Every business should know its freight costs. This is especially true when relying on a network of carriers, rather than an owned fleet, since shippers may have less visibility and thus leave themselves open to creeping costs. Yet if asked, many companies would struggle to pin down exactly how much they’re paying.
If they could see this data, it might come as a nasty shock. Countless costs are hidden from most shippers—and these can cut deeply into the bottom line.
Here are a few troublesome hidden freight costs to watch out for—and how to stamp them out.
Sometimes, premium freight costs are a necessary evil. But when supply chain managers are authorizing expedited freight without any real justification, those additional dollars come straight out of the company’s profits.
The first step to reducing overspend on premium services is spotting when and where it’s happening. But without oversight into both big-picture shipping data and local spend, it’s almost impossible to spot this kind of rogue behavior until it has eaten deeply into the bottom line.
Implementing a robust transportation management system (TMS) allows companies to not only track shipping behavior but also nip overspend in the bud. Using their TMS, leaders and managers can set and enforce authorization guidelines for the use of premium services across all global facilities.
This increases visibility and control, bringing freight costs down while still allowing companies to accommodate regional requirements.
Late delivery penalties
Late delivery penalties happen. But when shippers don’t have visibility into their shipping patterns, these penalties may be happening more they realize—draining the bottom line.
Many late delivery penalties can be avoided by improving lines of communication with carriers. By making sure that both parties have all the information they need, shippers can avoid unnecessary delays at the warehouse that make it harder for drivers to reach the customer on time. And by implementing in-transit tracking, companies can get ahead of any problems—ensuring there are no costly surprises.
One of the fastest ways that shippers can waste money is by inadvertently paying duplicated invoices. Paying for one service twice just doesn’t make sense—yet it happens surprisingly often.
To avoid paying duplicate invoices, shippers first need to catch them. That requires comprehensive freight auditing. Unfortunately, many companies avoid this crucial step and wind up paying much more than they need to.
Freight audit and payment services can help shippers reduce the strain on their accounting departments and save money. And by automating many tasks that staff would otherwise spend hours on, these services can prevent the accounting team from being stretched too thin.
Another hidden cost that can be solved with regular auditing is the cost of missing discounts. When a shipper and carrier have agreed upon a discounted rate, the shipper needs to check whether that discount is reflected on the invoice. Often, the carrier will forget—and when this goes unnoticed, companies can leave countless dollars on the table.
Freight auditing services can help shippers ensure they take full advantage of every deal and never pay a dime over the agreed-upon rate—without any additional burden on their staff.
Put money back in the bottom line
With the right technology, shippers can gain total visibility into their freight spend—and bring it down.
At CTSI-Global, we’re dedicated to helping the companies that partner with us improve their processes and reduce their freight spend. Our industry-leading tools make it easy for shippers to see exactly what they’re paying and when—and unlock a goldmine of savings.
Never miss an opportunity to save. Contact us today to find out more.