Why fintech is the next supply chain frontier
Embedded Financial Services: What it takes to prosper in the new value chain
Top 5 Financial Challenges in the Transportation Industry | Pinnacle Business Solutions
The trucking industry in the US-Mexico region, and in the Latin American region as a whole, is severely underserved by both traditional financial institutions and generalist fintechs – creating significant opportunities for specialized companies like TrackChain.
Market Opportunity Analysis
- Market Size and Growth:
- Bilateral trade between the U.S. and Mexico reached $779.3 billion in 2022, with an annual growth of 17.4%.
- 70% of this trade is transported by road, representing a transport market of approximately $545.5 billion.
- Financial services related to this sector are estimated to represent 3-5% of this value, indicating a potential market of $16.4-$27.3 billion annually.
- Current Financial Challenges:
- Limited credit access: Over 60% of SMEs in Mexico's transport sector lack access to formal financing.
- Cross-border payment inefficiencies: Average settlement times exceed 3-5 business days, impacting cash flow.
- Exchange rate risk management: USD/MXN exchange rate fluctuations significantly affect operating margins.
- Delayed freight invoice payments: Carriers often face extended wait times of 30-60 days or more for payment on completed deliveries, severely straining their working capital and operational stability.
- Current Market Landscape:
- The majority of financial solutions in the region are either traditional or from generalist fintechs not specifically focused on the transportation sector.
- Only one fintech solution (Solvento) is currently focused on the trucking industry, but it lacks the end-to-end ecosystem that TrackChain offers.
- Other solutions in the market, such as Finkargo, Nowports, Nuvocargo, Mundi, and DripCapital, are primarily focused on trade finance for import/export operations and insurance for client merchandise.
- TrackChain plans to develop financial solutions specifically for the trucking ecosystem, bridging the gap between shippers and carriers.
- TrackChain's unique advantage lies in leveraging its network of assets such as carriers, trucks, trailers, and drivers to create products tailored to the Trucking sector.
- While the existing competitor in the trucking fintech space has made inroads, it doesn't have the advantage of a captive shipper and carrier base within a comprehensive transport management ecosystem, limiting its ability to capture the full end-to-end flow of operations and data.