NFI's David Broering on How HubTran Helped Them Scale

HubTran was recently featured in the Journal of Commerce. Excerpts are below or you can view the full article here:

Startups, 3PLs improving freight payment efficiency


Alan M. Field, Special Correspondent | Mar 25, 2016 9:28AM EDT

Once dominated by paper documentation and the Excel spreadsheet, invoicing and freight payment is on a relentless march toward electronic data interchange as a new group of autonomous startups and large 3PLs enter the business.

In the U.S., where third-party logistics providers now spend more than $86 billion annually on transportation, most 3PLs provide some sort of automated transportation management system or some electronic means for shippers to pay their freight bills or at least audit their freight bill process, according to Evan Armstrong, president of Wisconsin-based consultant Armstrong & Associates.

NFI Industries was having a difficult time adjusting to its strong growth, according to David Broering, senior vice president of integrated solutions at the Cherry Hill, New Jersey, company. NFI, which manages transportation on its own trucks and those of outside providers, had a mature group of freight bill auditors, who were doing the traditional bursting of envelopes, stamping of paperwork, scanning and batching of paperwork. It was a very manual process,” Broering explained.

The process involved the company’s seven distinct divisions. Each had different needs, and most of them were using different systems. So the interconnectivity of those systems was pretty much impossible. We had 10 auditors who sat in a room together and all audited and batched paperwork. The efficiency level was just not getting it done, he said.

NFI faced an even bigger challenge because its domestic, non-asset business was bursting at the seams. When Broering joined the company in 2012, NFI was moving about 11,000 shipments a year. By 2015, it was moving about 105,000.

This accelerated the need for a much swifter freight bill audit and payment process that related to paying our carriers, Broering said. Our brokerage business is built on the paradigm of servicing our carriers in as efficient and cost-effective manner as possible and providing them with swift and efficient payment for their services. We really understand, because we are also a carrier, what it means to be a carrier and how important cash flow is.

With so much expansion in its shipments, NFI was unable to scale and grow without adding body after body after body. As a self-described “efficiency nut”, Broering thought, there had to be something else out there, he recalls.

So NFI went looking for an outside provider of automated services to process the payments on those 105,000 shipments. We wanted a simpler, more logical way to scan, index and pay carriers, Broering said. He also wanted to be able to scale our business faster and more efficiently; a logical process that was not cost-prohibitive to the business. To do more and pay less.

So NFI chose HubTran, a Chicago-based provider of automated back-office services, including electronic invoicing, auditing and payments. Launched in 2015, HubTran provided us also with a couple of things that were prescient for the present and future world, Broering said. The first thing was eliminating paper altogether, and HubTran helped us motivate our carrier base by creating a system that works fast with e-mail invoices for the carriers services. Now we are getting 90 percent less paper than we were getting six months ago. This is a huge benefit, Broering said.

Among independent standalone providers of such services, Armstrong singles out two neat applications as especially innovative: HubTran and PayCargo. Armstrong describes newcomer HubTran as essentially a bolt-on application for transportation management applications. Geared toward domestic transportation managers and freight brokers, HubTran allows carriers to fax their freight bills, and then does an optical character recognition process on the bills, and employs machine learning technology to fine-tune its effectiveness over time.

This technology pulls the information out of the documents. HubTran CEO Matt Bernstein explained. It recognizes a document, for example, as a bill of lading, and it groups the documents appropriately. It then assigns a load to each group of documents. It confirms and submits the invoice, and validates the documents by matching it against the contracted rate for the shipment. He added that this workflow platform reduces a lot of manual documents. All these documents are associated with the load number and the carrier invoice number forever.

Bernstein explained that there are two sets of HubTran users — freight brokers and 3PLs, on the one hand, and transportation factoring companies, on the other.

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