Is Your Freight Audit and Pay Provider Providing Good Service or Not?

Evans Educates

08 July 2020

It's time to ask the hard questions.

We had a “meeting of the minds” last week and wanted to share some of our findings with you on rating APIs and FPA. Our team discussed where digital is working and, frankly, where it’s not.

In this digital world of supply chains that we all live in now, we’re always challenging ourselves to take a hard look at the data, and then use our people to find the best solution for each and every unique customer. What follows are some fact-driven statistics and findings we uncovered:

Did you know that roughly 13.5% of LTL orders have a discrepancy between the original rate based on shipper data and the carrier invoice?  Common discrepancy reasons include:

  • Re-Weighs
  • Re-Classes
  • Accessorials (liftgate, overlength, high cost, etc.)
  • Reconsignments

The average discrepancy cost is about $60. The percentage of orders that a carrier rates incorrectly?  About 1.5% of all orders. But there are incorrect rates on 6% of orders with variances.

The cost of time in managing disputes as a 3PL, Shipper, and Carrier can vary considerably, but the overall cost is real.

  • 3PL Cost
    • Properly trained staff to manage those disputes
    • Customer not being invoiced quickly/pay quickly
    • Customer dissatisfaction
    • Root cause analysis and systemic correction when possible
  • Shipper Cost
    • Difficulty recovering additional transportation expense from customers (plus additional handling charges when applicable)
    • Accounting discrepancies on first invoice vs. supplemental potential
    • Delayed invoices
    • Additional processing or approval time, or potential additional charges from audit company
  • Carrier Cost
    • Inspection time and effort on the dock
    • Inaccurate costing
    • Additional invoice processing effort
    • Delays on the dock that can affect service and efficiency

So, how can you properly dispute these charges without being able to rerate historically based on the new data points?

  • Adding standard contracts to the TMS for rerating capabilities
  • Manually rating the order
  • Trust the carrier is accurate

As you can see, there are a number of common pitfalls within the digitization atmosphere, and with FPA if not managed using best practices. There comes a day when it’s time to ask the hard questions about your freight audit and pay provider. Maybe today’s that day? Contact us after you’ve answered that question and are looking for some guidance. We’re here to help.

Evans Educates


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