The supply chain is about more than moving boxes between countries, and the current global crisis is about more than just capacity and driver shortages.

International trade requires stakeholders to deal with dozens of vendors and their accompanying challenges, including moving and storing goods, clearing customs, dealing with multiple legal jurisdictions and currencies, paying and getting paid across borders, and fleet financing. Players in the industry are often cash-constrained because capital can be tied up for months as product moves through the supply chain. By deploying financial services technology at each stage of the journey, companies can speed up access to working capital.

Coined by NFX, fintech-enabled marketplaces are those “with tech-enabled financial services built directly into the platform.” In general, marketplaces are a means of solving specific needs within a niche or industry. When applied to the supply chain, they remove the complexities of dealing with multiple vendors, since all relevant services are delivered via a single platform. According to DealRoom, this type of marketplace has an enterprise value-to-sales (EV/sales) ratio of 6.7x, compared with 5.3x and 4.6x for other marketplaces and financial services, respectively.

Marketplaces create a “virtuous cycle.” Companies can use them to find suppliers to help move their goods internationally. More demand brings more suppliers interested in new business, and a broader base of suppliers means more clients are able to find the right match for their needs. Better matching between demand and supply means a higher quality of service for both sides of the marketplace. Through improved access to critical payment infrastructure and capital, small and large companies alike can compete and grow on their own terms.

Suppliers, for their part, can increase their roster of customers. By obtaining deeper insights into customers’ needs, they’re able to provide more solutions, and customers in turn become more willing to share valuable information. The data layer for financial products aids in making better business decisions. What’s more, fintech-enabled marketplaces offer a better customer experience, because more of their pain points are being addressed in a single interaction.

By allowing companies to focus on what they’re good at, while someone else takes responsibility for moving the cargo, they’re able to develop a more competitive edge. Otherwise, they would need to hire a person to manage each vendor they work with, and for each function around logistics. Instead, small to medium-sized businesses can invest their limited capital in technology and processes that enable growth, without having to wait for payment cycles of two to three times a year.

It's not enough to have an efficient supply chain. Applying fintech to the process spurs growth for all parties involved in the process. More than a tool for solving immediate issues relating to the movement of goods, it opens the door to real business transformation throughout the supply chain. Fintech-enabled marketplaces allow companies of all sizes to scale and prosper over the long run.

Luis Torres Robles is head of finance and business operations at Nuvocargo.