The Cash Flow Crunch No One Talks About in Indian Logistics

India’s freight forwarding community plays a crucial role in keeping the country’s trade ecosystem moving. They coordinate shipments, manage customs, handle documentation, navigate port processes, and ensure cargo moves on time across borders. But behind this seamless movement lies a challenge that the industry rarely talks loudly about: delayed payments and the constant struggle for working capital.

 

 

The Cash Flow Problem No One Sees

 

For most Indian freight forwarders, payments from customers arrive much later than payments they need to make. While receivables often take 30–90 days (sometimes more), operational payments—port charges, shipping line invoices, container deposits, transport costs—must be made immediately.

 

This creates a daily cash flow imbalance that leads to:

 

1. Funds blocked in receivables
2. Pressure on overdrafts and credit lines
3. Forced delays in paying shipping lines or ports
4. Penalties due to delayed DO release
5. Inability to handle more shipments despite market demand

 

Even a mid-sized forwarder can have ₹50 lakh to ₹2 crore stuck at any point. For smaller players, one delayed payment can bring operations to a standstill.

 

 

Funding Options in India: Available but Often Out of Reach

 

While various financing mechanisms exist, most are not designed for the realities of shipping and freight forwarding. Forwarders deal with multiple stakeholders—shipping lines, ports, customs, transporters—and the cash flow demands are immediate and recurring.

 

1. Bank Overdrafts

Widely used by freight forwarders to cover shipping line invoices, port fees, and container deposits. Requires collateral and comes with high interest, especially challenging for MSME forwarders.

 

2. Working Capital Loans

Useful for bulk cargo handling or seasonal spikes, but approval is slow, heavily documented, and often inaccessible for small or asset-light forwarders.

 

3. Invoice Discounting / TReDS

Can unlock cash tied in export/import invoices or freight bills, but only works if the customer or shipping line qualifies for discounting—which is often not the case for smaller clients.

 

4. NBFC Loans

Faster approvals with less paperwork, helpful for urgent payments to shipping lines or port authorities, but interest rates are higher than traditional bank loans.

 

5. Fintech Supply Chain Financing

Emerging options allow digital settlement of freight charges and customs payments. Adoption is limited due to fragmented receivables and inconsistent payment patterns in the shipping ecosystem.

 

6. Internal or Informal Funding

Many forwarders rely on personal funds, partner loans, or informal credit to pay shipping lines, clear containers, or manage trucking charges. Quick but risky and unsustainable for growth.

 

Even with these options, freight forwarders continue to struggle with stretched liquidity because funding solutions are reactive, not integrated into the day-to-day cash flow requirements of moving cargo.

 

 

Where the Real Bottleneck Lies: Payment Processes Themselves

 

A lesser-discussed reality is that even when forwarders do have funds, traditional payment processes slow them down:

1. Manual uploads
2. Delayed confirmation from shipping lines
3. Lack of real-time visibility
4. Follow-ups just to verify payment status
5. Delays in DO/BL release due to payment verification gaps

 

This operational friction keeps money “stuck in transit,” worsening an already tight working capital cycle.

 

 

How Digital Platforms Are Helping Ease the Pressure

 

In recent years, India’s logistics ecosystem has seen a shift toward digital solutions—especially in documentation and payments. Platforms like ODeX have quietly played a key role in reducing friction around payments and financial workflows for forwarders.

 

By enabling:

1. Instant payments to shipping lines and ports
2. Real-time confirmation and status visibility
3. Faster DO and BL release
4. Consolidated dashboards for receivables and payables
5. Reduced manual errors and repetitive follow-ups

 

…digital platforms help forwarders free up working capital simply by speeding up the movement of money—not by borrowing more of it.

For many FFs, this faster cycle is often more beneficial than taking additional loans or tapping credit lines.

 

 

Why Payment Speed Is Becoming a Competitive Advantage

 

As India pushes to scale its EXIM volumes, freight forwarders who operate with predictable cash flow and faster financial cycles will be better positioned to:

1. Handle more shipments
2. Reduce credit dependence
3. Avoid penalties
4. Pay vendors on time
5. Improve customer service
6. Strengthen relationships with shipping lines and ports

 

In a world where cargo moves in hours but payments often move in days, the forwarders who digitize their financial workflows will gain a significant edge.

 

 

The Road Ahead

 

The logistics sector doesn’t just need more funding—it needs faster financial workflows and smarter cash flow visibility built directly into daily operations. As more Indian freight forwarders adopt integrated digital solutions, the industry will gradually shift toward a healthier, more predictable working capital cycle.

 

Timely payments aren’t just about speed—they’re about survival. And for India’s freight forwarders, improving the payment journey may be the most important step in keeping trade moving.