Features impacting Transportation Spend Management

Transportation Spend Management for effective cost management

by BlogTSM Services

Disruptions in the global supply chains are affecting businesses worldwide. The price of ocean and air freight is steadily increasing. Now, the global container freight rate is rising significantly. It has reached USD 5,900 in July 2024. For instance, DHL believes freight rates will increase in the next few months. The freight rate hike can be due to port congestion, strong demand, and other global factors. The freight rate hikes affect the profit margins of companies. With this information, shippers and shipping carriers can make better decisions regarding the time and place to ship their goods.

Further, cutting transportation costs is a priority for many companies. Supply chain challenges and uncertain economic growth are fueling cost-cutting measures in businesses. Investing in Transportation Spend Management can lower an organization’s shipping expenses. Earlier, we had discussed the concept of Transportation Spend Management. This article will examine the main aspects impacting Transportation Spend Management.

Management of transportation costs

Businesses have to bear expenses when shipping packages from one location to another. Transportation costs include fuel prices, warehouse fees, transportation modes, carrier rates, and more. Shippers with high shipping volumes and shifting consumer trends require a robust solution to reduce costs. Companies have to manage expenses with meticulous planning and efficiency.

Additional transportation expenses include shipping insurance, specialized handling, packaging, storage, etc. Managing transportation costs is challenging due to imbalances in inventory and regulatory compliance. Further, investing in technologies like Transportation Management Systems (TMS) and Warehouse Management Systems (WMS) is expensive and requires training and expertise.

Technology to manage costs-Transportation Spend Management

The overall visibility of transportation costs is possible through an advanced software, Transportation Spend Management  (TSM). In our previous blog, we explained the significance of TSM  in reducing costs. Transportation Spend Management normalizes transportation data. It analyzes data through tools like data analytics, tracking, and reporting. It tracks expenses and streamlines shipping operations. TSM solutions offer cost-saving opportunities and enhance customer satisfaction.

Factors Impacting Transportation Spend Management

TSM, or Transportation Spend Management, helps businesses stay competitive with increased customer satisfaction. It is essential to consider the following factors impacting Transportation Spend.

Various modes of transportation

Companies can reduce shipping expenses with various transportation modes. Shippers can reduce transportation costs by using many shipping modes like trucks, rail, air, and ocean freight according to the delivery requirements. For example, businesses can use trucks for short-distance delivery of goods. Shippers can decrease shipping costs and optimize route efficiency based on shipping requirements.

Supporting various modes of transportation can minimize delays and increase profits. A cost-effective strategy is to optimize the cargo capacity in the containers and reduce the empty spaces. Shippers need to explore the transportation modes and services as it will affect their business profits.

Shipments consolidation

Businesses have to fill the shipping containers so that shipping is cost-effective. Shipment consolidation involves merging small shipments into one shipment to a single destination. Consolidating shipments saves money and improves supply chain performance and operational efficiency. In addition, the cargo space in a shipping container increases with a decrease in individual trips.

Dimensional weight pricing by shipping carriers is costly. Shippers can reduce the dimensional weight charges by using compact packaging and box size reduction. Shipment consolidation lowers transportation costs and enhances customer satisfaction.

Distance and delivery speed of shipments

Long distances and faster delivery speed of shipments attract high invoice prices. Long-distance delivery of goods involves more fuel consumption and workforce. Express delivery services involve dedicated personnel and prioritized handling. Both these aspects of shipment delivery are expensive and can erode a company’s profit margins.

Employing strategies for regional sourcing of goods can decrease the delivery travel time. Shipping packages to distant locations by ocean freight is time-consuming, but it is a cost-effective option. Further, pre-planning to procure goods for shipping in a shorter transit time decreases transportation costs.

Negotiate Carrier rates and contracts

Shipping carriers offer shipping rates to companies based on market demand, capacity, distance, and service levels. The contractual agreements between shippers and shipping carriers include rates, payment terms, service levels, insurance coverage, and liability.

Negotiating carrier contracts and rates is challenging for businesses. Shippers can secure discounts and preferential rates from shipping carriers during contract negotiations. Negotiations with the shipping carriers are about services, delivery guarantees, rates, and surcharges. Further, businesses can negotiate flexible contractual agreements with reliable shipping carriers. Shippers benefit from discounts and lower rates by building strong carrier relationships.

Utilization of technological solutions

Data analytics provides real-time visibility into shipping operations. Internet of Things (IoT) sensors monitor cargo conditions to ensure it is safe from damage with proper handling. Automation technologies like robotics and autonomous vehicles can streamline the order fulfillment process. Transportation Spend Management works on AI-powered platforms to monitor and track on-time deliveries of packages.

