Freight Payment News

A best-in-class freight audit and payment solution gives shippers the tools they need for effective transportation expense management. From easing the administrative tasks of invoice processing, to creating cost savings through invoice audits, to delivering actionable business intelligence, the benefits of an automated, best practice freight audit and payment solution are many.  Choosing a freight audit and payment provider is a strategic decision. Although many aspects of the solution are certainly tactical and task-oriented, the ability to deliver complex solutions and powerful business intelligence is not.

Since 1978, FPI has been providing freight audit and payment services.  Here is what we can offer your organization.

·         Expertise in all modes, including ocean, rail, parcel and multimodal

·         Experienced industry personnel

·         Processing and reporting for all move types, including outbound, inbound, third                     party, intercompany and more

·         Continuing commitment to software development

·         Detailed and precise business intelligence

·         Financial strength and stability

Contact us today for more information @ http://fpinj.com/contact.html

Once you have decided to outsource your freight bill payment function, it is time to begin a careful evaluation and selection process. Each company’s needs will be unique, but there are certain basic criteria against which potential freight bill companies should be measured.

Financial stability. Financial stability has become very important in recent years, particularly for companies paying billions of dollars in freight bills. The potential outsourcer should know how long the provider has been in business, and whether it has the resources to survive economic downturns.

Business experience. Research the provider carefully to determine its experience in the industry and with other outsourcers.  Research any customer testimonials from their website.  Google the company name for any web based information.

Commitment to technology. Providers should have the technology to take advantage of their own critical mass and provide the output you desire.

Management depth and strength. The provider must have a strong, skilled organization, as well as adequate, qualified management.  Request information on relevant industry experience of their top managers.

Reputation with other companies. The best substitute for personal experience is the experience of other freight bill payment outsourcers.  Ask for referrals.

Any company that ships product is familiar with freight bills and the process for paying them. Less understood is the industry that has been built around outsourcing these payment activities.  There several good reasons to outsource your freight bill payment function.  The most popular being the possibility of lower costs.  It costs a large company about $10 in fully allocated costs to pay one freight bill. If a freight bill payment company pays the same bill, the cost to the shipper is approximately 5 percent to 10 percent of the internal expenses. Add to this another 2 percent to 5 percent saved through the reduction in incorrect and/or duplicate freight bills, and the cost cuts can be significant.  The real value, however, is added through the business intelligence a freight bill payment provider generates. Even before the bill is paid, the freight bill auditor’s experience, combined with the latest technology, ensures that companies pay the correct rate, including accessorial and surcharges.  FPI is staffed with this same seasoned Logistics professionals and equipped with state of the art technology. 

The freight payment industry was actually formed by a series of Banks when the transportation marketplace was heavily regulated. Motor carrier bills had to be paid within 7 days and rail bills needed to be paid within 5 days. To meet this requirement the banking community, shippers, and carriers formed what was known as The National Association of Freight Payment Banks. At that time the emphasis was on settlement of carrier bills within the regulated parameters for credit extension. If settlement was not made, the carrier was required by law to place the shipper on a cash basis. This was not an idle threat and large Fortune 500 companies would often have the freight held because bills were not paid on time.

With Deregulation of the transportation industry in 1980 this began to change. Credit terms could be negotiated between shippers and carriers for more reasonable periods of time.

Deregulation also ushered in an era of unprecedented competition among providers of transportation services. The market was open and a free-for-all with carriers being able to compete based upon price for the first time. Previously, motor carriers had been compelled to set pricing collectively through rate bureaus. This frenzy of discounting presented an opportunity. Per statute at the time, a shipper could collect on an overcharge from a carrier for up to three years after payment of the invoice on which the overcharge was detected. There arose a cottage industry of “post auditors” who were former pricing specialists for major carriers. They would work on a contingency basis whereby they would collect 40-60% of all overcharges recovered by their auditing the last three years of bills.  If they recovered no overcharges, they were not paid.  Clearly, in today’s competitive environment, engaging experts to manage the payment and auditing of your freight bills can have a positive effect on efficiency and your bottom line.

In the 1985 small package carriers had 5 assessorials, today they have in excess of 40. It is a known fact that the motor carrier industry watches and learns from the small package carriers on what will work and what might not work. Well the motor carrier industry has learned that assessorials work and they can generate nice income from those extra charges.  Small parcel carriers claim that 50% of their revenue comes from assessorials.  Just look at your freight bill to confirm that statement, starting with fuel surcharges, along with weights and inspections right at the top of the list. One major motor carrier has stated that there auditing department of insuring they are capturing all assessorials has passed there rating department in size.  On the truckload side, detention time is being looked at and billed more frequently.

Combating these issues as a shipper takes time and some creativity, and maybe the help of bringing on a third party freight management company who has the experience to help reduce these expenses.

The discussion of packaging is another item taking center stage.  The classification system used by motor carriers averages 10% difference between class’s, what can you do to reduce the classification of your company’s product? One savvy shipper realized that shipping basket balls deflated made much more financial sense than shipping them inflated. Look how many more balls he shipped deflated rather than inflated. Look at laundry detergent, the change from water being in a gallon of laundry detergent to small condensed packages.

Experience the difference with Freight Payment, Inc.

• Avoid Carrier Over-Charges
• 100% Freight Bill Audit Down To The Penny
• Both Domestic And International Shipments/Transactions Supported
• Electronic Carrier Invoicing (EDI 210)
• 100% EXCEPTION RESOLUTION!
• Ad-Hoc Analytics
• Advanced Dashboard Technology
• All Transportation Modes Supported
• Bill Of Lading Match
• Client Specific Audit Rules Supported
• Carrier Remittance
• Effective Data Capture, 120+ Data Elements Per Transaction
• Key Performance Indicators (KPI’s)
• G/L Coding
• Monthly And Year-End Freight Accruals
• Scanned Imaging And CDs (Carrier Invoices And Bills Of Lading)
• Weekly Statement Billing

Implementation of an effective and efficient freight audit and payment process is essential, but is only the beginning. There are other valuable benefits to be derived, namely the capturing of accurate data and utilization of the data within the context of meaningful metrics reporting and Key Performance Indicators, aka. KPI’s. intended to support an organization’s ability to render sound business decisions on a day-to-day basis. In short, this is the value that Freight Payment Inc. has been providing to its clients since 1993.