Six common challenges shippers face

The freight audit process is necessary for reducing transportation costs. Shippers need to
address challenges involved in freight auditing for good management.

Freight billing errors. Duplicate freight bill payments. Complex tax rules of different
countries. All this data requires efficient auditing by companies for better freight
management. The freight audit process appears complex and difficult to comprehend for
many businesses. But, an expert can find all the relevant data and aid in optimizing the
shipping process. In this article, we will discuss the challenges faced by shippers during the
freight audit process.

Why is the freight audit process complex?

Freight rates proposed by shipping carriers change frequently. It could be due to fuel prices,
tariffs, etc. In addition, the negotiated shipping rates decided by the carrier and shipper
have to be revised constantly. That's why freight auditing is vital for shipping companies.
But, the freight audit process appears complex as it requires detailed invoice checking,
diligent staff, and scheduling carrier payment in time. The process becomes complicated
when shippers have in-house manual audits that are not error-free. Also, the traditional way
of freight auditing is time-consuming and stretches resources. Shippers face many
challenges during the freight audit process.

The six common challenges faced by shippers during the freight audit process

The traditional way of auditing freight invoices does not solve the root cause of freight
billing errors. Further, auditing involves keeping track of freight claims and requesting timely
refunds from shipping carriers. So, here are six challenges shippers face and the solutions to
overcome these challenges.

1. Duplicate invoicing
 Shipping carriers invariably issue duplicate freight invoices. Companies dealing with
huge shipping volumes receive thousands of freight invoices every year. Without
proper auditing, businesses pay twice for a single invoice, thus causing a loss of
revenue.

2. Discrepancies in freight rates

Freight rates change constantly, but some companies use old freight rates during
price calculations. It leads to confusion and disputes between the companies and the
shipping carriers. Discrepancies in freight rates lead to inconsistencies in invoices
and quotes.

3. Incorrect freight classification

Freight classification (NFMC) for shipments is essential for calculating shipping
charges. This classification has 18 freight subclasses with different specifications for
density, size, stowage, and liability of the goods shipped. Error in identifying the
correct NFMC code for calculating freight charges will prove costly for shippers.

4. Shipping discounts
Shipping carriers offer discounts to their regular clients. Shippers can negotiate with
shipping carriers for the best shipping discounts for freight shipping. However, if
contract negotiations with shipping carriers are not updated regularly, shippers can
lose out on the shipping discounts.

5. Tax and Tariffs

Applying tax rates for state, federal, and global shipping is vital for calculating freight
charges. Wrong taxes or incorrect custom duties will affect the entire shipment. In
addition, if taxes are not a part of the invoices, it will cause a delay in shipments,
wasting valuable time and money.

6. Accessorial fees
 Surcharges or accessorial fees influence freight shipping costs. It is essential to have
an accurate accounting of Fuel surcharges, terminal handling surcharges, Emergency
bunker surcharges, peak season surcharges, etc. The wrong application of surcharges
will lead to incorrect invoices and further invoice reviews.

These are some of the challenges faced by freight shippers that need quick resolution. The
Manual freight audit process involves teams that manage payment exceptions and
vouchers. Further, the overworked staff of the audit teams is prone to cause human errors.
So, it is essential to have digital solutions for optimizing shipping processes.

What are the solutions to overcome the challenges?

Technological innovation strategies and their implementation assist in the management of

freight auditing. Automation of freight documents like freight billing will eliminate duplicate
payments. Each invoice is validated to prevent overpayments with the help of effective
auditing systems. In addition, shippers get greater visibility of the freight rate system with
automated updates. With state-of-the-art freight post-billing solutions, shipping companies
can understand freight classifications. Freight auditing software streamlines audits of freight
invoices. Its real-time data helps in better negotiations with carriers for shipping discounts.
In addition, it can schedule carrier payments at the optimal time and receive refunds
without any hassles. Data accuracy ensures accurate tracking and monitoring of freight
surcharges to shipments. Hence, state-of-the-art technologies and strategies help in
effective freight management.

Benefits of partnering with Audintel

A freight audit provider, Audintel, provides quick audit solutions for freight billing
inaccuracies. Shipping companies can improve their business processes with an efficient
freight audit process. At Audintel, we do three-way match file audits that compare and
validate the invoices of the shipping carriers and the shipment files. In addition, we carry
out audits on freight rates, duplicate invoices, accessorial charges, and fuel surcharges. Our
freight audit tools help in requesting pending refunds from shipping carriers. We track and
monitor accessorial fees so that our clients do not overspend. Our negotiating team experts
conduct carrier contract negotiations for our clients and save money.

Final thoughts

Freight auditing may appear complex with complicated terms mentioned by shipping
carriers. A trained eye can detect freight billing errors and claim refunds immediately. With
real-time intuitive dashboards and expert analytical resources, Audintel reduces freight
costs and gives our clients a competitive edge. We, at Audintel, streamline the freight audit
process for our clients. Discover more by reaching us, or by checking out the Audintel
website.
References:
https://itechdata.ai/common-logistics-invoice-data-capture-challenges-in-freight-bill-audits/
https://www.intelligentaudit.com/blog/a-freight-audit-and-payment-guide-challenges-tips-
benefits/
https://www.globaltranz.com/auditing-freight-invoices/
https://www.ratelinx.com/resources/3-facts-about-freight-audit-and-payment/
https://shipware.com/blog/understanding-the-freight-audit-process/
https://corporate.nvisionglobal.com/minimize-problems-with-freight-claims-by-evaluating-
common-errors-first/
https://ctsi-global.com/2019/a-hole-in-the-companys-pocket-the-challenge-of-auditing-
freight-invoices-and-what-it-really-costs/