Disruptions have been ongoing for many shippers, and with a new round of global COVID outbreaks and resulting lockdowns happening all over again, it is more of the same. Freight audit data has long been a critical pillar for shippers dealing with domestic and international parcel shipping. With major ports such as Shanghai locking down, ocean congestion is only likely to worsen, leading to higher freight charges and more issues with supply shortages.
Reuters reported a survey in early March 2022 revealing, “COVID-19 has hurt up to 93% of local small and medium-sized companies, with many suffering production disruptions because of shutdowns, interruptions in supply chains, and delays in order executions.” Furthermore, industry experts predict that the Shanghai lockdown will severely hurt transportation services worldwide and increase the need for more robust and in-depth freight audits and reviews. It also requires an answer to the question- what do you mean by freight charges?
The best way to manage these uncertain times that seem too familiar is with actionable analytics and a firm understanding of freight charges’ meanings. Additionally, shippers and transportation service providers must understand critical supply chain trends and be highly attuned to their impact on daily operations.
A Review of Common Freight Charges
A solid freight audit and expense review can offer valuable and personalized freight insight that helps shippers manage and track their expenses. Good transparency and high freight visibility within the supply chain network are more important than ever. Understanding freight charges comes naturally with a firm grasp of standard terms that often come up during shipping.
- Consignee Collects – Consignee buyers pay all freight charges upon delivery confirmation. They are also responsible for filing any taxes and filling out customs and legal forms.
- Third-Party Charges Listed – Third-party members handle paying freight charges for sellers, and those services come at a cost.
- FOB Destination and Freight Collect – Another example of freight terms under the FOB Destination is the title for goods passed to the consignee. They are also fully responsible for paying all fees and freight costs.
- Peak Surcharge – Typically assessed around the holiday season, carriers have also widely used this surcharge since spring 2020 to account for above-average demands.
- Fuel Surcharge – Fuel surcharges are listed according to the most recent EIA reporting and how those costs affect total transportation spend.
- Accessorials – These may include fuel surcharges and a host of other charges associated with each load, including special equipment and handling costs, possible detention, demurrage, and dwell time or per-diem costs.
Of course, this is not a complete list, and exact charge terms may vary widely between carriers. Ultimately, it’s important to know what is what to ensure your team and auditing solution make apples-to-apples comparisons without getting lost in the data.
How a Freight Audit Provides Insight Into All Freight Costs
One of the most critical aspects of freight costs management is maintaining a single source of truth and solid insights into budgeting and predictive planning. Understanding how this offers insight into freight costs and financial concerns is critical for continued growth and success within the uncertain marketplace today. Auditing services offer freight insights in the following ways:
- All-in-one source for information.
- Clear connection to industry experts.
- Faster onboarding and integration.
- Streamlined management process through actionable analytics.
- Better control over freight costs by using different modes, zone skipping, or hub injection as necessary.
- Industry-focused guidance and direction.
Managing freight charges and fees is much easier with a custom freight audit check and better insight provided by industry experts. Freight network optimization remains accessible with the right service provider.
Additional Benefits of More Insight Into Shipping Costs
The more visibility shipping companies and logistics managers have into freight charges, and the more focused their freight audit services, the more benefits they will likely receive. Some of the most common include the following:
- Knowing what lanes and modes to use for each load and customer.
- Determining when to leverage zone skipping in parcels for faster delivery.
- Learning when to tender freight and use other specialized services.
- Choosing the suitable carrier and driver to handle specialty freight loads.
- Understanding hot versus cold markets to balance costs and profits.
- Access to an audit advisor and industry expert when and where needed.
- Overall improved relationships with customers and third parties.
With improved insights and high visibility into freight market trends and costs, shippers and carriers alike can establish and maintain mutually-beneficial relationships for the short and long term, especially in light of new COVID variants and related supply chain impacts.
Know What’s Right for Each Shipment With Intelligent Audit Insight by Your Side
Staying on top of freight charges can be difficult even in the best markets. Knowing what services and methods are suitable for each shipment with freight audit services and actionable analytics. Industry experts can make it easier for shippers to manage this critical financial aspect of their business by giving them precise data. Applying data-backed strategies make comparing apples to apples fast and easy. Now more than ever, with a new wave of global shutdowns and disruptions threatening the already delicate recovery process, you need an industry leader by your side. Contact Intelligent Audit today to get started.