EKA Logistics Capital part of ‘vision to democratize freight management’
Grace SharkeyThursday, December 2, 2021
Digital freight management platform provider EKA Solutions announced Monday it has formed EKA Logistics Capital LLC, a wholly owned subsidiary that will provide working capital financial services to its carriers, brokers and eventually its shippers.
The financial program, set to begin in January, is designed to give EKA a competitive solution to the industry’s factoring companies and create a full ecosystem of freight management tools within the EKA Omni-TMS platform.
“This is a logical next evolutionary step for EKA to realize its original vision to democratize freight management by providing a dual and seamless connected end-to-end ‘best-in-class’ digital platform, for freight management and key services respectively, to help smaller carriers, brokers and shippers to effectively compete with their larger competitors,” said JJ Singh, CEO of EKA Solutions.
While Singh did not disclose specific fees for these services, he did describe them as “highly competitive” to those charged by some of the largest factoring companies, often averaging around 2% to 5%.
Singh explained that EKA can charge lower fees because of the optimization and risk tools the company will be using to make the financial decisions.
“We can accomplish this as EKA provides a touchless and highly intelligent end-to-end platform with work processes that help deliver lowest customer cost to serve coupled with tools that help manage fraud and credit risk at the lowest levels possible,” said Singh.
Unlike many factoring companies that force carriers and brokers to only use a single factoring platform, there will be no constraints through EKA Logistics Capital, Singh said. EKA will offer its services in one of three ways — receivable financing of an entire customer receivable portfolio, select shipper receivables or on a single shipper invoice basis.
Over time EKA plans to open its platform to other factoring services as well, democratizing the way its customers use its freight management platforms.
“EKA expects, sometime in 2022, to make available [our] transformational financial services ‘Open-Loop’ platform for other factoring companies to use to service their factoring customers to transform services delivery, fraud and credit risk management practices and, hopefully, share cost and risk management savings with small to medium-sized businesses,” said Singh.