AI in Supply Chain: Optimizing the Broker Back Office with Supply Chain Artificial Intelligence

The role of artificial intelligence in freight broker back offices is expanding rapidly. In fact, Upwell co-founder and CEO Charley Dehoney believes that within the next 10 years, at least 65% of the logistics and transportation industry will have transitioned to accounts receivable automation.

“There’s not going to be teams of humans in North America sitting there taking information off of documents and punching it into systems and doing a bunch of manual calculations,” Dehoney said on “The Logistics of Logistics” podcast.

But Upwell isn’t waiting for the next decade. Today, Upwell is at the forefront of supply chain AI, providing freight brokers, freight forwarders, trucking companies, and steamship lines with an automated invoice-to-income platform that helps parties within the supply chain get paid faster.  

Supply Chain AI: A New Frontier in Transportation Optimization

Tech consultant Bart De Muynck wrote that the logistics industry “has been undergoing a profound transformation these past few years, driven by industry disruptions and the rise of cutting-edge technologies. AI’s ability to process vast amounts of data, to make intelligent decisions and to predict outcomes has made it an increasingly important tool in the logistics sector.”

The integration of AI and robotics has led to significant advancement in warehouse automation, De Muynck said. “This creates an abundance of new, real-time data in the warehouse that can be used for predictive analytics and improved controls of the warehouse processes.”

But transportation and logistics companies have been slower to adopt AI, he said, suggesting the use of the term “augmented intelligence” to understand the benefits that are possible.

“AI does not replace but rather helps humans to be more efficient, handle more volume, do their jobs faster, and have better quality outcomes,” De Muynck said.

That’s exactly what Upwell is doing for transportation and logistics companies.

“We’re sitting in that kind of data highway of invoice data and payment data that’s coming back to the freight broker or the trucking company or the steamship line or the freight forwarder, and what we’re doing is we’re helping get the invoices to the customer faster, and then once that payment comes through, we’re helping them apply the cash and understand where that payment should go, where it came in from, and ultimately just automating a lot of these steps where humans are doing it today by leveraging AI and large language models,” Dehoney said.

As AI Transforms the Supply Chain, Innovators Turn to the Broker Back Office

Dehoney understood that transportation and logistics companies have been slower in adopting AI and co-founded Upwell to help them automate their back offices.

“Every business is in a different place in their digital journey. We have to meet these customers where they are,” he said.

“There are other big companies out there automating accounts receivable for other companies in other verticals and industries, but our industry has been neglected by this particular piece of technology because of the shipper requirements, because of the complexities around accessorials and those dependencies on certain documents to support accessorials. And all of that complexity is what makes Upwell unique and different and why we’re the right company to come in and solve this problem at this time,” Dehoney said.

“The real impact on these businesses is if we can help our customers reduce their daily sales outstanding by a couple of percentage points – or even a couple of basis points – that’s a material amount of money that’s sitting in our customers’ accounts (that are) generally spread out in all of their customers’ accounts,” he continued, explaining that money then can be used as working capital.

“We’re helping people use their own capital to grow, and in this inflationary time and this freight recession, there’s never been a better time to take a look at your back office.”

Transforming the Broker Back Office with Supply Chain AI: Three Benefits

Dehoney said Upwell is taking “an AI-driven approach” to transform the back offices of freight brokerages and transportation companies.

“We’ve broken down the entire process from generating an invoice, getting it to a customer, tracking it, keeping the customer informed with customer statements, past due reminders, and then helping them get the payment over through ACH or credit card” and applying that cash in the appropriate place, he said. “And as we broke all of those steps of the process down, what we’ve done is we’ve built products leveraging AI to replace the human validation of these different steps and these different parameters.”

Among the many benefits for Upwell’s customers are improved cash flow, the automation of legacy processes, and enhanced customer experience.

Improved Cash Flow

“By automating the statements and automating the past due reminders, making it easier for the customer to click to pay online, we’re helping get that money in faster,” Dehoney said.

Getting cash in the door faster begins with delivering freight invoices in a customer’s preferred format.

“We’ve got all these tools to get them the invoice in whatever format – they need that Excel spreadsheet that’s a more of a statement view of the bill or they need that one field that doesn’t live in the TMS, that person is exporting the data and creating the custom invoice. We’re taking over all of that because these invoicing rules are very powerful and we can deliver the invoice in the way that they need to see it,” Dehoney said.  

“What we’re aiming to do is help companies access the most efficient source of capital and the most cost-effective source of capital in this recession, which is their own profits. Most companies have thousands of dollars if not hundreds of thousands or millions of dollars, sitting out there in their customers’ accounts that’s past due that should justifiably be sitting in the broker’s or carrier’s account,” he said, explaining that Upwell is “helping those companies claw back that money and get that money in the door faster.”

Automated Legacy Processes

For freight brokerages and transportation companies, invoicing can be a tedious, time-consuming process, even when they’re sending an invoice to a customer who uses an online portal.

Dehoney said these freight invoices must be “accurate, thorough, and complete with all the accouterments – the reference numbers, the PO, the supporting documents, the bill of lading, the stamp, the signature. All of that needs to be validated by a human, put up into one of these portals, or sent to a specific email address so it can be read using AI and automation and it can be marked OK to pay.”

Upwell’s CEO estimates at least 25% of freight invoices get paid late. “Where we are really aggressively helping companies is with that 25% – and in some cases even more – of invoices that aren’t accurate, thorough, and complete – that have some discrepancy, whether it’s a rating issue, a fuel surcharge application issue, it’s a missing purchase order number, it’s a missing reference, it’s a missed bill of lading, it doesn’t have the signature on the stamp.

“When one of those parameters is not met, then that shipment will not be approved and marked OK to pay in their automation. It goes into an exception queue. And what we find when we bring on a new customer is they, most of the time, have tens of thousands of dollars, if not hundreds of thousands or millions of dollars, tied up in exceptions. And sometimes they don’t even know about those exceptions. So we’re helping bring that data back to the users to fix those invoices … and get them paid faster,” Dehoney said.

Enhanced Customer Experience

Customers are happy with Upwell because their customers are happy with the automated invoicing and payment process.

“If Walmart or Target or Niagara Bottling puts you on time-out because your billing is messed up, it’s really hard to overcome,” Dehoney said, asserting that business leaders know “that’s one of the hardest parts of the relationship to fix – the financial part – once it’s been broken.”

Upwell starts “driving value the first day of implementation,” he said, sharing the story of a recent new customer, a top 50 freight broker.  

“We had the kickoff call on Monday afternoon. We had that freight broker start to enter in usernames and passwords from some of the large shipper accounts payable portals that they’re using,” Dehoney said, explaining that as soon as the credentials were entered, “immediately our system started bringing in their historical data, their existing and incoming invoices and we started to automate the process of uploading invoices into that portal that same day, saving that team well over two hours a day in just manual work – just automatically that day.”

Upwell: Bringing Artificial Intelligence to the Back Office

Upwell customers are realizing a 50% operational expense decrease per employee, a four-day drop in daily sales outstanding, and a 10% increase in cash flow.

For example, by harnessing the power of AI and large language models, Upwell can present its customers with invoice exemption data on every account and highlight which invoices are slipping past due.

“What we’re building is the middleware application that integrates all your existing tools to superpower the operations you are already using today. There are some TMSes that really struggle with some parts of billing and collections, and we can just superpower those TMSes. Still other TMSes just dump all the data into a general ledger system like QuickBooks, NetSuite, Sage, Oracle, and we can integrate with all of those,” Dehoney said.

Get an Upwell demo today to see what AI can do for your back office.

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