Companies that utilize technological solutions like Machine Learning and intelligent algorithms can analyze shipping data and save money. Further, businesses can benefit from dynamic Transportation Spend Management with real-time operational visibility.

Partnering with third-party logistics

Businesses benefit by partnering with third-party logistics (3PLs) as they streamline shipping operations. Functions like warehouse management, labor, equipment, and fleet management can reduce transportation costs effectively. Further, 3PLs use the latest technological developments for efficient transportation processes.

3PLs offer flexibility to businesses to use resources based on their needs. They help shippers deal with delays in shipping goods and other unforeseen circumstances. 3PLs can reduce transportation costs with their expertise and resources.

How does Audintel lower transportation costs with Transportation Spend Management?

Audintel helps clients control their shipping expenses with its Transportation Management (TSM) services. We offer parcel and freight audit services that can identify mistakes in shipping invoices among more than fifty audit checkpoints. Our teams process carrier invoices and identify unwarranted charges with our Multi-point invoice audit. Companies can avoid penalties with our timely invoice processing and payments.

Audintel’s intuitive and customizable dashboards lower transportation costs and optimize shipping operations. Shippers can get in-depth, real-time data on shipment expenses. We help businesses save transportation costs by minimizing failed deliveries and aiding in refund processes. Our team has experts in carrier contract negotiations to help shippers negotiate efficiently with shipping carriers. Our comprehensive tools with customizable shipping reports save money for our clients.

Audintel optimizes freight costs with its TSM services. We leverage historical shipping data to gain insights into cost-saving opportunities for shippers. Clients can track their freight in real-time and identify discrepancies in shipment deliveries. Our TSM solutions highlight cost-saving opportunities for shippers with actionable freight data. Audintel’s SaaS Business Intelligence portal provides greater clarity of carrier performance, making it easier to choose reliable shipping carriers.

The bottom line

To avoid geopolitical disruptions and increases in shipping costs, companies are rethinking their supply chain management. Shippers are changing their manufacturing location, product lines, and procurement strategies. Shippers have to meet customer expectations with faster deliveries while decreasing shipping costs. It is challenging but possible when you partner with reliable service providers like Audintel.

We help businesses control their transportation spend through our TSM solutions. Our AI-powered software tools analyze shipping expenses and identify areas for cost reduction. The actionable, agile platform of Audintel gives real-time analysis of shipping data. Our TSM cloud-based solutions reduce organizational costs and increase operational efficiencies. Our support staff negotiates to get refunds from carriers on time. Audintel is continuously embracing technological advancements and optimizing transportation spend. For effective budgeting and expense reduction, use our TSM services.

To try our state-of-the-art TSM services, contact us at +1 (619) 354 8539. Additionally, visit the Audintel website to explore ways of reducing transportation costs with our products and services.

Freight Audit and Payment New

Freight Audit and Payment (FAP) for streamlining shipping costs

by BlogFreight Audit

The Freight and Logistics market in the US is the backbone of its economy. Increasing globalization and e-commerce growth are fuelling demand for efficient freight and logistics solutions.

According to news reports, freight activity in the US is picking up after a two-year slump. Further, the United States Freight and Logistics Market may grow to USD 1.29 trillion by 2029. Managing freight invoices becomes complex as the shipping volumes increase. Evaluating and analyzing vast amounts of freight data and validation is time-consuming. Many resources are required to identify and resolve freight invoice discrepancies.

In such a scenario, shippers often wonder about the accuracy of freight payment to the shipping carrier. There is a constant worry if they have been overbilled or inaccurately billed. With freight audits, shippers get an accurate idea of their transportation costs. This blog article will focus on the benefits of freight audits. In addition, we will discuss freight audit and payment processes and their importance in logistics.

Freight Audit benefits

The purpose of freight auditing is to examine each freight invoice thoroughly. In addition, audits ensure the invoice conform to the details in freight contracts. A freight audit examines shipping rates, fees, weights, discounts, etc. and any mistakes in freight billing help shippers resolve the issues with the shipping carriers.

Freight audits have numerous benefits. The primary of them include:

  • Optimizing business operations with meaningful data
  • Reducing shipping expenses
  • Increasing visibility on transportation spend
  • Avoiding unexpected surcharges
  • Saving time for companies
  • Enhancing customer satisfaction
  • Ensuring compliance with regulatory requirements

In addition, freight audit services can request corrected invoices for overcharging. For more benefits of freight audits, you can read our earlier blogs here and here.

Now that we know the benefits of freight audits. Let us discuss-

Freight Payment process

The shipper makes a payment after a freight audit determines the accuracy of a freight bill. It is known as freight payment. However, if there are errors in the freight bills, the shipper may pay the amount after billing adjustments.

