Freight Audit and Payment Services: Stacking Up Savings

"More multinational companies are looking for a single-source supplier that can process and pay invoices on a worldwide scale, and give a single global data warehouse from which to analyze their distribution chain," says Keith Snavely, senior vice president, sales and promotion, for nVision Global, a McDonough, Ga.-based supplier of global freight audit, payment, and logistics management applications and services.
When firms analyze billing information to drive business decisions, "the transportation savings dwarf the audit savings," says Shannon Vaillancourt, president and founder of RateLinx, a supply chain support, technology, and solutions provider headquartered in Madison, Wis. "We catch carrier billing mistakes, but we also focus on providing integrated transport intelligence businesses can leverage to handle their business."

 "We pay carriers on their due date, but the shipper doesn't need to repay us for 90 days.  This service basically expands the shipper's conditions with carriers without needing to renegotiate contracts, which could potentially lead to increased freight rates."
U.S. Bank, for example, is now redesigning its user interface with a strong focus on the customer experience, according to comments from customers who requested a higher level of personalization and easier usability.
These advancements have considerably pushed up the value freight audit and payment clients get for their cash.  Present-day prices for audit and payment services are 40 percent lower than they were 10 decades ago, 1 provider quotes.
By way of example, Austin, Texas-based logistics IT service supplier Fortigo receives frequent customer requests to conduct closed-loop audit solutions--cross-referencing freight data elements with corresponding information from their own sourcing, visibility, or manifesting systems.  While a freight invoice may seem accurate, cross-referencing can disclose discrepancies--for example, a service the shipper requested may be different than the service the provider actually supplied, calling for a chargeback.

Other suppliers blend freight audit and payment services with financial services.  "The more advanced customers need help managing money flow to maximize their advantage," says Rick Erickson, global director of cargo payment solutions to financial services company U.S. Bank, headquartered in Minneapolis.


Many freight payment businesses offer services in addition to auditing and paying invoices.  By way of instance, these invoices supply a whole image of a shipper's supply chain, while the information forms a snapshot of the distribution network's current layout that freight payment and audit providers can query and inspect to understand what is going right, and identify opportunities to enhance efficiency.
Many shippers have set up a goal to assess the true landed cost of their merchandise by SKU, order amount, or other metric.  But calculating accurate landed cost has proven challenging due to all of the factors that impact it, and the problem in gathering its components--including true invoices, customs duties, taxes, and accessorials.

For instance, RateLinx provides a "missing savings KPI" that steps each shipment to find out whether the optimal carrier was used.
Some suppliers complement their freight payment and audit services with a complete TMS to tender and monitor customer shipments.  At Memphis-based supply chain management and technology provider CTSI-Global, roughly 70 percent of customers use at least some modules of their company's TMS, along with its freight audit and payment services.  Some customers use CTSI-Global to enhance in house functionality; others entirely outsource shipment tendering and monitoring.

"The freight audit process uncovers numerous findings can funnel into their decision-making," notes Kontoravdis.
Some freight payment companies, including Carmel, Ind.-based supply chain consulting and IT services company enVista, are enabling shippers to overcome these hurdles by compiling all the data needed to compute a true contracted price.

"Our Professional Services Division helps shippers with challenges such as speed analytics, benchmarking, and bid analysis.  Our clients get the full expertise of a seasoned logistician who can help them use the capacities of TMS and data analytics, and supply specific supply chain consulting.  By outsourcing to CT Logistics, the shipper does not need to hire a full-time employee to perform those tasks."

"Our clients want accurate data, and the capacity to readily act on it," says Erickson.   It'll be intuitive, with fewer clicks demanded, allowing customers to get in, do their work, access their data, and get out, and that's what they want to do."

"Businesses can access one global data warehouse to examine on-time deliveries or shipping price per unit, for instance," explains Brian Scott, senior vice president, international sales, in CTSI-Global.

Freight payment information can reveal a lot to information regarding their enterprise.  In response to customer feedback and requests, many freight payment companies have developed new types of services, improved reporting capabilities, and additional more telling key performance indicators (KPIs).  Projects originally customized for a single client often develop into a product any freight payment client can benefit from.
Freight bill auditing and payment has been around leveraging information--scrutinizing statements to detect billing mistakes that may cost shippers thousands of dollars in erroneous prices and accessorial charges.  No wonder, ferreting out errors remains important.  But a lot of freight audit and payment firms are currently delivering an entirely different set of advantages utilizing the data shippers discuss their freight bills.
All that adds up to significant price, particularly for those loopholes that draw maximum benefit from the expertise and lengthy services their cargo payment providers provide.  Those that pick carefully and keep close, collaborative relationships like profound insights in their supply chains to feed well-informed, strategic decision-making.
Home all of the data in 1 place means shippers can gather the information they need from one source--rather than collecting various components from carriers, freight payment companies, and TMS options--to acquire full supply chain visibility.

Assessing the information can disclose trouble spots that shippers and carriers may tackle to head off potential expenses, such as unnecessary accessorials or erroneous mileage calculations.  A deeper look can drive strategic decisions about issues like carrier speed discussions and facility site choice.
To meet these needs, freight payment and audit companies are investing in technology, procedures, and expertise to provide value to shippers--and distinguish themselves in a crowded marketplace.

Not all shippers have their cargo invoices audited.  Many freight audit and payment customers are large companies, although action among midsize shippers is climbing.  Of those businesses that do participate a cargo payment auditor, only a portion take true advantage of the entire range of services they're paying for.
Effectively using cargo data can reap shippers in ways beyond just catching invoicing errors.  Because supply chains evolve as firms growwith traces of business or customers continually being introduced or stopped, and routing demands shifting--often analyzing freight bill data can provide fresh insights, drive smart decision-making, and increase potential price savings.
To enhance these value-added offerings, and help shippers reap more insight from their data, many freight payment companies are continuously updating their IT platforms and specialist services.

Increasingly, those expectations and needs do not apply only to shippers' domestic cargo invoices.  More shippers are looking for the identical level of visibility and analytics about global freight action, unified in a single platform with constant formats which resolve differences in language, currencies, units of measure, and other variables.
"Shippers are turning to us to get information analytics," notes Allan J. Miner, president of Cleveland-based CT Logistics, which provides post-audit, pre-audit, freight payment, business intelligence, transportation management consulting, and international transport management systems (TMS).
Today's freight audit and payment solutions center on implementing deep analytics, married with supply chain consulting expertise, to glean insights from data--then delivering those findings quickly and to assist shippers drive both strategic and tactical decisions that improve supply chain efficiency and remove costs.

 Most freight payment companies continually invest in preserving and enhancing their IT systems to improve performance, be userfriendly - and device-friendly, and supply extra services.

When selecting a freight payment provider, shippers are now considering IT investments and analytics informed as in the potential provider's ability to accurately and efficiently manage bills and freight bill payment.

Shippers are also expressing interest in real-time reporting, which permits them to see KPIs on the internet and drill down to more unstructured information, instead of waiting for periodic reports, notes George Kontoravdis, president of Fortigo.  Another frequent request is route optimization based on historic shipping information, which shippers can also use to improve the routing guides they issue to providers.