Logistics Costs: 5 tools beyond traditional freight audit

Ken Klaver

Ken Klaver

August 1, 2017 - 16:09

5 Tools to control logistics costs

Controlling freight shipping costs is always one of the essential parts to maintaining the profitability of product lines for manufacturers and retailing companies. Many large organizations therefore, have an outsourced freight audit and pay solution in place. But how effective is this solution when unexpected shipping costs occur? Or how flexible is your provider when one of your departments is in need of clean cut transportation data?

In this blog, we highlight 5 must-have tools that shippers should look for beyond traditional freight auditing solutions.

1. Issue Resolution

We start with a process-based tool called Issue Resolution. Issue Resolution is a build-in function to answer questions about discrepancies. We register and monitor all the issues created on our system either by our staff, the carrier or the customer. These issues are connected to shipments and eventually to invoices. There are extensive KPI’s and reporting around issue resolution. This workflow centrally manages all the issues in data, overbilling and questions and clarifications that may exist. It will replace e-mailing.

2. Extra Cost Tool

Extra freight expenses. They often occur and keeping hold of the many, many possible surcharges is in many cases a burden. Therefore, we developed the Extra Cost Tool.

The purpose of this tool is to provide extra cost and spot price (one-off shipments) handling visibility and to speed up the process of non-contractual charges settlement between a Shipper and a Carrier. The advantages are numerous:

1. Client’s control over costs correctness: all ECRs are checked by Client, and can be either approved or rejected.

2. Speed up of the process for non-contractual charges settlement.

3. Several extra costs can be charged for one shipment via one ECR.

4. Spot price/Extra cost handling visibility:

  • Confirmation documents can be attached.
  • Each cost has its particular name. The list of extra cost names can be extended in case the most proper one cannot be chosen.
  • Visibility in reporting

5. The request for extra costs is valid during certain agreed period of time.

6. The request can cover ‘late charges’ identified after invoice was created/paid (debit note).

Extra freight cost tool business case

One of our global customers uses our extra cost tool to have the carriers apply for extra or unforeseen costs when they occur. In many cases, a transparent structure or solution for extra transportation costs / extra freight charges is not in place.

Because the structure of approval for extra costs was harmonized, structured and centralized globally the insight in the nature of the extra costs has led to a 30% decrease of extra costs cost requests.

Estimated saving: 1% of the freight spend

3. Bidding Tool

TESS (Tender Execution and Simulation System) is a web-based bidding platform available within our freight audit platform (or extern) It is the ultimate solution for tendering of spot shipments within the logistics industry for warehousing and all modes of transport.

Main TESS benefits:

  • Transparency and full control of the logistics purchasing decisions for non-contracted shipments.
  • The process is supported by an automated e-mail communication. Every action taken in TESS will be instantly reported to the relevant parties via e-mail.

Bidding tool case study

A global ControlPay customer has many ad-hoc urgent shipments that mainly have to be shipped by air. To make optimal use of availability with the forwarders ControlPay has built a tool that allows the carrier to launch single shipments bid requests within a very narrow timeframe on an urgent notice. Being able to compare spot shipments without having to just select a carrier based on a rate agreement gives flexibility and allows to make use of available capacity. Carriers are able to be competitive on business they otherwise would not have access to.

Estimated saving: 2% of the freight spend

4. Freight Tender data simulations

A large chemical manufacturer uses ControlPay to simulate new tender quotations against old rates and historical data. To see the true costs based on transportation cost and accessorials based on lanes, countries, sites, end customer has helped this customer to make the right decisions in order to find the parties that truly deliver the best cost for the best leadtimes and quality.

Estimated saving: 2% of the freight spend

5. Online freight invoice creation tool

The final tool in this blog is the free of charge freight invoice creation tool for carriers on the ControlPay platform. Based on the billing instruction the carrier is able to easily create his own invoice online in our freight audit software. This is an optional tool, but we see that many large and small carriers like to use this for the ease and speed of the process. The invoice is always in the same format and always correct.

Advantages:

  • Cost saving, no more postal charges
  • Time-saving, auto invoices are approved immediately
  • Always 100% correct invoice
  • Easy tool to participate in bulk-invoicing

About ControlPay

ControlPay is the largest European Freight Audit & Pay service provider. We operate on a global and EMEA scale. Over the last few years, we have grown to a company with 170 employees. ControlPay is not a traditional Freight Payment provider as we are Dutch company and always had a very strong international focus and we focus on the logistics part of the business. Please take a closer look at our unique way of working and our service portfolio below.