Freight Payment as the Hack to Big Payback on Shipping Costs Author: Gary McKenzie
April 09, 2019

Freight Payment Issues Explained

It is primary to ensure that all your freight payment invoices are being audited. Much of it starts with negotiating the carrier pricing that you received to begin with. Everything that follows is a result of that contract.

What you need to make sure is that all your carriers adhere to that contract too. That includes not only the discounts that you've negotiated. It also includes all the accessorials that are common to your business. If that's the case, you usually have a good leg to stand on when you're trying to get discounted rates on even those. If that fails, you will get the full charge for all the accessorials. That adds up to a very expensive proposition.

Everything Starts With an Invoice

The freight payment side starts with an invoice. One of the things our logistics software does is pull in all the tracking details for that invoice. This makes sure that every move that happened along the life of that shipment is available to us. This is also very helpful in the audit process. This is because if there are more charges we would see them in the tracking part of it. So we capture all that data. If our customers also want to capture GL account coding, we can do that as well in the freight payment process. At the end of the day what it captures is where your money's going as it relates to your LTL spend.

It's an overstatement to say that there are endless errors that can happen in an invoice. But that's actually close to being true. No one's doing it on purpose but it does happen. Often it's a misunderstanding on the carrier. As far as what they're seeing, they're misunderstanding the contract that you've negotiated. Or it is that you've misunderstood the contract that you've negotiated.

A third party freight payment company analyzes those contracts. They make sure that everybody understands what the pricing should be. At the end of the day, the invoice is the ultimate scorecard of what happened. We want to make sure that everything in that invoice is accurate.

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