It should be simple. You accept a quote for a shipment, prep it for transport, and get an invoice when the job is done. Yet, all too often, the invoice doesn’t quite match the quote. When there are errors, it creates more work to file disputes.
Even when you win a dispute, it’s costly because you’re tying up your team by hunting down errors, providing the documentation needed, and chasing carriers that are prone to deny disputes at an increasing rate.
It is frustrating and costs time and money.
However, there are some things you can do to conduct LTL freight audits more efficiently to streamline the process.
You need a standardized approach to analyze every invoice and compare it to contracted rates and quotes. For high-volume shippers, you need to either deploy automation or outsource your LTL freight audits to ensure accuracy. There’s simply no other way to efficiently handle the volume and catch mistakes — which are almost always in the carrier’s favor.
Generally, the freight audit process follows these steps:
The audit is your process for verifying that the rates and charges match the contract or spot quote rates. You identify duplicate charges or errors and confirm the shipment details are accurate.
Large shippers that audit freight bills in real time see significant savings. According to a study by S&P’s Journal of Commerce (JOC), companies with $1 billion or more in annual revenue have reduced their processing costs by 70% compared to small competitors by real-time auditing freight bills.
Audits often uncover:
Even after invoices are paid, shippers should conduct a post-audit to look for patterns or trends. This review can uncover opportunities to reduce shipping costs and monitor carrier performance.
For example, knowing which carriers tend to have inaccurate invoices or fail to meet delivery guarantees compared to others. This gives you the data you need to address the issue with your carrier. You may also find opportunities to consolidate shipments to take greater advantage of volume discounts.
While audits can find inaccuracies in specific invoices, a post-audit can map against KPIs and help you find ways to reduce overall shipping costs and increase efficiency. Partnering with the right 4PL like GLI, for example, can give you an in-depth look into freight class, modes, routes, and carriers to find hidden savings. A comprehensive analysis can provide deep insight to identify strategic changes to streamline operations and lower costs.
When you find an error, it’s crucial to address it immediately. You should notify the carrier within 24 hours of receiving an inaccurate invoice. Most carriers have a standard way to submit disputes, although an email can often start the process and provide you with evidence of your notification.
Follow up with required documentation within seven days. The more complete your information is, the more likely you are to get a better — and faster — result. This starts with prepping shipments and making sure the details are provided, such as:
Before shipments are picked up, it’s also a good idea to capture images that show dimensions and record weights. You should also validate the accuracy of your scales periodically to provide additional proof.
Additionally, shippers should also create a commodity shipment profile or "spec sheet" that includes internal numbers, weight, and dimensions of the items being shipped. Carriers are increasingly requiring this documentation to dispute reweighs or reclassifications. With carriers investing millions in high-tech equipment to quickly weigh and measure shipments, they now inspect over 90% of shipments, compared to the previous 5-10% when done manually. These investments are driven by the need for a positive return on the significant costs involved.
You're losing money if you’re not applying a rigorous audit and post-audit process. According to the National Shippers Strategic Transportation Council, errors occur in up to 10% of freight bills. Comprehensive and consistent LTL freight audits can save shippers between 2% and 5% of their total transportation costs.
For high-volume shippers and eCommerce companies, that can add up to big bucks. With custom freight programs designed for manufacturers, distributors, and D2C companies, GLI helps its shipping customers save an average of 10% to 30% on freight costs and expenses. These savings include identifying billing errors through a rigorous auditing process, which has saved GLI customers over $200 million.
If you're not conducting thorough LTL freight audits, you're likely leaving money on the table. By implementing both audits and post-audits, you can catch errors early, reduce disputes, and ultimately lower your transportation costs. But there's a lot more you can do to streamline your audit process and ensure every dollar is accounted for.
Ready to take your freight audits to the next level? Download our ebook, Optimizing the LTL Billing Disputes Process: What CFOs Need to Know to Streamline Their High-Volume Shipping, and learn how to:
Equip your team with the insights and strategies needed to optimize your freight audits and keep your shipping costs under control.