Small Parcel Audit: Why every company can save money

Pieter Kinds

Pieter Kinds

August 4, 2016 - 10:27

ControlPay - Small Parcel Blog

The e-commerce business in Europe is growing way faster than experts expected. While the fast expansion of e-commerce produces a growth opportunity for Europe, Retailers and Manufacturers struggle with rising (Cross-Border) parcel prices.

Earlier this month, during the during the Global E-commerce Summit (May 2016), the E-commerce Foundation and Ecommerce Europe released its latest European BC2 E-commerce Report. According to this report, the e-commerce turnover grew double digits to €455.3 billion, with a growth rate of 13.3% in 2015, according to the report. This year, the European B2C e-commerce turnover will keep increasing and is forecast to reach the €500 billion mark.

 Parcel delivery PricesEuropean B2C e-commerce turnover to reach €500 billion this year

The rising E-commerce numbers are fueling the parcel express industry. Because of its fast expansion, chiefly high cross-border parcel delivery prices have skyrocketed. Both retailing companies and consumers are off course worried about this price increase. In 2015, Eurostat conducted a
survey of businesses. For Companies that already conducted e-commerce on a cross-border level, 51% stated that parcel delivery prices were too high when shipping to other EU countries, while 27% of the respondents named the high parcel pricing a 'major problem'.

Domestic versus cross-border parcel delivery

High prices and the inconvenience of cross-border parcel delivery have been identified as being among the main obstacles to a bigger uptake of e-commerce among European consumers and retailers. Research shows that current cross-border parcel delivery prices charged by universal service providers can be nearly five times higher than domestic parcel delivery prices.

 Pricing and Benchmarking study

Shippers are therefore looking for a solution to reduce their parcel transportation costs. One of the most-used methods to reduce parcel shipping costs is auditing your parcel freight bills.

Small Parcel Audit: The typical issues

Not many people in the logistics industry know that, despite the nature of parcel shipments (Light-Weight package with relatively low freight costs), significant savings can be made on the overall freight spend by applying a small parcel freight audit solution.

Regular parcel carrier invoice mistakes

- Volumetric Weight discrepancies due to carrier's own scanning
- Service level discrepancies
- Application of Accessorial Charges not-stated in the rate agreement
- Application of Accessorial Charges that cannot be audited (insurance, appointment surcharge, ..)
- Regular changes in the Remote Area zoning definition
- Consolidation rules not properly specified
- Complex rounding mechanisms (sometimes triple rounding)
- Complex conversion mechanism (conversion p/parcel)
- New surcharges popping up
- Parcel carriers not capable to support invoice set-up
- Inaccurate shipment data
- Parcel carriers claiming there is just one standard for all, no customization possible
- Long response time to issues and e-mails

Why Outsourcing small parcel audit?

To clinically rule out all the above mistakes, on a regular basis, is a very labor intensive task when auditing your parcel bills in-house. Not to mention, you need to have a solid system AND the skills to maintain this system as freight rates and fuel surcharges constantly change. Outsourcing Freight Audit can save you up until 5% of your freight expense in general.

How to prevent being dependent on your carriers?

For parcel, or in case only carrier data is available, ControlPay offers a highly effective rate check audits. This final invoice audit is developed in close harmony with FedEx, UPS and DHL and supports electronically interfaces like EDI, XML, FTP. We receive their shipment data and rate them against the rates and business rules in our system. The discrepancies that come out of this process are then shared with the carriers and where needed a credit note will be requested. The ControlPay freight audit platform is a very logistics driven collaborative platform that is completely focused to handling the complexities of international freight invoicing flows. For all our global clients we strive to optimize current transportation contracts.

How to improve a Shipper's independency:

  • Agree on rates and business rules that suit the data availability at shipper’s side
  • Agree on transparent, not too complex rates and business rules
  • Force upon standardization to be able to properly benchmark

Small Parcel Audit Flow

During the freight audit process, ControlPay runs daily audits and approves freight invoices on behalf of the client. Our goal is always to :

  • Improve control and visibility over operations/shipments (all data available in CP Portal for reporting: no. of shipments, type of shipments, no. of pallets shipped, date of loading etc.)
  • Improve invoice treatment, speed up payment to carriers (invoices will always be correct - client will not be charged wrongly anymore more control on clients spends)
  • Reduce freight cost
  • Free up human resources (Timesaving)

ControlPay - The Global Freight Audit Company

As a global and EMEA Freight Audit provider, we are specialized in small parcel audits that identify shipping and invoice errors. With our self-build, cloud-based software solution we recover millions of Euro’s for our global clients on a yearly basis.

We work for over 13 years for clients in a wide range of industries, including:

  • Healthcare
  • Pharmaceutical
  • Retail (E-Commerce)
  • Manufacturing
  • Industrial
  • Telecommunications
  • Technology
  • Supply Chain
  • Consumer goods (FMCG's)

Discover why ControlPay is the fastest growing Freight Audit Company in Europe, visit our about page or download our latest eBook: Global Freight Audit Strategies. To access this free content, please use the following link:

Or download our special services Ebook and learn more about ControlPay's vision on Freight Audit, our Business Intelligence Capabilities and additional tools that will free up the valuable time of your finance and logistics department.

Download our Advanced Freight Audit eBook