TL;DR

In logistics, Shippers (e.g. Nike) do not pay their invoices on time, because invoices (from Fedex) are wrong 40% of the times. Root-causing (auditing) the invoice takes months of manual human effort, and LogisticsCo borrow ~ $440bn @ 20% APR to finance the delayed payments. LLMs may be used to reduce the effort and errors, BUT ALSO collect richer data to under-write better loans at a lower APR.

Problems

In logistics, customers rarely pay vendors on time or don’t pay the right amount (and sometimes don’t pay at all).

(imagine not getting paid your salary consistently, and the right amount each time!)

This is because the Quotes by LogisticsCo does not match the Final Invoice from LogisticsCo.

Quote example : FedEx provides a quote for moving flowers for 1-800-Flowers

Invoice example: Fedex’s invoice to 1-800-Flower after the job is done

Driver had to drive 100 miles (delta) more to avoid steep hills in SF. | | Basic | Rush Fee | $600 | OK - approval was received via email | | Basic | extra heavy load | $400 | 1-800-Flower didn’t provide the weight. | | Accessorial | Detention fees for waiting at home-depot for 3 hrs for cargo | $180 | Home depot’s delay - busy day at their warehouse | | | Total | $1,730 | Delta = $730 |

There is a DIFFERENCE. This is an excuse NOT TO PAY.

<aside> 💡 Components of an Invoice:

• Contract specific like freight rates between cities, fuel, distance traveled, discounts, delivery guarantees, insurance. Negotiated for each customer
• Basic charges like forklift fees, gate fees.
• Accessorial charges like inside pickup fees, forklife usage fees, wait time fees, protection from freezing fees, and weight and inspection fees. </aside>

This is a BIG problem

When customers don’t pay, or pay late, it freezes cash-flow for FedEx.

At scale, $millions are unpaid.