Freight Bill Auditing 101

If you ship goods anywhere on a regular basis, chances are you’ve done your best to keep a tight lid on shipping and freight costs by choosing a reliable and trusted stable of carriers, and negotiating a tariff or rate schedule custom-tailored to your organization’s needs.

With those measures in place, along with random or occasional monitoring of freight bills, you probably think there’s not too much room for billing problems. Not so.

Despite the well-intentioned efforts of your carriers and your detailed tariff agreements with them, many thousands of dollars can be slipping through your fingers because of very common freight bill errors — mistakes that DTA typically finds by auditing your invoices using automated processes.

Generally, freight bill errors fall into two categories — over-billing and duplicate invoices. The most common are what we call “per agreement” errors. That is, the freight bill is not in accordance with the negotiated rate you have with the shipper. For example, you may have negotiated a $100 tailgate charge and, for whatever reason, the carrier charges you $101 or more. Sometimes, carriers will even forget to apply your discount and charge you the regular rate.

Another common error is simple human error on the carrier’s part. Human beings are keying data into invoices and they make mistakes. Instead of entering “100” into a data field, you get 1,000.

Other frequent errors revolve around judgment calls that should be in your favour. Fluctuating fuel surcharges, for example, may not be calculated correctly. Or, you may be eligible for a preferential rate when a shipment can be bumped to the next weight break using “as weight” rules. When it’s that close, your DTA client manager will go back to the carrier to get the better rate.

In our experience, errors can also vary depending on the mode of transportation. A greater number of errors seem to arise with Less-Than-Truckload (LTL) shipments due to the complex nature of LTL tariffs. Among some very well-known carriers, there can be double-digit LTL error rates. Courier invoices tend to be more reliable, though duplicate invoicing and errors relating to service levels, such as guaranteed delivery time, are not uncommon.

Our automated system catches these issues, and we work closely with each carrier to report the nature of the error and recover any funds, if needed. To learn more about our auditing services, please speak directly to a DTA Client Manager.

Transportation and Logistics Departments: We provide your logistics team with data and reports on shipping patterns and associated costs, including: origin and destination; drop ship locations; actual weight; cube weight; customer or supplier name; transfer between locations and/or warehouses; and any other industry specific fields clients require.

Please call or email us with any Logistics Management questions:

Tel: 416.487.3311 or info@dta.ca