Evaluating the true value of your freight audit payment company

 Freight audit payment companies offer more than cost savings: Why businesses should assess visibility, compliance, and carrier performance.

When businesses look to evaluate freight audit payment companies, they often zero in on one goal: Cost savings. However, while reducing costs is critical, it should not be the sole factor that defines the value of freight audit payment companies. 

The changing landscape of logistics demands a shift in strategy — one that emphasizes a more comprehensive assessment, encompassing not just savings but improvements in overall operations, visibility, and compliance. 

In this blog, we will explore why it is essential to look beyond cost-cutting and develop a more holistic framework when selecting a freight audit partner.

Move beyond traditional focus on cost-savings

For years, businesses have been laser-focused on cost reduction as the ultimate benchmark when evaluating freight audit payment companies. With thousands of invoices and freight payments processed daily, it's easy to see why billing errors, overcharges and recovering excess payments have been the primary concern. But in an era of global disruptions, where the smallest delay can ripple into a supply chain disaster, focusing solely on cost is no longer enough. 

Picture this: Ports worldwide are at a standstill. Freight rates are skyrocketing overnight, from $3,000 to $20,000 per container. Ships are stuck in the Suez Canal, blocking 12% of the world's trade, while containers pile up in the Port of Long Beach, leaving companies like Accuride with hundreds of containers sitting idle, incurring detention and demurrage fees daily — and with no visibility into the situation. 

This isn't just frustrating. It's crippling. 

Now imagine your business is in a storm. You are unable to track your shipments and are left in the dark about where your products are or how much it's costing you. This is a reality that Accuride faced in 2021. Their logistics team was drowning in a sea of outdated communication — phone calls, emails, and manual spreadsheets — trying to chase down shipping reports while the cost continued climbing. 

Does this sound like a company that's simply worried about cutting costs? Not anymore. 

The perfect storm of supply chain issues during the pandemic revealed something far more crucial — the need for visibility. 

Enter Pando, the freight audit and payment technology provider that changed everything for Accuride. Gone are the days of blindly paying 72 different freight charges, that too without verification or choosing carriers based on outdated routing methods. 

Gaining real-time visibility into every shipment, the team at Accuride could finally make a note of each container and where it was, pinning it down to the exact longitude and latitude. 

No more "it's on a boat somewhere." Now, they have milestone-driven updates, automated alerts and the ability to validate every freight charge in real-time. They didn't just stop overcharges, they optimised their entire shipping process — reducing accessorial fees by $500 per container, moving 3,000 containers per year. It's an understatement to say the savings were significant. 

But not everything boils down to saving money — it's about saving time and resources and gaining visibility. Having full freight visibility, invoice management and seamless communication enabled Accuride to focus on what mattered — delivering for their customers and keeping their operations smooth. 

The lesson here? Focussing on cost alone is a trap. 

If businesses don't adopt a holistic approach to freight audit and payment, they risk missing out on the bigger picture. Visibility, real-time data, and optimised operations aren't just luxuries — they're necessities in today's volatile world. 

At a time when supply chain chaos can strike at any moment, will your company be prepared? Or still be stuck in the past, fighting to recover pennies while your profits slip away? These are surely questions that should be pondered over. 

The choice is yours. But if Accuride's story teaches us anything, it's that spending on visibility is the key to staying ahead of the storm. 

To further explore strategies for reducing freight costs while enhancing your overall logistics efficiency, see Pando's insights into reducing freight costs.

Expand the evaluation framework

Today's businesses need to shift their focus to a broader range of metrics when assessing the value of freight audit payment companies. Instead of concentrating purely on immediate savings, companies should evaluate the broader, long-term impact on logistics and ensure their logistics partner provides strategic insights into operations. 

A comprehensive framework should include assessing operational efficiencies, supply chain performance, and compliance efforts. For instance, assessing how well a freight audit payment company helps in optimizing route planning and carrier performance can reveal its long-term value creation and result in a more streamlined and cost-effective logistics operation. 

Additionally, companies must ensure their logistics partner provides strategic insights into operations. This includes detailed data analytics and reporting to offer actionable recommendations. 

