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Transportation costs can represent as much as 15% of total revenue. To keep this expense in check, shippers need to pay close attention to their logistics processes, but that can cost a lot in human resource time — time that many logistics departments don’t have as companies increasingly run “lean” operations. Parcel intelligence software is an efficient and cost-effective way to ensure your company is paying what it should be for shipping, and to uncover other inefficiencies in your supply chain.

Step One: Parcel Invoice Audit

Grab the low-hanging fruit with a parcel invoice audit. Shippers are eligible for a carrier refund (usually for up to 180 days at least) on incorrect surcharges, late deliveries, and billing mistakes.

Done manually, parcel invoice auditing is tedious and time-consuming, which is why many companies make the mistake of not auditing their invoices. And, since your rates are likely based on a discount and include other incentives — not to mention accessorials — it can be difficult and complex to determine how accurate the carrier invoices are. Add to that fluctuating surcharges, such as for fuel, and calculating accurate shipment costs becomes very complicated.

It’s an easy and advantageous step to outsource that time-consuming complexity to parcel intelligence software. Here are some of the most common carrier errors the software will catch in auditing your small parcel invoices. Carriers can make billing mistakes for a number of reasons. Unless you audit every invoice, you’re likely to miss these errors — and miss out on getting that money back in your company’s pocket:

  • Duplicate invoices: This is one of the most common reasons shippers end up overpaying their small parcel carrier.
  • Late delivery: If a shipment arrives after the guaranteed date, the cost of shipping should often be waived.
  • Class levels: Sometimes invoices have the incorrect service or class level, which affects the amount billed.
  • Accessorials: These additional and sometimes discretionary costs are difficult to keep track of, and they are usually billed after the fact.
  • Fuel surcharge: Since fuel surcharges change often based on a weekly table, this is often misbilled.

Even though these and other types of errors occur frequently, carriers will not automatically refund the amount for their mistake. The field of play is not even. One team dominates control of the ball, and it’s not the shipper. For instance, if you as the shipper enter an incorrect or incomplete delivery address, it can be corrected easily by the carrier, but at a price per shipment — and you can be sure that cost will show up on your invoice.

But if UPS® or FedEx® delivers your shipment late, you have to first notice that error, and then file for the refund. You don’t get the ball unless you look for it and grab it yourself. And those costs add up.

Benefits of Auditing Your Parcel Invoices

Parcel intelligence technology makes sure that the amount paid on every invoice matches your agreement with the carrier and that you recoup every cent the carriers owe you — with minimal effort and cost. The return on investment of an automated parcel audit is almost immediate. The average cost savings vary based on a company’s shipping profile, but invoice audit will usually result in a savings of 5% or more per year.

Step Two: Up-level Your Parcel Shipping

The audit is only the beginning of the benefits of parcel intelligence technology. With best-in-class software such as TransImpact’s Parcel Spend Intelligence™ you gain control over the efficiency and cost of your whole shipping operation. Let’s look at six of the top features:

Parcel Spend Overview

Get an at-a-glance overview of your parcel shipping for quick parcel analysis, parcel cost management, and drill-down to in-depth audit of FedEx and UPS invoices with this main dashboard.

Actionable Insights

See on one screen all the stuff you have the ability to mitigate: savings opportunities, parcel billing errors, and risks. One TransImpact client found over $100,000 in savings from late payments alone.

Time In Transit

Go deeper with in-depth parcel analysis. See packages by carrier, service type, delivery time, and cost. Drill down to details such as sender state to receiver state. Use this tool to determine best sites for distribution.

Alerts

Get weekly email alerts based on “triggers” that you select. The most common parcel audit alerts are already built-in. Choose which ones to receive, and customize additional alerts to meet your company’s needs.

Dimensional Analysis

DIM charges are a big money-maker for the carriers. Use this tool to discover where dimensional adjustments are hurting your bottom line, so you can make changes and cut off or minimize that outflow.

Accessorial

Accessorial charges can be hard to find on the invoice, at times hidden only behind a code on the PDF. Use this tool to view as Sender or Receiver and get a clear accounting of accessorial costs.

Companies can’t afford to be inefficient and bleeding costs in any part of their operation these days. Parcel intelligence technology enables you as a logistics professional to remove cost and waste from your small parcel operation, while remaining true to your agreement with the carrier.

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Brian Byrd joined TransImpact in 2012. As EVP of Operations he helps ensure that TransImpact remains an industry leader in developing innovative technological solutions that help our clients to grow their companies.

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