Trax Technologies

An Innovative Trade Finance Solution Built for Supply Chain

A key pain point for leaders in supply chain management is freeing up enough working capital to meet the ongoing demands of the business. Inherent unpredictability — and lack of clarity around things like freight audit and payment processes — impacts the timeline of what money is available when. 

No one argues that more could be achieved with more working capital, but pursuing these opportunities is too often out of reach. The dynamics that perpetuate this limitation aren’t changing anytime soon. 

With an increasing demand for on-time carrier payments, heightened complexities in business development, and identified goals for corporate cost management, new finance solutions (purpose-built for supply chain) are needed.

Trax is meeting that need with our TraxPays+ Shipper Financing product, providing trade finance solutions that change the horizon of possibilities.

Trade Finance Solutions: Trax and Raistone

In partnership with Raistone Capital, Trax provides transportation and logistics trade finance solutions. 

We realize that global supply chain disruption has resulted in higher costs and payment delays. Without intervention or outside help, this disruption could put companies on a steady decline.

To ease cash flow pressure, we are offering innovative working capital solutions using a ‘Buy Now, Pay Later’ model.

To recap: here’s what we know you’re up against —

Internal mandates to extend Days Payable Outstanding (DPO)

— in tension with —

Carrier partners increasing rates and demanding faster payments

These dual imperatives put balance sheets and bank accounts under pressure.

Persistent market instability puts carriers in control, giving shippers little leverage since they can’t risk paying late and losing capacity. This and other dynamics have made a solution like this necessary, and it is yielding measurable results in the real world.

TraxPays+ - How This Shipper Financing Partnership Works

TraxPays is a payment automation product, which is now enhanced with TraxPays+ Shipper Financing, which adds a DPO extension and functions as a purpose-built financial solution that specifically serves the transportation logistics space. It provides numerous cash flow benefits, and the partnership between Trax and Raistone is making scenarios like this possible:

  1. Companies will use the Trax Freight Audit and Payment program to generate reliable invoices.
  2. Once those invoices are certified, Raistone provides capital for on-time carrier invoice payment, extending payment terms beyond that of the invoice.

The outcome of this is net positive for all parties involved:

  • Carriers get paid on time
  • Companies don’t exhaust working capital

This also extends shippers’ Days Payable Outstanding (DPO) without incurring additional debt.

Extend Your Days Payable Outstanding

Days payable outstanding (DPO) is an efficiency ratio that measures how many days, on average, it takes your company to pay back suppliers. It’s a financial ratio that sends an important signal:

A low DPO could mean that a company isn’t fully utilizing its cash position or is operating less than efficiently. Even with good DPO numbers, there have been no capital programs that specifically service the transportation logistics space, which means these organizations miss out on the advantages of additional working capital.

DPO is an important component of financial modeling which could impact valuation, especially when calculating free cash flow to a firm (FCFF) or the impact of changes in net working capital. 

Extending DPO may only be possible with financing and is a measurable benefit of working with a trade finance solution. TraxPays+ Shipper Financing can equip enterprise teams to achieve their internal DPO goals while avoiding negative balance sheets and incurring no extra debt.

Benefits of Our Trade Finance Solution for Supply Chain

There are four key benefits to this trade finance solution for transportation and logistics teams:

  1. Efficiency — Back office frustrations, payment investigations, balance sheets, and operational considerations are all alleviated with safe and easy finance options. Taking advantage of this trade finance solution also reduces complexity in accounts payable processing.

  2. Loyalty — Carrier relationships are more tenuous, and important, than ever. Secure better loyalty with consistently on-time carrier payments, because you have the cash on hand to do it. Bonus: on-time carrier payments can elevate enterprises to a preferred shipper status with carriers.

  3. Security — Maximal security is key to any additional process or step. TraxPays products are secured by AvidXchange, a global leading AP automation solution provider that facilitates billions of transactions for hundreds of thousands of businesses. We operate at one of the highest levels of regulatory compliance, which minimizes risk and maximizes your peace of mind.

  4. Cash flow — Diminish the concerns of cash flow and support your cash management objectives. Fuel business growth, allocating your company’s resources to the right place at the right time to accelerate progress.

A Working Capital Management Program… That Works

Many enterprise businesses already use some form of supply chain finance products to manage working capital. However, according to CEO of Trax Technologies, Hampton Wall, these “leave a long tail of untouched opportunity in the global logistics spend, which is increasing to an average of 6 to 9 percent of Cost of Goods Sold.” He explains further, “We believe TraxPays+ brings great relief for both the global shipper and the carrier with our expansion of their trade finance program.”

Less risk, efficient access and management, and help for companies of all sizes across the supply chain: this is the vision behind TraxPays+ Shipper Financing. Learn more here.