Navix Drives 3PL Back-Office Automation for Increased Efficiency and Profitability
Minneapolis, MN USA Site Visit
July 30, 2024
By Evan Armstrong & Cheri Grabowski
Key Personnel
Eric Krueger, Co-Founder and Chief Executive Officer
Wil Kratz, Vice President, Solution Architecture and Implementation
Navix Overview
Navix focuses on Intelligent Document Processing (IDP) and dynamic business rules to drive automated freight audit solutions for third-party logistics (3PL) providers. The platform automates back-office processes for freight brokers and 3PLs managing full truckload (TL) and less-than-truckload (LTL), as well as invoice processing for warehousing, drayage, intermodal, and cross-border services. Navix was incorporated in June 2021 and has raised $10M in capital since March 2023.
Co-Founder and Chief Executive Officer Eric Krueger has over 15 years of experience creating software and technology services across multiple industries with a focus on Software-as-a-Service (SaaS) technology and SaaS networks within the supply chain. Wil Kratz, Vice President of Solution Architecture and Implementation, brings over 25 years of experience with LTL freight audit, 3PL, and freight technology. Together, they have built a rapidly growing team dedicated to updating and simplifying complex and costly back-office processes.
To date, Navix has integrated with over 16 Transportation Management System (TMS) providers, including MercuryGate, Aljex, Tai Software, McLeod, Revenova, and Turvo. With its open API endpoints, Navix also integrates with proprietary TMS platforms, allowing for flexible and customizable solutions.
Navix’s client base includes customers such as Echo Global Logistics, Armstrong Transport Group, R&R Express, Axle Logistics, Buchanan Rigging and Hauling, Steam Logistics, Evans Transportation, Veritas Logistics, and Running Ox Logistics. While most of its customers use it for truckload freight audit and payment, many utilize the platform for its ability to handle transactional and Managed Transportation LTL shipments. The system works directly with LTL carriers and interfaces with client rating engines and SMC3 and project44. This functionality allows 3PLs to offer additional services to customers, increasing its value and developing more strategic customer relationships.
In 2023, Navix processed a total of 4,470,388 bills with its platform and is on track to double that figure by the end of 2024.
Understanding Days Sales Outstanding and its Impact on a 3PL Provider
For 3PLs, Days Sales Outstanding (DSO), the number of days it takes to collect customer payments, is important to the bottom line. A low DSO indicates prompt customer payments and is positive for cash flow, which helps reduce operating expenses, increase working capital, and improve growth without increasing headcount.
A high DSO indicates delayed/slowed payments, negatively impacting cash flow. An elevated DSO can be created from delays in generating or sending invoices, suspended invoices due to billing errors or missing information, highly manual document collection and audit processes, and individuals spending days to track down missing information or documentation.
Navix is a SaaS platform that automates and overcomes these delays and errors with artificial intelligence-driven actions, analytics, and machine learning.
Navix’s Model
The Navix platform is a fixed-price subscription model based on the number of freight bills processed each month, making it a scalable tool for 3PL providers of all sizes. This includes billing for truckload and LTL freight, and invoice processing for warehousing, drayage, intermodal, and other services.
Navix does not monetize via gain-share. Navix focuses on creating a predictable model that drives the appropriate incentives to maximize efficiency for the 3PL, customer, and carrier partners.
Navix’s Dashboard View with Real-Time Analytics and Insights
Navix has a straightforward, easy-to-view dashboard that provides valuable data such as invoice and dispute counts and average days to dispute. It also shows which carriers are producing the most disputes and the common reasons for doing so. Customers can also evaluate how shippers are performing by capturing the appropriate dimensions and locations that frequently have detention. The dashboard view gives the 3PL provider real-time analytics and a conversation tool to have with business partners.
How Navix Works
Navix intakes and reviews documentation through API, EDI, and email. These documents are passed through its Intelligent Document Processing (IDP), and then Machine Learning (ML) is applied to categorize and extract data. Vendor documents are then automatically matched and compared to TMS orders.
Navix intuitively manages customer-specific requirements for ratings and required documents. The system has line-item level validation and can automatically compare billed charges to agreed-to pricing as well as contracted rates for fuel surcharges, linehaul rates, accessorials, and handling charges – all on an individual basis while checking for accuracy.
Programmable rules can be added and adjusted for specific partners or for any time-related parameters. A few basic examples of business rules are noted below.
- The order customer does not match the shipment customer.
- The Bill of Lading is missing a signature.
- Ship dates are greater than the delivery date.
- Invalid Canada postal code.
- Weight is missing.
- Missing document type – Bill of Lading for at least one stop.
- No invoice attached.
- SAIA inspection certificate – Verify charges are removed.
- Vendor net charge is not within order net charge tolerance.
- Duplicate invoice found.
In the auditing screen, 3PLs can view the vendor details, noted exceptions, and the shipment information at a line-item level.
Duplicate Supplemental Process
If vendors submit more than one invoice, it will get flagged during the duplicate supplemental process.
Pragmatic Dispute Process
Using Navix for dispute processing is easy to manage. It utilizes a simple drop-down menu with configurable reason codes and types. When using the dispute process, it automatically communicates to the carrier through numerous communication points at once: TMS, Slack, SMS, etc. The communication and resolution are captured directly within the platform and a user has no need to go back to their email. Reason codes can be filtered to quickly find dispute correlations before they add up to bigger problems.
Customer Case Studies
Evans Transportation
Evans Transportation was faced with managing larger transportation volumes while facing labor shortages. The Wisconsin-based 3PL provider also faced invoice processing bottlenecks that resulted in an order-to-cash cycle of over 20 days, negatively impacting its cash flow. To keep up with the increased volumes, Evans had to assign more personnel to invoice processing. These issues drove a state of tactical decision-making versus focusing on strategic opportunities. Since partnering with Navix, Evans automated its invoicing process and reduced its order-to-cash cycle to under seven days without adding overhead. This helped to fuel a ten-times profitability increase over two years.
Armstrong Transport Group
Armstrong Transport Group, based in North Carolina, started an LTL division to meet the additional service needs of its transportation management customers. Armstrong, however, needed to improve its existing back-office process, which was built for truckload transportation management and could not support LTL. Armstrong leveraged Navix’s technology to automate its LTL business unit’s freight auditing and invoicing functions. This led to a decrease in past-due accounts and more processed invoices without needing to hire additional accounts receivable specialists. Load volume increased seven times over 18 months.
Veritas Logistics
Founded in 2020, Veritas Logistics is a growing Ohio-based 3PL. Each new customer brought on increased demand for processing invoices and collecting payments. This caused six to eight hours of daily work per person and meant less time for generating new business. Veritas implemented Navix freight invoice auditing software to streamline the accounts receivable process and improve the cash conversion cycle. This led to a 20% drop in accounts receivables, which were over 30 days past due. The automation saved 20-25 hours per week on the manual processing of invoices. With the automation, Veritas’ load count increased four times without the need to hire additional accounts receivable specialists.
Summary
Navix is a trusted freight audit and payment invoice-processing platform that automates the back-office and enables better customer and carrier satisfaction and performance. It can be challenging for 3PL providers to perform a root cause analysis on bills that hit specific thresholds. By automating the process, Navix helps 3PLs quickly view accounts receivable and payable data and manage disputes while speeding up the cash cycle and driving increased profitability.
Sources: A&A Primary Research, https://www.Navix.io