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Make Smarter Shipping Decisions with a Freight Audit
Usually, if you hear the word "audit," it's time to grab some aspirin (or maybe something stronger). However, a freight audit can lead to cost-corrections and insights that help small and mid-size businesses (SMBs) balance the budget and even operate more efficiently.
If you're looking for ways to master transportation costs, shave time off shipping operations or make smarter logistics decisions, read on to see if you could benefit from a freight audit.
What is a freight audit?
Depending on the shipper's needs, a freight audit can include anything from a review of carrier invoices to an end-to-end assessment of your shipping operations. In general, an audit provides transparency – a better understanding of how carrier services line up to your freight needs. If what you're shipping and how you're shipping it don't line up to what's on invoices or your business goals, it's time to pivot.
When examining invoices, it's important to check for line-item accuracy, unnecessary costs and optimal service selections. When expanding a freight audit beyond invoices and carrier services, you should make sure the people and processes turning the gears of day-to-day fulfillment sync with your shipment needs. For example, you may need to improve item packaging to fit shipping requirements, prepare shipments at a different time of day or consolidate small packages into less-than-truckload shipments.
To summarize, the goal of a freight audit is to turn observations into cost- or time-saving opportunities hiding under your nose. Among others, outcomes may include:
- Streamlining internal processes
- Identifying inaccurate charges on invoices
- Recognizing ideal services for shipments
- Finding less expensive ways to ship without impacting delivery times
Benefits of a freight audit
Beyond rectifying invoice errors that lead to overcharging, sometimes simple changes are the most impactful. For example, by looking at the carrier services you use most often, you may discover that expedited shipments to a customer 100 miles away can make it there on time with a more economical ground service. The best part is that you are in control of these changes. In times when it's difficult to negotiate rates – when carriers hold all the cards, or a shipper doesn't command a volume discount – a freight audit empowers shippers to keep costs healthy and under control.
A freight audit can do more than reduce money going out. It can help increase money coming into the business, too. How? Finding the sweet spot for product pricing is a challenge for many shippers. But through the audit, you can create a more informed, strategic price tag. You'll have a firm grasp of costs per carrier, less-than-truckload (LTL) versus full truckload (FTL) comparisons and costs per shipping lane. You can break down shipping costs for individual customers based on their respective delivery addresses and volume needs – helping you establish mutually beneficial discounts. You may even uncover opportunities like utilizing volume LTL or partial truckload.
A freight audit helps on the e-commerce side of your business as well. If you didn't know already, many businesses offering free shipping are actually building shipping costs into product pricing. With a greater understanding of costs through an audit, you too can price items to cover transportation without overcharging – striking the perfect balance between profitability and covering overhead.
Who does freight auditing?
Anything that reduces costs and lessens the dent shipping puts into a business' overhead is worth a look. Even better time management for small business shipping can have in impact on your bottom line and decrease dwell time. Depending on the scope, it can be a lengthy project difficult for SMBs to pull off while keeping the day-to-day chugging along. On the financial auditing and bill pay side of a freight audit, there are dedicated vendors available. Their expertise and niche technology can speed up invoice processing.
For a more holistic view, a third-party logistics (3PL) partner like Worldwide Express connects the dots between shipping operations and what's on the bill. With a team of experts, we make sure that shippers identify every opportunity to reduce costs and cut down on processes.
Reap the benefits of freight audit savings
If you're wondering how to kick off a freight audit, it's time to talk to experts. Let's connect on building a freight audit plan and finding opportunities to work smarter in the shipping department.