Freight Auditing: How Many Shippers Outsource and Why?

Freight auditing is essential to protect the bottom line, ensuring shippers aren’t needlessly wasting money on invoice errors. And the best way to audit consistently, accurately, and thoroughly? Outsourcing this task to a third-party provider.

To understand the true value of outsourced freight auditing, let’s take a look at the differences between in-house and outsourced auditing—and see what shippers are doing today.

In-house freight auditing is more expensive and time-consuming—and less thorough

It is possible to audit freight bills in-house, but doing so is rarely a good use of employees’ time. Pouring over the hundreds of invoices that the supply chain generates every month is incredibly time-consuming and expensive, costing as much as $15 per invoice. This explains why many shippers that choose to handle their own auditing ultimately only perform spot checks rather than reviewing everything.

This approach simply doesn’t work. Imagine you had a box of 50 chocolates and you knew that around 20% were poisoned. Someone offers to test the chocolates for you—but they only test a handful and call it a day. Even if they caught a few poisoned ones in that random sample, would you still eat the rest of the box? Of course not—because you know there’s a good chance that some poisoned treats remain.

Taking a spot-check approach to freight auditing is like eating the chocolates anyway and getting sick as a result. Some invoicing discrepancies are caught, but many error-filled bills are processed and paid without anyone realizing how much havoc they’re wreaking on the bottom line. This includes shipments that have been billed at the wrong rate, fees that have been tacked on for no good reason, and even invoices that have been accidentally duplicated—all adding up to the tune of thousands of dollars overpaid.

By contrast, when shippers outsource their freight auditing to CTSI-Global, we can audit 100% of invoices—including those from international shipments. That way, no stone is left unturned, and no opportunity to save is overlooked. And since we’ve spent decades perfecting the art of the audit, we can process invoices for a fraction of the cost of doing it in-house—leading to even greater savings.

Manual freight auditing is on the decline—but many shippers still have no system in place

The number of shippers manually auditing their freight bills is declining, at least when it comes to domestic freight. Gartner’s research shows that in 2018, around 15-20% of shippers manually processed domestic freight payments, though a higher percentage handled their international invoices in-house. Shockingly, 30% of shippers had no system in place at all to audit and pay freight bills.

Only one in four shippers (25%) outsourced freight auditing to third-party logistics providers or specialized vendors. That means a whole lot of time is being wasted—and a huge amount of money is being left on the table.

Outsource freight auditing to the experts and save

As the saying goes, do what you do best and outsource the rest. Rather than wasting time and money handling freight auditing in-house (or, worse, not auditing at all), trust the experts at CTSI-Global to help you save.

We process more than $15 billion in transportation spend every year—catching countless invoicing errors that would otherwise slip through the cracks. In addition to thoroughly auditing your bills, we’ll also allocate charges and make payments, freeing up your team to focus on more strategic work. Plus, thanks to our leading-edge reporting and business intelligence tools, we’ll provide you with a level of data and insight into your freight spend that’s difficult to get on your own—allowing you to make more data-driven decisions.

In future articles, we’ll explore the benefits of relying on the same vendor for your transportation management system (TMS) and freight auditing needs. In the meantime, find out how much you could save by contacting us today.

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