Loadsmart’s perfect 13 minute payments

Loadsmart is a cutting edge Logistics Solutions Provider that set out to do better for their customers with a tech-focused approach. Their rapid growth and expansion meant they continued to offer new services and bring on new teams. While this allowed business to boom, their back office couldn’t keep up. 

Loadsmart needed to find a way to sustainably grow and preserve their working capital. This meant they needed to achieve two goals: increase automation so they didn’t have to scale headcount linearly and find a way to reduce their high DSO. 

Together Loop and Loadsmart have uncovered $1.3M in invoice issues, reduced outsourced resource (BPO) headcount by 60%, and automated 80% of invoice approvals which reduced their DTI to minutes.

But before diving into how, let’s take a look back at Loadsmart before their partnership with Loop.

Before Loop: DSO Bottlenecks

In 2021, Loadsmart expanded their business from brokerage to a freight platform company to drive more value for their customers and brought on LTL as a new mode. This seemed great on the surface, but underneath their legacy workflow locked up working capital and caused internal delays.

Loadsmart had to find a way to identify and eliminate:

1. Trapped capital 
2. Expensive and unnecessary resources
3. Manual workflows
4. Costly errors

Challenge: how to decrease days to invoice

When their team double-clicked on how to reduce DSO they created an internal measure, called days to invoice (DTI), which is a key factor in measuring and improving DSO. 

DSO = DTI + N payment terms

DTI is an important metric because it’s the one part of the DSO equation that the team can improve. However, it’s challenging to optimize DTI because more often than not, carriers don’t meet the customer compliance requirements, causing downstream issues for the 3PL. While the teams work to fill in the gaps, the clock is tick, tick, ticking. 

Legacy technology cannot keep up with the complexity and fragmentations of modern supply chains. Loadsmart’s legacy technology trapped  them in Supply Chain 2.0 with: 

1. Poor document and data management 
2. Manual workflows 
3. Convoluted exception management 

5  days to manually assign documents

Paper problem = limited data. 

98% of their carriers mailed their documents and then their team had to manually input each load into their legacy system with limited automation.  

Loadsmart’s legacy technology categorized documents and only extracted three data points: total invoiced amount, shipper rank numbers, and container numbers. You need at least 8 pieces of data to accurately audit an invoice.

Linking nightmare

Because their system could not link related documents, their team had to manually find and assign docs to a load. The result? Endless searching and scanning through thousands of documents looking for matching reference IDs. Brutal.

Uploading, finding, and linking data and documents took 5 days on average before the team could even start the audit process: first bottleneck for DSO.

Manually review each line item for thousands of shipments

When the audit process finally started, the team had to manually review each line item for thousands of shipments. That’s thousands of shipments that a person is manually reviewing. Thousands!

No one’s brain is exempt from rot after staring and comparing for hours, mistakes are inevitable. But mistakes here mean losing money on the load or running the risk of hurting customer relationships. 

These manual audit processes meant a 48 hour SLA,  and sometimes  an additional 12 hours for exception management: second bottleneck.

4 teams required to manage an exception

Speaking of exception management, if there was a discrepancy found between expected and invoiced costs, Loadsmart’s finance teams didn’t have the context to understand what caused the issue. Since they had  BPOs executing the audit, those resources had to lean on Loadsmart’s internal teams to resolve an issue.

Taking up carrier sales management and account management’s time to resolve issues was an operational nightmare.  It meant multiple calls and emails back and forth with the carriers to get resolution. These teams were bogged down in internal back and forth, instead of focusing on creating better relationships and booking more business.

3PLs can’t afford delays or mistakes. As Jane Cavalacante, Loadsmart’s Senior Product Manager for Financial Operations said, “one incorrect accessorial could be the difference between losing money and making money on a shipment.” 

With zero automation, four teams handling exceptions, and a DSO taking 50% longer than necessary, mistakes will be made and money will be lost. It’s not an if, but a when and how much.

