Freight Audit Differences: How to Make the Most of Your Audit Author: Gary McKenzie
April 16, 2019

Freight Audit Differences to Keep in Mind

Now, there aren't a lot of differences between a freight audit from one carrier to another. But there are subtle differences in the rules that each carrier adds to their tariffs. For example, Old Dominion Freight Lines will allow up to 20 linear feet of space on the truck. After that, you get into an overcharge situation.

FedEx is the same, but UPS Freight will allow you 25. So, most of that is about the rates themselves. But a good audit would make sure that all the rules for each of the carriers are all coded. This is so that the invoice includes not only your tariff. It will also include your contract rate and the rules tariff that underlie that. And each carrier is different in which rules they apply. So a good auditor will know, and those do create subtle differences among the carriers.

Overcharges From LTL Network Overload

A lot of this happened last year. There are customers who are very accustomed to having full truckloads available. They found that they could not get trucks. So, a significant shift into the LTL network occurred. It was clear that shippers wanted to get their freight out. So what happened was sometimes they would put in seven, eight, 10 pallets into an LTL network. It pretty much overloaded the LTL networks. That created a huge price spike, they became something to expect in LTL.

Then this is where the rules that I mentioned come into play. If you've got 25 feet on a truck, before you get into overcharge, you have a lot more room to put more pallets on that truck. The carrier you chose, they go as low as 10 feet. So, if they only allowed 10 linear feet, your overcharge would have been significant last year. So understanding those rules are important. So, it's not always the case. Customer stories, sometimes entire industries, can create problems. These were problems that the correction seems to be LTL. But let's say that you don't understand the rules and don't understand how to read those invoices. You may then find yourself paying a lot more than you thought.

How the Logistic Platform Can Help

The Lojistic platform has all these rules. So, we keep track of them, we keep them updated in our system. When the system is looking at an invoice, it is always aware of not only your tariff and your contract. It is also aware of the underlying rules. So that's important. You're going to negotiate a lot of your contract with regards to the rates or minimums. Or here's another example. Your contract with Old Dominion Freight Lines may waive certain things. These are often where your contract with FedEx Freight will not. That's in your contract. Underneath that, there's the rules tariff.

Those are the subtle differences, where some carriers allow you to bump the class. This is a common practice. But that's the case only for commodities that have density based freight classifications. So, say that you try bumping in a carrier that doesn't recognize that. This means you're going to have weigh and remeasure charges throughout. Our system knows which carriers that offer that. They may not be in your contract, but it's in the rules. We'll be able to spot it.

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