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Shippers face an uphill battle in the throes of a turbulent freight market. Challenges are manifold, from volatile fuel costs to customer expectations of fast, low-cost service. Add to that a critical driver shortage in the US, surpassing 60,000, and shipping rates rising to an unprecedented fivefold their pre-pandemic levels, or even higher. The ripples of disruption spread far, instigating severe scarcities in vessel space, container availability, and intermodal capacity. Reliability, both on land and at sea, has taken a nose-dive, hitting an all-time low.
It's a challenging scenario with no signs of easing. Further aggravating the situation is the downfall of numerous carriers, ranging from major players like Yellow to smaller local entities. With a volatile blend of unpredictability and susceptibility, every shipment nowadays is a high-risk gamble in a progressively erratic market.
Now more than ever, the lifeline for shippers in this storm lies in the precision of freight auditing and accurate invoicing. These are not just back-office tasks but essential pillars for financial stability. As Intelligent Audit CEO Hannah Testani told Inbound Logistics, “The freight bill sits as the culmination of every other piece of transportation information…The bill provides the complete story of a shipment.”
This article will explore this idea even further.
The recent halt in operations by Yellow Corp, a dominant player in the U.S. trucking sector, has sent shockwaves through the already strained freight industry. This development and the closures of other carriers underscore the urgent need for robust freight bill auditing solutions to ensure financial stability amidst market turbulence.
Yellow Corp, a prominent figure in the U.S. trucking sector and the country's third-largest less-than-truckload company, recently ceased its operations. Even though the company narrowly averted a debilitating strike due to overdue pension and healthcare fund payments, it was too little too late. Yellow long struggled with financial instability and teetered on the edge of bankruptcy; despite its historical influence spanning nearly a century and a 30,000-strong workforce. Its abrupt closure has shocked an already strained market, amplifying fears of significant job losses and potential ripple effects on supply chains.
Major carriers beyond Yellow have also felt the pain of the industry's struggle, with companies such as FreightWorks Transport, Pehler & Sons Trucking, Dillon Logistics, LME, Starlite Trucking, ALA Trucking, Williams Trucking, and Falcon Transport falling like dominos. Even industry veteran Howard Baer Inc. ceased operations after 69 years. 2022 also saw the bankruptcy of larger entities like Marvin Keller Trucking, LandAir, UFI Transportation, and Matheson Postal Services.
The closures weren’t limited to larger players — 2022 witnessed the fall of smaller companies like Freon Logistics, Navarro Trucking Group, and JCB Trucking Enterprises. These disruptions reiterate the necessity for freight audit software. By catching billing errors, resolving service issues, and monitoring carrier performance, this technology provides an essential buffer, upholding financial stability in a sea of turmoil.
Following the substantial wave of carrier closures, shippers are adrift in an even more volatile environment. The unpredictable onslaught of service disruptions extends from severe weather events to escalating cargo theft incidents, further compounded by human errors and unforeseen equipment failures. As the industry's instability grows, the pressure on shippers escalates. Shopify reports that 39% of brands predict enduring manufacturing delays and climbing shipping costs as prime challenges.
In the uncertain terrain of the shipping industry, freight auditing serves as an invaluable compass for shippers. It promises not just precision but also tremendous value by highlighting cost-saving opportunities amidst the ongoing turbulence.
Invoice errors in the freight industry are responsible for a staggering 61% of late payments. Furthermore, 11% of customers never even receive an invoice at all. It underscores the pressing need for businesses to dodge these pitfalls and lay stress on accurate invoicing. Not only is this crucial for maintaining financial stability, but it also serves as the cornerstone for effective cost and budget management. A well-managed invoice system fosters trust, enhances transparency, and contributes to a healthy business-client relationship—critical to surviving and thriving in the freight industry's challenging landscape.
That's where freight auditing steps in, acting as a safeguard against these financial pitfalls. By meticulously verifying invoices, freight audits identify and rectify billing inaccuracies. For businesses processing hundreds of shipments a week, such diligent oversight can significantly mitigate financial discrepancies, demonstrating the critical role of freight auditing in strengthening financial stability.
Freight auditing breathes efficiency into supply chains by enhancing carrier performance and utilizing key performance indicators to guide shippers toward informed decision-making. With optimized freight audits and payment processes, shippers can significantly reduce invoice costs, gaining a critical economic advantage in transportation operations. This process, in turn, cultivates a healthy cycle of continuous improvement and optimization in the supply chain.
Spotting invoice discrepancies is where freight auditing shines, swiftly resolving service hitches. With an eye for detail, freight bill auditing can recoup up to 5% of freight costs, turning overpayments into additional revenue. Consequently, freight auditing ensures transport costs mirror actual services, uncovering hidden savings and fueling business expansion.
In a world where efficiency equates to survival, advanced technology and automation now serve as the lifeblood of the freight audit process. By automating liability, tax accuracy, and duplicate audits alongside freight and accessorial audits, it's possible to glean broader visibility and rich data for strategic planning. It's no longer a futuristic concept but a tangible, real-time solution to freight bill auditing.
Consider Intelligent Audit, a global freight audit leader. They're redefining data application, utilizing their technology to consume, normalize, and analyze vast data volumes and derive valuable insights. In doing so, they enable shippers to optimize operations, lowering costs while reducing exceptions. It's a fresh standard in the freight audit field, facilitating data-driven decision-making and propelling the industry into a future fueled by smart technology.
As 2023 progresses, the transportation industry faces unique challenges, from fluctuating market conditions to increasing customer expectations. Amidst these shifts, the role of freight auditing continues to evolve, becoming an indispensable tool for maintaining financial stability and adaptability in the face of uncertainty.
The logistics industry continues to brace for softer volumes, lower prices, and intensifying business challenges. Over the past year, mergers and acquisitions have accounted for 40% of the value and 70% of the deal volume in FY22, and the average deal value YTD23 stands at only 60% of the previous years. Simultaneously, 91% of companies grapple with consumers' growing demands for all-inclusive logistics solutions, compelling a shift towards diversified services.
Amid a shifting market, freight auditing surfaces as a resilient, insightful ally, nimbly adapting to complex transactions and the imperative for accurate invoicing. Its methods, sharpened by artificial intelligence, swiftly pinpoint billing inconsistencies, bolstering audit accuracy and fostering financial protection. The true potential of freight auditing, however, lies in its adaptive capabilities to address emerging challenges. Shippers can unearth cost-saving opportunities through data from freight audits, discern future freight expenses, spot market patterns, and strategize efficient shipping paths.
Freight auditing has become vital in a market marked by carrier shutdowns and service disruptions. Its mission is clear: protect financial stability by ensuring precise invoicing and detecting billing errors. Yet beyond finances, it vigilantly monitors carrier performance, swiftly resolving service issues. And the secret weapon? Cutting-edge technology and automation to take the helm of these intelligent audit solutions, driving efficiency amidst a continuously transforming freight industry.
Shippers today seek more than just cost details; they desire insights from their data and a genuine partner that can help. As Testani asserts, "Companies come to us to take their complex transportation data and make sense of it." She couldn’t have summed it up any better. Leveraging robust freight audit software, Intelligent Audit transforms freight bill auditing. It navigates complex waters with solutions from business intelligence to machine learning, turning dense data into actionable insights for shippers.
As challenges arise, standing still is unacceptable. Explore how Intelligent Audit can drive your operations toward greater efficiency and financial stability. There's no better time than now - get started with Intelligent Audit today and step into a future of clarity and control in freight management.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
