Eliminate the Need for Freight Auditors

Freight is the second highest line item expense for most companies, while labor fills in the first slot. This explains why so much time and effort is invested into reducing this cost. This is an interdepartmental issue; IT, management, and logistics all try to tackle this issue from different angles.

How Do Companies Reduced Rates?

Companies often look to outside partners or consultants for help who offer manual freight invoice auditing as a service. Usually the consultant or provider of the service keeps 25-50% of the savings they uncover. In this instance the consulting service is performing an auditing service on your transportation invoices. Over the past 20 years of working in logistics, I have seen auditors find anywhere from $100 per month up to $20,000 per month in invoicing mistakes.

An additional auxiliary service which is often tacked on to the audit, is that the consulting firm will also pay the invoice for you. Good in theory, but this is just another outsourced service that abstracts your ability to directly be involved with your logistics process.

Lets break down why a freight audit is necessary what it does. In some cases carriers flat out invoice you the wrong rate, or they will invoice you for services that they did not provide to you. In other cases, the carrier will invoice you correctly; but they will not meet their service guarantee, which will entitle you to a refund.

A good freight audit will examine for:

• Rating errors
• Duplicate charges
• Incorrect weight and accessory fees
• Incorrect freight classifications

The purpose of a freight audit is that you will only pay for rates you've agreed to pay, and the services that you actually received. If you're looking for savings, you can go look for an auditing service, or you can find the right TMS (Transportation Management Service) which has this functionality built in.

Newer shipping solutions and TMS' are adding this as a module within their platform so that you don't have to search, and pay, for outside help. At FreightPOP, we included freight invoice auditing at no extra cost to the user. If you're interested in our solution read on about it more here.

To learn more about parcel and freight auditing, check out our guide!