A unit of Citigroup has partnered with supply chain technology company GT Nexus to offer electronic invoice payment and presentment (EIPP) services to the ocean freight industry, the companies said.
Electronic payment and presentment services are relatively common in the international air-freight industry, with billions of dollars in transactions handled each year. However, electronic payment programs are virtually unheard of in the much-larger ocean freight sector.
Citi's Global Transaction Services unit has been electronically processing air-cargo invoices for years. Brené Flynn, global logistics senior head for GTS, said in a statement that the company is "looking to modify this existing solution and make similar strides in the ocean space." The move into ocean services is part of Citi's strategy to develop what Flynn called a "global EIPP offering."
Greg Kefer, director of corporate marketing for Oakland, Calif.-based GT Nexus, says he's unaware of any financial institutions offering electronic payment and presentment services supporting the ocean freight supply chain. Based on his company's due diligence with Citi, he says, this appears to be "an untapped market opportunity."
Advocates of electronic payment and presentment say the process eliminates the inefficiencies and errors associated with processing paper invoices. An automated solution reduces days sales outstanding, improves cash flow, and reduces—if not eliminates—the risk of human error, they say.