velocity for buyers and vendors along the supply chain. The technology provides better payment processing scalability without increased time and effort.

What’s Next for AI?

According to The Brookings Institution, the US currently spends approximately $1.1 billion annually on non-classified AI projects compared to China’s commitment of $150 billion over the next decade to the technology. To stay competitive, President Trump recently signed an executive order called the “American AI Initiative” to dedicate more federal resources toward artificial intelligence advancement.

We will continue to operate in an AI-filled world with new discoveries happening in nearly every sector including healthcare, manufacturing, retail, and finance. Unlike the Hollywood movies, rather than robots taking over the world, they will be helping to solve the world’s challenges. To quote HubSpot, AI isn’t “human versus machine. It is human and machine versus a problem.” With that in mind, the opportunities are endless.

Companies across the US are extending pay terms, leaving suppliers to pay the price.

Days payables outstanding at the nation’s 1,000 largest companies averages nearly 57. More than 40% of all shippers require pay terms greater than 30 days. Some of the nation’s largest companies even stretch days to pay to 120.

Extended pay terms financially strain suppliers, especially smaller businesses susceptible to cash flow struggles. This is particularly true for transportation providers, 97% of which fall into the small business category with fewer than 20 trucks.

Factoring addresses conflicting capital interests between companies and their suppliers by providing accelerated receivables at a fee. If leveraged correctly, factoring improves liquidity and profitability for suppliers. However, lack of understanding sometimes leads people to give factoring a bad rap as a poor business practice rather than a helpful financial tool. Those individuals might be the ones leaving the most money on the table.

Bad Rap #1: “Anyone who factors isn’t running their business properly.”

Transportation requires many large upfront investments for equipment and insurance, in addition to several thousand dollars spent weekly for fuel and pay. Businesses must have good cash flow to survive, which factoring provides. Receivable delays have a ripple effect contributing to financial impacts like late payment fees, loan defaults or credit line interest that could cost a transportation provider more than a factoring fee. Extended pay terms also stymie business growth in an industry currently short 50,000 drivers. Every business is different; therefore, factoring does not indicate poor cash management. Rather it shows companies working to thrive in this very capital-intensive industry.

Bad Rap #2: “I do all the work for you to get paid.”

The right factoring partner should decrease a client’s workload. Good factoring companies, like FreightRover’s partner Rover180, assume responsibilities for much of the back-office work around payments. First, factoring companies check shipper credit before a carrier picks up a load to ensure they are hauling for solvent businesses. Clients then submit invoice images by mobile phone or email. The factor issues payment to the client and collects on the invoice as it becomes due from the payor. The transportation provider can spend their time and resources moving more freight rather than calling multiple shippers collecting on invoices.

Bad Rap #3: “I’ve got bad credit. Factoring won’t help me.”

Factoring cares about the credit worthiness of the shipper/payor, not the payee. Many transportation providers that struggled with credit in the past prefer factoring. It often results in a lower rate than high interest short-term loans and provides quick payments to businesses unable to obtain credit otherwise.

Bad Rap #4: “You never know what you’ll actually be paid when you factor.”

Not all factoring companies are created equal. Understanding the factoring contract is key to managing receivables and knowing deposit amounts in advance. Some factoring companies offer a low invoice factoring rate, and then make additional money from monthly minimum requirements, invoice processing fees, and payment issuances. Other factoring companies might offer a slightly higher factoring rate and eliminate all other fees. Non-recourse agreements command higher rates than recourse. Factoring companies also consider how quickly they receive payment on invoices. Shippers with extended terms beyond 30 days could prompt higher factoring rates on invoices to account for the cash float. Businesses that know their contract and shippers, know their receivable amounts due.

Bad Rap #5: “Factoring costs too much.”

Companies have many financing options for their business, and factoring represents one of them. Transportation providers should compare factoring fees to other options like loans or credit to see what rate works best for their business. Factoring often proves to be the lowest fee option. Many suppliers that factor include the rate in their linehaul agreements with shippers to get paid quickly without compromising overall income. Businesses also benefit from other savings factoring companies may provide around equipment, fuel and insurance.

Factoring also creates some parity among shippers. Freight decisions transition from when a transportation provider will get paid to better metrics like lane quality, utilization and load rate to maximize profitability.

