Revolutionizing Freight Payments: How Blockchain Technology is Reducing Costs and Speeding Up Settlements

Freight invoice factoring has long been a cumbersome and expensive process for truckers and transportation companies, particularly in North America. With payment terms extending anywhere from 30 to 180 days, many companies have been forced to rely on factoring firms, giving up a significant portion of their revenue in exchange for faster payments. However, a groundbreaking solution is emerging, powered by blockchain technology, that promises to transform the freight industry by offering faster, cheaper, and more transparent settlement options.

The Problem with Traditional Freight Invoice Factoring

For many transportation companies, waiting months to receive payment for completed jobs is a harsh reality. Trucking businesses often face the added burden of high operating costs and lengthy payment delays, which can strain cash flow and hinder business operations. To overcome these challenges, companies have historically turned to freight factoring—selling their outstanding invoices to factoring companies in exchange for quick cash. However, this comes at a steep cost, with companies often surrendering 30% or more of their revenue just to get paid in a timely manner.

Blockchain-Powered Freight Settlement: A Game Changer

TCS Blockchain, a leading trade finance and blockchain-as-a-service (BaaS) company, is revolutionizing the freight sector by using blockchain technology to enable faster and cheaper invoice settlements. TCS’s blockchain solution allows transportation companies to settle freight invoices in just one or two business days—at a fraction of the cost compared to traditional factoring. In fact, the company claims that their on-chain settlement process is up to 90% cheaper than conventional factoring methods.

In 2022, TCS made history by completing the world’s first on-chain freight invoice settlement. Since then, the company has continued to save transportation companies hundreds of dollars per invoice, providing them with faster liquidity without the need for expensive intermediaries.

Beyond cost and speed, TCS places a strong emphasis on user experience. Unlike traditional factoring companies, which often require carriers to sign rigid contracts with long-term commitments, personal guarantees, and cross-collateral, TCS offers complete flexibility. Users can choose to settle a single invoice or all future invoices, making the process more adaptable and user-friendly.

Tokenization: The Future of Freight Finance

In March 2025, TCS took a major step forward by listing its TCS Token on INX, a fully regulated and licensed centralized exchange (CEX) in the United States. This move highlights the growing importance of tokenization in solving real-world problems in legacy industries, particularly within the transportation sector.

According to Michael Moro, Chief Strategy Officer at INX, the TCS Token listing on their platform is an example of how tokenization can address longstanding issues in transportation finance. For decades, freight companies have been forced to rely on factoring companies to avoid long pay terms, often giving up a significant portion of their revenue to do so. Now, with the ability to settle invoices using the TCS Token, freight companies can convert their tokens into US dollars in just a few clicks.

The TCS Token is designed as a utility token to facilitate faster, cheaper trade finance for transportation users, rather than as a speculative asset. This focus on practicality makes the token an integral part of TCS’s vision for transforming the freight settlement process.

Blockchain Enhances Transparency and Reduces Fraud

One of the key advantages of blockchain technology is its ability to provide verifiable and immutable records of transactions, making the entire settlement process more transparent. TCS’s blockchain solution not only accelerates the settlement of invoices but also ensures that all stakeholders in the supply chain have access to transparent transaction records.

Furthermore, blockchain technology can help combat fraud—a major issue in the transportation industry. Bob Ejodame, Vice President of Capital Markets at INX, highlights how blockchain’s ability to verify wallet addresses and geolocate users can help detect fraudulent activities. For instance, if a new carrier attempts to onboard with TCS and their wallet geolocates to an unexpected location, such as North Korea, the system will flag the activity as suspicious and terminate the onboarding process.

Solving Supply Chain Capital Issues: The Satoshi Thesis Applied

TCS’s solution is not just about speeding up payments or reducing costs; it’s also about addressing one of the biggest challenges in North American supply chains: the cost of capital. The TCS model is based on the "Satoshi Thesis"—applying blockchain principles to solve real-world problems in traditional industries. This approach has already attracted significant demand, with a freight invoice pipeline exceeding $150 million. As TCS scales its operations, this figure is expected to grow, especially with the upcoming launch at the Mid-America Truck Show on March 29, 2025, one of the world’s largest trucking events.

By leveraging blockchain for invoice settlement, TCS is also tackling a massive problem in the supply chain industry: fraud. The U.S. transportation sector loses billions of dollars each year to fraudulent activities, but blockchain’s secure and transparent nature allows TCS to identify and prevent fraud before it occurs.

The Road Ahead: A Shift in Freight Trade Finance

While traditional factoring companies still dominate the freight finance market, blockchain-powered solutions like TCS are poised to reshape the industry. The transportation sector has already embraced blockchain for track-and-trace solutions, and invoice settlement is the logical next step. As blockchain technology continues to prove its value, it’s only a matter of time before it becomes the standard for freight invoice settlement.

With the potential to significantly reduce costs, improve liquidity, and enhance transparency, blockchain-based freight settlement is set to transform global supply chains. TCS is leading the charge, and with their innovative solution, the future of freight payments looks faster, cheaper, and more efficient than ever before.