The freight payment process starts with a carrier invoice receipt from the shipping carrier. The freight invoice validation is by verifying the invoice data. For example, cross-checking the customer invoice number, purchase orders, bill-of-lading (BOL), etc.

Further, conducting a freight audit ensures

  • Accurate freight rates and surcharges
  • Applicable discounts
  • Invoice number matching customer or shipper data
  • Correct freight weights
  • Shipping addresses are correct

Inaccurate freight costs are a part of the exception management. Further, the freight payment is by the agreed method to the shipping company. During payment, there is an accounting of cost allocation in the ledger. Data capture is helpful for future freight payments. It helps in understanding ways to improve the business.

What is the Freight Audit and Payment process?

It is the auditing and payment of freight bills. Many Freight Audit and Payment (FAP) software are available for shippers to use in-house. But, it requires intense training of resources for optimum use. However, outsourcing Freight Audit and Payment (FAP) process to FAP service providers can strengthen the supply chain operations of businesses.

Freight Audit and Payment processes use automated systems and Business Intelligence tools. Automating invoice receipts eliminates paper documentation and filing. It allows accurate audits and efficient, detailed cost allocations. Freight audits can identify duplicate fees and verify the accuracy of freight charges. It can keep track of freight carrier performance and compliance according to the contracts.

Further, Business Intelligence tools analyze data to help shippers reduce transportation costs. It provides visibility for companies to improve their shipping processes. It looks at the freight invoices minutely down to each order line-wise. Consolidating freight invoices also helps in reducing transportation costs for shippers.

Audintel provides the most comprehensive “Line-Item” invoice freight audit for its clients. Our actionable, agile platform and customizable dashboards provide freight data to shippers. Enormous information in graph representations and shipping reports is easy to understand. Businesses use the freight data to streamline their shipping operations and save money.

What impact does Freight Audit and Payment have on Logistics?

Transportation of goods from one point to another requires effective management. Different transportation modes, such as road, rail, sea, and air, are available for freight shipments. Fuel prices, labor costs, route efficiency, and many factors influence transportation costs. Moreover, geopolitical events and economic conditions disrupt transport operations, affecting shipping costs.

The digitalization of transport operations can control transportation costs. Intelligent transportation management systems can track shipments in real time. It can minimize detours, reduce last-mile delivery time, and reduce shipping expenses. Further, Transportation Management Systems (TMS) increase full-load shipping by load planning and vehicle capacity management.

Logistics payment optimization is necessary for fast and efficient supply chain operations. Freight Audit and Payment systems improve freight operations efficiency. It automates invoice processing, payment, and transportation invoice reconciliation. Freight invoice auditing provides cost-saving opportunities to companies. Shippers can monitor and measure their Key Performance Indicators (KPIs), such as service levels, delivery time, etc. Freight Audit and Payment processes provide insights into a shipper’s freight spend.

Freight payment processing is possible by Freight Audit and Payment process. It validates carrier invoices against agreed terms to ensure compliance. Freight audits provide insightful analysis of freight data to stay ahead of competitors.

Audintel’s Freight Audit advantage

Our latest technology scrutinizes past and present freight invoices for any mistakes. We also oversee any deviations by carriers from the agreed freight rates, discounts, and accessorial charges in freight bills. Our intuitive dashboards customize shipping reports for clients. Freight Audits with stronger carrier relationships avoid delays and disruptions during shipping.

Audintel’s systems provide real-time visibility of transportation costs. Businesses can make informed decisions about their shipping spend. Our next-generation automated platform audits freight invoices against any unwarranted charges. Shippers get easy access to shipping data to improve their backend processes. We understand a business’s needs and its logistics inefficiencies.

Final remarks

In Logistics management, financial data analysis is vital. It includes information regarding payments, transportation, warehousing, and more. Effective financial management is necessary for greater profitability and operational efficiency in logistics. The logistics industry is constantly trying new ways to control expenses with efficient movement of goods.

Freight Audit and Payment systems provide cost-effective opportunities to logistics businesses. The FAP system prevents financial discrepancies and strained relationships with shipping carriers. Freight audits thoroughly review freight invoices for errors and facilitate prompt payment processes. In addition, FAP systems optimize transportation strategies, comply with regulatory requirements, and resolve disputes with carriers.

Businesses partner with Freight Audit and Payment service providers that provide up-to-date solutions. FAP services use advanced technology that uses data analytics and reporting capabilities.

Audintel has the expertise and state-of-the-art technology to handle freight bill audits and payment processes. We understand your business needs, including the complexities of freight expense management. Our skilled freight auditors help claim refunds from shipping carriers due to inaccurate billing. Audintel’s services streamline the freight audit process for businesses without any hassles.

If you are curious about how we handle freight audits and payments, call us at +1 (619) 354 8539. In addition, our Audintel website gives information on freight auditing and other services.