Bad Rap #6: “Factoring takes too long to get paid.”

Factoring issues quick payments by design. If a transportation provider does not receive payment within 24 hours, which is industry standard, a broken process with the factoring company likely exists and it is time to ask questions.

Bad Rap #7: “Once you start factoring, you can never stop.”

Factoring companies work hard to keep your business, but you can cancel based on contract terms. Contracts for reputable factors include defined durations and reasonable termination notice periods. To switch factoring partners, the process typically requires a written notice of termination and an authorization agreement to transfer receivables. The new factoring company will issue notice of assignments on the transportation provider’s behalf to each payor to update them on where to send funds. Switching factoring companies does require coordination between all parties, but the cost savings can be worth the work.

Businesses letting the myths outweigh the math might be missing out on money. To learn more about how the best factoring companies set themselves apart, watch our quick video on FreightRover Factoring, test our savings calculator, or request the right questions to ask factoring companies.

Major parcel carriers are sounding the warning bell on possible significant service disruptions this holiday season, which could dramatically decrease capacity as soon as November 8. This also comes on the heels of announcements of free holiday shipping from Target, Walmart and Amazon to boost sales. With annual ecommerce sales expected to peak during Q418 under already constrained less-than-truckload conditions, losing another 7-10% of total LTL capacity will impact everyone.

What does this mean for you?

You already may be experiencing freight rejections. Many 3PLs are actively directing customers to alternate carriers to keep freight moving. This is tightening capacity across the entire domestic LTL network, an effect felt by all shippers, not just parcel carrier users. As available capacity lessens during the Q4 peak season, rates will rise. Shippers should expect to pay more this season, which means consumers will too.

What can you do about it?

  • Strengthen your bench – many shippers prefer specific LTL carriers, whether for price, service or speed. Despite having a favorite, savvy shippers often establish relationships and rates with multiple LTL carriers to ensure they always have options for moving their goods.
  • Plan ahead – the LTL shipment you’re used to tendering same-day might not move as planned. Give LTL providers as much notice as possible so they can maximize trailer space and routes to move your shipment on time.
  • Know your ‘stuff’ – providing inaccurate information to carriers regarding shipment dimensions, weight or class that impacts their asset utilization is a quick way to get kicked to the curb. It’s also a way to get your shipments left on the dock while working out the details. When competing for capacity, the easiest shippers often get the space.
  • Ask for help – using multiple LTL carriers under different rates without a transportation management system is tricky and time-consuming. Look to leverage a system or 3PL for easy quoting and dispatch that doesn’t break the bank.

How can FreightRover help?

FreightRover’s SmartLTL offers multiple quick fixes for shippers responding to the looming LTL capacity dilemma:

  • Capacity options – The system provides shippers immediate access to multiple carriers specializing in all US regions.
  • Rates – Shippers can leverage their existing carrier rates or use pre-established carrier rates without individual contract negotiations needed.
  • Speed – SmartLTL offers quick quote-to-tender capabilities in under 60 seconds. Shippers receive immediate quotes from multiple carriers and can sort by rate or speed of delivery.
  • Efficiency – Easy data saves accelerate shipment builds. Create the information once, save it, and use the easy search and click option for creating future shipments.
  • In-system shipment tracking – Shippers receive a tracking link at shipment dispatch to monitor their shipment or can leverage the customer service team for shipment information.
  • One-click invoice approval – SmartLTL publishes invoice amounts online for easy review without the unnecessary paperwork.
  • Streamlined payments – FreightRover acts as a third party to issue carrier payments, so shippers move to one payee. This eliminates the need for long carrier onboardings and managing multiple carrier pay terms.

Perhaps most important, regarding the impending capacity question, FreightRover can get shippers operating in the platform within 24 hours. Launch includes three easy steps: 1) agreement signatures, 2) quick system tutorial, and then 3) shipment builds begin.

The system doesn’t require subscription fees or licenses, so shippers only pay a low fee per shipment for SmartLTL access. They can use the system permanently or until LTL capacity returns to normal.

It’s always good to have a Plan B when it comes to shipping. Block some time to think about your alternative strategy as the capacity crunch lingers. SmartLTL is here to help. It makes a great Plan B, but after trying it, we think you’ll consider it your new Plan A.