Evaluate your freight audit company’s effectiveness and ensure that you have chosen the right one to optimize your supply chain, reduce costs, and improve efficiency.
A freight audit is a necessary process that gives you actionable insights to streamline the logistics process and reduce freight costs.
It is safe to say that the performance of freight audit companies determines your organization’s growth in the long run. So, it is necessary to assess the performance of your freight audit partner from time to time and see if they meet your current needs.
The first part of doing that is knowing what to look for and understanding the potential pitfalls of partnering with an ineffective freight audit provider.
Certain red flags can indicate that a provider is running a subpar performance. You can watch out for the following ones while selecting and evaluating a partner:
| Issue | Impact |
| Frequent invoice errors | Billing disputes, payment delays, and a loss of trust with your suppliers and carriers. |
| Delayed payments | Put a strain on your relationships, potentially causing service disruptions. The ripple effect can impact your supply chain, affecting delivery times, product availability, and overall customer satisfaction. |
| Slow dispute resolution | Slow down operations and increase the workload for your team. Ultimately leads to frustration and dissatisfaction among your staff and suppliers alike, hindering smooth business processes. |
| Poor communication | Misunderstandings and inefficiencies. |
| Non-compliance with regulations | Costly and harmful to your business's reputation. |
The right logistics partner can deliver significant value to your business. But how do you pick the ‘right’ one?
This is where you need to stay informed about industry standards and ensure your logistics audit company is effective enough to the best possible value for your investment.
A skillful freight audit company can significantly impact your bottom line by identifying and recovering overcharges, ensuring accurate invoicing, and optimizing your transportation costs. To help you evaluate the effectiveness of your current provider, here’s a checklist with several key performance indicators (KPIs):
1. Invoice accuracy
2. On-time payments
3. On-time delivery performance
4. Dispute resolution time
5. Cost per mile
6. Carrier scorecards
Beyond the metrics
While these KPIs provide valuable insights, it's also essential to consider qualitative factors:
By carefully evaluating these factors, you can select a freight audit company that delivers excellence and helps you maximize your transportation efficiency and cost savings.
Apart from these factors, you can also ensure there are no overpayments at your expense. That brings us to the next step in choosing your freight audit company: calculating the true cost of freight audit, including hidden fees and lost opportunities.
While calculating the costs of freight audit companies, there are cases where you might miss out considering the hidden fees and potential lost opportunities that can arise from an ineffective logistics audit provider.
For instance, it is wise to be aware of potential hidden fees, such as penalties for late payments or additional charges for certain services, along with missed savings opportunities, if an unreliable provider fails to identify overcharges or errors.
Not to forget calculating ROI by comparing the savings realized to the total cost of the audit service and evaluating the long-term benefits of improved supply chain efficiency, reduced costs, and enhanced data insights.
Considering these factors can help you make an informed decision about your freight audit provider. If there’s a ‘no’ to any of these questions and you feel your provider is lagging on industry standards, there is still a way to ensure that you're getting the best value for your money. And that is to renegotiate a contract with your provider.
Even if you’re not always looking to renegotiate terms as you’re happy with the performance of your freight audit provider, it is always a good practice to regularly evaluate things.
Regular performance evaluations are not an option but a necessity. They are a strategic tool that can help you:
By incorporating regular performance evaluations into your overall supply chain management strategy, you can not only identify but address opportunities to ensure better performance and reduce your transportation costs.
Take control of your freight spend with automation
With rising costs of the supply chain, especially with carriers and freight, more organizations are transitioning the freight audit and payment in-house taking strategic control with the help of freight audit and payment automation platforms like Pando.ai.
Pando.ai equips you to take complete control of your freight spend management with the following functionalities powered by AI and ML:
With Pando.ai, take 100% control of your freight spend management with
Do you also want to join the list of organizations that are taking control of their freight spend management? Schedule a demo with the experts at Pando today.