Giving air cargo cashflows a little more oomph with innovative payment solutions
Technology is transforming air cargo with innovation being injected right across the value chain. But there's one area that's due for little more tender love and care: air cargo payments. It's a complex issue with so many different currencies, systems, processes, and stakeholders to deal with when connecting the dots between shipment origin and destination. And this is why it typically takes 30-45 days for payment remittances to come through after service completion when unexpected surprises don´t appear.
But the reality is that unexpected charges can accrue quickly across the different phases of air cargo's workflows. Line haul charges for freight, surcharges on fuel, and fees related storage, clearance, and handling are just some of them. When unplanned charges arise, contested bills can take several months to settle after service completion. And that's not good for the cashflow.
While it's possible for many of the incremental charges that can snowball into the Air Waybill (AWB) to be assessed early, why does it take so long to finally receive payment? Payments in air cargo is typically a process heavy and time consuming business activity that requires frequent human intervention for tracking and reconciliation. This is often amplified by a lack of transparency and real-time visibility across the shipment lifecycle, representing an immense down the road challenge for air cargo book keeping.
How iCargo Revenue Accounting drives innovation in payments
Every challenge has a solution. In this case, seamless and secure payment mechanics along with transparent shipment lifecycle visibility can accelerate remittances, enhance the user experience, and improve cashflow.
Three ways iCargo Revenue Accounting helps the air cargo value chain accelerate the payment cycle:
1.Fully integrated air cargo revenue accounting
By fully integrating the sales, operational, and back-office revenue functions, end-to-end, for cargo and air mail, iCargo Revenue Accounting acts as a single source of truth for complete receivables management. This provides accurate, real-time visibility on revenue related information, and allows core processes to be automated. The ability to rate, prorate, bill, and account AWBs throughout the shipment lifecycle streamlines processes, required supporting systems, and human intervention.
2.Digital payments platforms and open APIs
iCargo Revenue Accounting's open and secure APIs facilitate integration with industry and partner systems for closer collaboration. Integrating with digital payment platforms, like PayCargo or CargoSprint, facilitates payments options, drives efficiency, and allows faster revenue reconciliation. Access to an online portal, allows real-time access shipment data, including charges and invoices, and billing discrepancies to be raised and resolved completely online.
3.Shipment through flow acceleration
iCargo Revenue Accounting supports advance payment and incentivization capabilities throughout the shipment lifecycle. This helps accelerate origin to destination throughflow by reducing procedural bottlenecks, such as reducing trucker queues at airline payment kiosks for receipt or delivery of shipments.
Fuelling air cargo cashflows
Air cargo has enjoyed record-breaking growth over the past couple of years but the industry still has a long way to go to unlock its full revenue potential and reduce costs through efficiency gains. Air cargo payments is a low hanging fruit to capitalize on. While the traditional payments landscape is complex, inefficient, and subject to intense regulatory scrutiny, innovative technologies are already generating competitive advantage and partnerships for those using them… and healthier cashflows with more oomph to them…
Arun Sekhar is a Senior Product Consultant for IBS Software's iCargo product line. He has over 11 years of experience in functional consulting and managing large and complex iCargo implementations across Europe, Asia Pacific, and the Americas. He has worked closely with a wide variety of airlines worldwide to transform and redefine their cargo businesses and processes in line with industry initiatives and best practices. Presently, he is responsible for managing iCargo´s revenue accounting functions for accounts in the US region.