Freight audits are an essential process in the supply chain. These tedious audits ensure the accuracy of freight bills, which, in turn, hold the potential to reduce shipping costs and increase shipping capacity.
Manual freight audits can be extremely tedious and time-consuming, as you are examining freight bills, which are then verified and adjusted for accuracy. You have multiple fields to examine, such as shipper and carrier information, bill of lading, tracking data, mileage, shipment weights and pricing. It’s also critical to ensure that the invoice has not already been processed; otherwise, you can end up with duplicate payments.
Today’s modern supply chain and logistics companies acknowledge that freight audits are an essential part of the equation. But few can dedicate the resources to perform manual freight audits. The process is simply too costly and time consuming. This is where freight audit outsourcing can be a smart business decision.
Outsourcing Freight Audit: The 5 Ws
Companies typically turn to freight audit outsourcing in an attempt to save time and money. But choosing the right outsourcing partner can be a challenge. How do you know which freight auditing service provider will deliver the maximum ROI?
Virtually every outsourcing company uses some form of the “we’re the best” mantra. But you want more than an empty promise; you want to partner with a freight audit service provider who will actually deliver. As you evaluate the candidates, consider the 5 Ws of freight audit outsourcing.
- Who – Who is the company? Learn about their company history and track record. Who is the company founder or company leaders and how do they differentiate themselves in the industry?
- What – What is the company’s specialty? Are freight audit and payment services their area of expertise? Enquire about their past projects in this area and discuss how their services benefitted their clients.
- When – Is the company currently offering freight audit and payment services? You want to work with a freight audit outsourcing partner that is actively accepting new clients for this service offering. Otherwise, they may be out-of-touch and lack key insights into the latest technology and most modern techniques.
- Where – Where is the company based? Do they have a local headquarters or do they work on a decentralized model? If the service provider lacks a local presence, this could translate into a lack of support. You want a company that maintains a local pool of highly-qualified talent that is capable of supporting the complex needs of your freight audit outsourcing project. The best freight audit and payment service providers work with individuals who have refined linguistic abilities and advanced technical skills.
- Why – Why should you select this service provider as your freight audit outsourcing partner? The answer: the latest and greatest technology and the best, most efficient processes. They should be able to quantify their results and their benefits. They should offer compelling reassurance that they can not only meet — but exceed — your expectations.
A reputable service provider should also be capable of providing references. Don’t just take their word for it either; reach out and contact these references to discuss their outsourcing experiences. These insights can be very enlightening. They may instill tremendous confidence or inspire you to pack it up and head for the hills. Whatever the case, you’ll be able to proceed knowing you did your due diligence in searching out the best freight audit and payment outsourcing partner for your needs.
Additional Questions for Freight Audit Outsourcing Service Providers
The five Ws can go a long way toward helping you evaluate a prospective freight audit outsourcing partner. But in some cases, a bit of uncertainty may still linger. In these instances, a few additional questions can go a long way toward helping you determine if the company is a good fit for your needs. The following is an overview of the three most common freight bill errors. Take some time to discuss how the company addresses these common freight bill errors.
Shipment inaccuracy occurs during the shipment processing phase. For example, a shipment weight may be calculated improperly; this can lead to an inaccurate shipping cost, which is, in turn, passed along to the customer. This sort of error isn’t usually discovered until the item is delivered and the parcel recipient finds that their shipment fee is far more than expected. The discrepancy is then traced back to the inaccurate weight documentation at the beginning of the shipping process.
Accessorial charges refer to add-on charges for additional services. For example, a freight delivery company may charge an additional fee for residential parcel pick-ups or there may be an added fee for delivering a package after-hours to a location in a gated community. The most common freight bill error involves the amount for the charge (i.e. a residential pick-up fee may be $50, but you’re billed for $500.)
Detention penalty charges are issued to shippers in cases where a pick-up is delayed. So let’s say you have a pick-up time frame from 10:00 a.m. to 12:00 noon, but there is a delay and the shipment isn’t ready until 4:00 p.m. A detention penalty is issued in this scenario because the shipper is detained and forced to wait four hours. The most common freight bill errors involve the wrong hourly detention charge (i.e. $175 per hour instead of the agreed-upon rate of $75 per hour) or the wrong number of hours (i.e. 44 hours instead of 4 hours.)
Finding a freight audit outsourcing partner can be a challenge, but these questions and discussion points can help lead you to the right service provider for your needs. At iTech, we have extensive experience in the realm of freight audit and payment solutions. We invite you to contact our team today to discuss how our outsourcing solutions can benefit your bottom line and streamline your operations.