As noted by the Council of Supply Chain Management Professionals (CSCMP), effective use of data analytics can lead to better decision-making and a more resilient supply chain.

Key metrics for a holistic evaluation

A comprehensive evaluation of freight audit payment companies goes beyond just looking at cost savings. To truly maximize value, businesses should focus on specific metrics with key areas:

Supply chain visibility

Enhanced supply chain visibility is one of the most significant logistics audit benefits. Here's a list of the key metrics to consider.

• Shipment tracking accuracy: Ensures that shipments are accurately tracked across carriers, lanes and regions, minimizing delays and optimizing routes.
• Data integration: Evaluates the company's ability to integrate data from various sources for a cohesive view.
• Reporting and analytics: Assesses the quality and stability of reports, including real-time dashboards and historical data analysis, to provide actionable insights.

Carrier performance improvement

Beyond financial analysis, it's crucial to evaluate how well carriers perform. Consider these metrics:

• On-Time Delivery Rate: Tracks the percentage of shipments delivered as scheduled, which directly impacts customer satisfaction.
• Invoicing Accuracy: Measures the precision of processed invoices, highlighting discrepancies and reducing errors.
• Service Quality: Assesses overall carrier performance, including damage rates and customer feedback, which are vital for maintaining strong partnerships.

Compliance adherence

Ensuring that shipping operations with various regulations is essential for avoiding costly disruptions. Important metrics include:

• Regulatory compliance: Verifies adherence to local, national, and international shipping regulations, safeguarding against legal issues.
• Penalty avoidance: Tracks the frequency and cost of penalties due to non-compliance, highlighting areas needing improvement.
• Audit trail: Evaluates the thoroughness and accessibility of audit trails, ensuring transparency and accountability in all transactions.

Understanding the role of data analytics and reporting

Once you have clarity on what to consider in your freight audit payments, it's time to delve into the critical role that data analytics and reporting play. Today's leading freight audit payment companies harness the power of data to facilitate better decision-making. 

Companies with robust reporting capabilities provide businesses with deep insights into their logistics spending, helping them identify trends, pinpoint inefficiencies and optimize carrier selection. By utilizing advanced analytics, businesses can transform raw shipping data into actionable insights. 

This process enables operational improvements, reduces risks and enhances overall supply chain efficiency. With the ability to predict shipping costs, optimize route planning and drive strategic initiatives, data analytics empowers businesses to meet their long-term goals more effectively.

Why a holistic approach is the key

To maximize the value of freight audit payment companies, businesses must move beyond short-term cost savings and embrace a holistic evaluation framework. 

For instance, consider a company that focuses solely on reducing shipping costs but neglects to assess carrier performance. Over time, this oversight could lead to delayed shipments, dissatisfied customers, and ultimately, higher costs due to lost business. 

One example is Nivea, where Neha Parekh, Director of Supply Chain, emphasizes the impact of automation on their freight audit payment processes. 

By partnering with Pando, Nivea automated functions like payment processing and Proof of Delivery (PoD) tracking, significantly improving accuracy and efficiency while reducing manual errors. This technology-driven approach not only enhanced supply chain visibility but also strengthened compliance adherence, fostering stronger relationships with carriers who value the reliability and consistency that automation brings. 

This example highlights the importance of adopting a comprehensive evaluation framework. Supply chain visibility, carrier performance improvement, compliance adherence, and data analytics should not be seen as isolated elements but as interconnected components that collectively contribute to the overall success of a freight audit strategy. 

By looking beyond immediate savings and embracing this holistic approach, businesses can unlock long-term value, drive operational excellence, and ensure sustained growth.

Wrapping up

As businesses adapt to changing times, they must evolve their evaluation methods to maximize return on investment and achieve long-term sustainability in their freight operations. By adopting a more comprehensive assessment framework, companies can unlock the full potential of their freight audit payments and elevate their logistics performance to new heights. 

It's time to move beyond basic cost-cutting. Elevate your logistics strategy by partnering with a freight audit company that delivers comprehensive value across your supply chain. Pando's innovative solutions are designed to drive full spend visibility, optimize operations and maximize efficiency at every step. 

Ready to take charge of your freight spend management? 

Schedule a demo with our experts today.