Freight Payment is dead

Rolf Bax

Rolf Bax

January 30, 2019 - 11:42

 

It is official. With yet another freak fraud affair in the Freight Audit & Payment business where a company, IPS Worldwide, managed to defraud customers for more than 100 million dollars. Freight Payment, a business niche within logistics that exists for over 50 years has long been relied on by many shippers worldwide. Especially in the US the payment side of this service has been very important. This service has to come with checks and audit to ensure that the correct invoices are paid but payment has been the real money maker. That is why long ago banks got involved and later also private entrepreneurs who were attracted by high float margins. Unfortunately the Freight Invoice Payment market has a huge flaw, it is not regulated and payments are not secure. And so it happens that companies can pay service fees for payment handling and audit for let’s say 100,000 dollars per year but at the same time run 100 million dollars through their accounts. That.is.insane! And funny part of the business is that many corporate managers have no clue about logistics, let alone the freight payment business. And somehow believe that money is in good hands. Once again: the Freight Payment market is NOT regulated. Don’t give middlemen the money to pay your carriers. It is a very risky business model not withstanding bonds, and securities and insurances you can require from your provider.

At ControlPay we do only audit and want to be the best at it. Give customers valuable insights, visibility and business intelligence. That is the modern interpretation of Freight Audit & invoice Payment. We stopped doing payment a while ago. Many of our peers in the industry that truly care about the Freight Audit or Freight spend management market feel that payment is not a value added service anymore and they rather not offer it.

What has happened now with IPS is for sure not the first fraud affair, read about Trendset Transvantage here https://bit.ly/2sTE7au, cases as recent as 2013 where many large multinationals suffered. It may also be not the last affair.

Again the very unfortunate IPS case shows that large corporates should not rely on unregulated providers to pay invoices to carriers. You can outsource audit and this complexity can only be handled by Freight Audit providers but is it not time to get your affairs in order and just pay your own invoices? You will run less risk and you may save quite some money.

 

About ControlPay Global Freight Audit and Payment
ControlPay is the largest freight audit provider in Europe. Since we started our company 17 years ago, we are very much focused on the logistics data. This approach has led to a very tight process and 100% waterproof audit whether it be pre-audit, post-audit or self-billing. Customers know that we will always go to the bottom of an issue and that we are very driven to rule out any repetitive issues. This is also driven by the fact that we try to make processes as efficient as possible, low touch for all parties involved and we are very pro-active in signaling points of improvements as we see a mutual benefit to make processes more transparent and smoother.

How does ControlPay deliver the most robust Freight Audit Software worldwide? Check us out online!

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