The global maritime industry generates freight revenues of about
$380 billion annually, estimates the United Nations Conference on
Trade and Development, yet relies heavily on outmoded invoice
presentation and payments processes.
This is now changing, with major payments processors turning their
attention to this potentially substantial market.
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Setting the scene, Deutsche Bank and the world’s largest supplier
of electronic commerce solutions to the shipping industry, INTTRA,
joined forces in April to offer container shipping companies the
ability to automate invoicing and payments processes (see EPI
262).
Hard on Deutsche Bank’s heels, US payments processor First Data has
announced the launch of PayCargo, a service it claims to be the
first to global online freight payment system for the maritime
shipping industry.
Established in November 2008, PayCargo is a joint venture between
First Data and Coihue, a company formed by a group of shipping
industry executives.
Commenting during the formal launch of PayCargo, First Data group
manager for transportation Chris Courts said: “PayCargo can
potentially revolutionise the payment process in the shipping
industry by replacing manual processes with technology that reduces
time, errors, and ultimately costs associated with making and
receiving payments for shipments.”
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By GlobalDataFirst Data also announced that among PayCargo’s first adopters is
one of the participants in the initial pilot project, US-based
Econocaribe Consolidators, one of the world’s largest non-vessel
operating common carrier companies.
Indicative of cost saving a more efficient billing and payment
system could achieve, research firm Aberdeen Group estimates that
shipping companies pay an average of $18 to process an invoice, and
some companies pay $40 or more.
Courts noted that disputes can cost up to an additional $15 in
personnel expenses, a problem PayCargo addresses directly with an
incorporated a dispute management function.
“Disputes are a major issue in this industry,” noted Econocaribe’s
president John Abisch.
“Disputes are a major issue in this industry. PayCargo gives people
on both sides of a transaction insight into the billing so issues
can be addressed and payment can be made efficiently.”
