The only things scarier than a potential trade war is an actual trade war. And, unfortunately, the United States looks to be heading in that direction.
Last week, the United States proposed additional tariffs on $200 billion in Chinese goods coming in to the country. This, along with “tough talk” coming from the administration, as well as reciprocal actions taken by the Chinese, puts us firmly in a state of trade war.
For an industry that is already experiencing increased costs, lower supply of drivers, and greater demand, shipping is not in a position to absorb an additional cost such as tariffs. The Port of Los Angeles, for example, expects these new tariffs to affect 15% of all cargo it processes.
While many people were skeptical about how realistic a trade war would be, things have escalated quite quickly. As a result of tariffs, it’s clear that dramatic shifts in trade flows will very likely have an impact on logistics cost-structures.
As markets like China become more expensive to penetrate and trade with, trade flows will migrate domestically, or to markets with lower tariffs. Additionally, shippers will have to be able to better identify which modes, regions, and carriers are the most efficient and cost-effective for their needs. In order to accomplish this, shippers need both greater access to granular-level analytics, as well as a system for intensive freight auditing.
In a time of increasing shipping costs, particularly involving import tariffs, having a robust system for freight auditing is imperative. Tariffs and other fees applied at customs are some of the most important items that must be flagged as part of an effective freight audit.
Freight auditing, when done manually, can be a labor intensive and expensive proposition.
So why invest in freight auditing at all? One number sums it up: 80%
Up to 80% of all shipping invoices have some sort of discrepancy. That means that, without an audit, shippers stand to lose potentially hundreds of thousands, if not millions, of dollars. Coupled with the advent of trade tariffs, freight auditing is more important than ever.
5 Things to Look For in a Freight Audit Provider
1. Technological Innovation & Development
In today’s world, technology changes quickly. The question to ask yourself when choosing a solution for freight audit should, first and foremost, be if the provider committed to investing in the technology as needs and requirements change? Does it have the necessary resources to do so moving forward?
The provider you choose for should be leveraging technology, as much as possible, in order to provide your company with the best and most robust freight audit as possible. This includes having a cloud-based platform rather than relying on manual processes, as well as constant updates to that system that continuously provides you with new and innovative features.
2. BI & Analytics
The devil’s in the details, as they say.
Having the most granular-level view of your business’ shipping data is the best way to make sure that you are maintaining an efficient supply chain. However, seeing data is not sufficient – you have to be able to interpret that data in a meaningful way, turning it into real business opportunities and effective strategies.
Data points that should be analyzed include:
- Shipping Network Efficiency
- Accuracy of Carrier Billing
- Real-Time Transportation Costs
- Performance of Specific Carriers
3. Experience and Stability
The freight industry is complex, ever-changing, and requires a deep understanding in order to navigate its minutiae. Working with an upstart provider brings with it unforeseen risks that may affect your ability to fully capitalize on the cost-saving opportunities of a robust freight audit.
Look for a provider that has both quality technology as well as significant experience within the freight industry. In doing so, you will be able to get the best of both worlds.
4. Ability to Support All Modes
We live in a world in which, in order to fully optimize your supply chain, businesses often leverage a variety of transportation modes for their shipping. As such, any freight audit provider that only focuses on a single mode of transportation is not going to provide you with the full service that you need.
Any freight audit provider you are considering should have the capability to handle all modes of transportation your company might use, as well as the ability to view all data in one central location.
5. Strong Carrier Relationships
Carriers, both large and small, form the back bone of the transportation industry. When dealing with freight audit, a provider with extensive and long-lasting relationships with carriers will enable you to fully maximize and streamline your freight audit process. By leveraging these relationships, a freight audit provider will be able to more easily and quickly reduce costs and help reconcile accounts.
Intelligent Audit provides its clients with a global, all-mode transportation audit, recovery, freight payment, and business intelligence reporting partner.