Loadsmart needed a better way

They needed a great partner who could help drive their growth. Jane set off to find a partner that: 

1. Provided software, not a service to improve accuracy
2. Offered full automation to increase efficiency
3. Drove strategic growth as a partner, not a vendor

“We were not looking for a simple provider, we wanted a partner. Loop not only met all of my requirements but they had a complete solution that helps us address all of the foundational pain points. They had a great UI with incredible analytics and they were constantly innovating. They were the partner we were looking for to grow with.”  - Jane Cavalcante, Sr. Product Manager - Financial Operations

Loadsmart’s legacy solution claimed automation, but as we know it wasn’t sufficient for Loadsmart’s needs. Jane didn’t want to be duped again, she wanted true automation. So when Jane found Loop, she pressure tested Loop’s logistics-AI to make sure she made the right decisions on its own. Luckily, Loop did not disappoint. 

After Loop: Invoices paid in 13 min, BPO cost cut by 60% and $1.3M in losses saved

Between our software and account teams Loop helped Loadsmart:

1. Improve data management 
2. Automate workflows 
3. Improve margin
4. Create a more collaborative supply chain

Upleveled data and document management by 10x

Loop’s logistics-AI uplevels data access and quality. Where the Loadsmart team used to spend “countless hours collecting, searching, and finding documents and still not being able to use the un-extracted data.” Now all they do is forward documents to Loop or connect an API. 

Loop categorizes each document, extracts every data point, links all data,  and standardizes it into a consistent and usable structure across carriers,  lanes, services, accessorials, facilities, etc.  Now, with usable and understandable data in one platform, everyone on the Loadsmart team can get complete context on a load. 

“Logistics-AI has upleveled our data and document management by 10x.”  - Jane Cavalcante, Sr. Product Manager - financial operations

The data Loop provides powers automation and unparalleled insights for Loadsmart.

80% of invoices audited and approved automatically

Loop’s logistics-AI automates billing decisions based on Loadsmart’s pre- configured set of rules. If there is an exception, the issue is clearly called out which streamlines resolution. This explainability means four teams are no longer needed to fix an issue, and  it takes one hour to resolve an issue, instead of 12.

With Loop, 80% of invoices are audited and approved automatically with 100% accuracy. The best part? This is just the beginning. Loop’s AI gets more accurate and faster with each data point.  When Loop went live with Loadsmart in Dec 2023, our automation was at 52%.  

Improving margin

Offloading manual workflows has had a huge impact on Loadsmart’s margin. As a result, they’ve been able to reduce BPO costs by 60% and Loop’s line item audit identified $1.3M in inaccurate charges. Loop tracks both over and underpayments. This helps the Loadsmart team understand inaccurate data upstream in their TMS so they can better improve their forecasting. 

Automating workflows and root cause analysis enables Loadsmart to reinvest in growth and innovation. With Loop, they’re not getting bogged down in back office operations, and instead,progressing their mission of delivering cutting edge solutions for every supply chain stakeholder.

Building a collaborative supply chain

Best of all, Loop fixes structural issues. Whether it’s improving carrier compliance for a carrier that always forgets to send receipts or identifying incorrect upstream data. Loadsmart has seen a decrease in invoice issues from 50% to only 9%. 

This demonstrates that Loadsmart is improving carrier performance and strengthening shipper relationships.It’s a win-win-win. 

When carrier compliance increases, carriers get paid faster. Additionally, Loadsmart sends more accurate AR invoices so they’re paid faster. 

Tighter processes and better compliance means less operational overhead and burdens on customers; so they’re happy. This positive feedback loop builds a more collaborative and performant supply chain.

The “Perfect Payment” executed in 13 mins

With Loop’s automation allowing for quick AR turnaround- and by quick we mean on average three hours- Loadsmart can offer quick pay discounts to their carriers. 

For those carriers with Loop’s API integration, the turnaround is even faster. Loadsmart now has “perfect shipments” according to Jane. Where the process from getting an invoice to approval only takes 13 minutes. Let that sink in. In the world of supply chain payments that take weeks or months to execute, 13 minutes is pretty darn close to real time. 

Loop provides the efficiency and accuracy for Loadsmart to be able to unlock new revenue and reduce resource redundancy. Additionally, Loop’s automation allows carrier and customer teams to focus on what matters most, sustainably growing their business. 

Looking forward, Loop sets the foundation for Loadsmart to begin helping all of their stakeholders optimize their outcomes. 

Loop is the best investment for 3PLs

Loop’s logistics-AI uplevels your data, workflows, and teams, empowering you to do more with your business. Leap into Supply Chain 3.0 in months, not years.