The Key Benefits of Outsourced Freight Audit and Payment Services, According to a Shipping Expert

It’s a challenging time for shipping companies. Driver shortages and rising international tariffs are pushing freight costs up, forcing companies to choose between raising their prices and risking losing business or swallowing the costs and cutting into their own bottom line.

These problems are industry-wide, and they’re not going away anytime soon. In this climate, it’s vital that companies explore every possible avenue for savings. One such avenue is outsourced freight audit and payment (FAP) services.

“Every dollar that you can optimize on freight goes direct to your bottom line,” says one shipping expert. His company, a global manufacturing firm, currently utilizes CTSI-Global for FAP and business analytics—both of which it used to handle internally.

Here are a few key areas where outsourced FAP can really pay off for companies of any size, according to this shipping expert.

A strong freight invoice process creates synergy and provides confidence

With 20 years’ freight payment experience under his belt, the expert had high expectations of the FAP provider when his company decided it was time to outsource.

“The expectation is this: that there’s a centralized freight payment location for all of our facilities’ freight invoices—so you have synergy, and the freight bills are going into one location,” he says. “We also have the confidence of audit, so rates are being applied to our invoices to ensure they’re properly paid. Savings are being realized. Avoidance is being realized.”

These are the core benefits of a good freight invoice process, the expert says. Companies that are new to FAP should come to the table with the same set of expectations when choosing an external provider to get the most of this valuable service.

Outsourced FAP helps companies put money back in the bottom line

“Any businessperson should look at any of their processes—their ordering processes, their vendors—to optimize that process,” the expert says. “But freight is overlooked, I think. Freight is a big commodity, and those in the freight world understand it’s critical to our business.”

Utilizing an outsourced FAP partner can help companies optimize their freight processes, which might otherwise be low on their list of priorities. The expert points out that by overpaying for freight, companies are getting no additional value despite the higher spend.

“Every dollar you save on freight is a dollar that goes into your profit,” he says.

Regularly auditing their freight can save companies thousands

When his company was handling freight auditing internally, the expert recalls the error rate for invoices was roughly 1.5-2%. As a general rule of thumb, he says this error rate is fairly consistent among shippers.

The areas where he sees the most errors? Domestic ground transportation and international freight.

“Human touchpoints cause errors,” he says. “With domestic trucking, when you’re shipping outside of a hardcoded, account-driven process, there are more opportunities for someone to make a mistake and forget to bill the company at the agreed-upon rate. On international freight, there are also opportunities for human error. For example, the weight could be entered wrong.”

Without a consistent and efficient auditing process, it’s very difficult for companies to catch invoicing errors—and those errors can be costly. Even a single-digit error rate can result in thousands of dollars of unnecessary spend, if not more.

While the expert says his company had automated the majority of its invoice processing before outsourcing it and only routed invoices to staff when there was an exception or extenuating circumstances, many companies lack the capabilities or resources to implement an automated process. This forces them to manually audit every invoice—which can be immensely time-consuming for staff—or to not audit their freight at all.

Outsourced FAP services remove those hurdles, ensuring companies are always paying the correct amount, without the hassle. The expert says auditing is always worthwhile.

“If you’re not auditing your freight, I think you’re crazy,” he says.

Outsourced FAP services you can rely on

CTSI-Global is a leader in freight audit and payment. Processing 5 million freight transactions a day, we know where the savings lie—and we’re dedicated to helping companies find them.

The experts trust CTSI-Global. Find out why. Contact us today.

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