Best Practices for Improved Freight Auditing

Logistics Tech Outlook | Wednesday, June 22, 2022

Proper execution and data-driven management can determine the success or failure of the entire freight auditing procedure.

Fremont, CA: Freight auditing can provide a competitive advantage for billing and cost reduction. As the complexity of the shipping sector increases, so does freight payment. It demands concrete processes, substantial data capturing, stringent auditing, and complete adherence to the shipper's business regulations. If a shipper's internal team is tasked with identifying and resolving invoice errors, it may detract from other, more strategic and valuable responsibilities and cost more than the savings discovered.

The practice of freight auditing can improve profitability, optimize logistics, increase efficiency, and, most crucially, reduce costs. However, proper execution and data-driven management can determine the success or failure of the entire process. As e-commerce continues to expand, freight expenditures will continue to rise, and such increases will continue to play a crucial role in contract negotiations and in securing available capacity. Follow these best practices to achieve the goal of streamlined payment processes that rely on accurate data to provide robust analytical results.

Normalize data to make it comparable.

Data that may be presented slightly differently in many systems are consolidated into a single data point. Normalizing data points enables the collection of vital information from charge codes, proper names, and companies, as well as the coupling of origin and destination.

Analyze data to establish carrier performance benchmarks.

Benchmarking allows a comparison of current transport costs to competitive market rates, resulting in a more informed RFP process and the elimination of a significant portion of the effort associated with tracking total landed expenses.

Utilize zone skipping based on insights to reduce expenses.

Zone skipping enables carriers to consolidate parcel distributions and transport them to the same destination location, reducing waste and reducing rates by avoiding the higher costs of air shipment.

Listen to the auditing specialists.

Shippers have numerous obligations; determining the optimal auditing method is not their core business. Therefore, outsourcing audits and collaborating with auditing experts is vital for controlling costs and optimizing value through enhanced auditing and data utilization.

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