Capturing Billing Issues With a Sophisticated Freight Audit Engine

In a world of increasing shipping costs and greater customer expectations, shippers can hardly risk the additional costs associated with payment discrepancies and inefficiencies.Shipping costs have increased across the board over the last few years for a variety of reasons, including:

1. Higher demand on supply chains as a result of greater reliance on online shopping by consumers
2. Significantly decreased supply of drivers as a result of greater demand for shipping
3. Tarrifs and potential trade wars
4. Greater expectations of consumers for shipping options such as same-day and next-day delivery

As the demand on shipping continues to rise - and there's little indication that it will decrease any time soon - billing issues and discrepancies will increasingly pose greater risks to shippers.However, it can also be seen as an opportunity to create a competitive advantage.With a sophisticated freight audit solution, shippers can more easily mitigate the risks of errors and streamline their shipping operations. This will inevitably benefit the bottom line and enable businesses to compete in an age when companies like Amazon are completely changing the shipping landscape.In a recent article on JOC.com, Hannah Testani, COO of Intelligent Audit, outlined why shippers need a robust, sophisticated freight audit solution for dealing with these types of billing issues.Drilling down into these issues, Hannah highlights that "ocean freight tends to have a higher percentage of errors than other modes, sometimes the root cause is as simple as incorrect or missing data sent from the carrier — for instance, a 20-foot container billed at the 40-foot rate, or incorrect or no destination port."According to Hannah, the reasons for shipping issues can be varied, with potential root causes including:

1. Incorrect or missing data sent from the carrier
2. Frequent contract changes based on large volumes, seasonality, or port congestion

Regardless of the root cause of particular shipping issues, a robust, sophisticated, and technology-based freight audit engine is required.

Automate or Die

With so many moving parts within shipping, not having an automated process for monitoring every single charge makes effectively identifying areas for improvement and inefficiency becomes nearly impossible.Shippers with large footprints and shipping spend are, particularly at risk. With so much shipping activity going on, and such a large and often spread out footprint, it becomes nearly impossible to keep track of potential shipping issues.If, for example, a shipper that is constantly dealing with demurrage at a particular port without having the data to know that they have other options.

Robust Payment and Audit System is Key

Having a freight payment and audit system, one that is robust and technologically advanced, is the best solution for shippers to increase efficiency and decrease overall shipping costs.

1. Carrier Performance Metrics
2. Transit Time
3. Shipping Lanes
4. Ports
5. Shipping Spend

Each one of these, with the right technological solution, can be analyzed all the way down to the individual accessorial billed. In terms of saving time for budgeting or negotiating carrier contracts, this is a fantastic opportunity.A true freight audit partner should enable shippers to:

• Audit & manage a comprehensive, automated invoice audit of every transaction down to the charge-level, including a best-in-breed contractual audit
• Achieve complete transportation visibility across all regions and modes for logistics & finance teams
• Accurately allocate transportation cost down to SKU-level
• Understand true financial exposure with detailed weekly accruals for unbilled shipments
• Capture and action active carrier delivery exceptions and understand controllable vs uncontrollable issues
• Provide insight into budgeted vs. audited landed costs
• Leverage data to drive meaningful transportation spend reduction