Beyond the Freight Bill Audit
This includes emerging technology like arti cial intelligence (AI). “Freight bill providers and their clients have to remain diligent and aware of how AI can impact the market,” says Peter Kerwin, head of audit operations with Trans Audit. “AI is taking over everything we do.” The growing role of technology is also prompting structural changes. A number of acquisitions occurred in 2022, resulting in a consolidation of service providers. “The majority of FBAP services are now performed in association with other transportation or nancial technology ( ntech) offerings,” says Scott Matthews, president, freight audit and payment, AFS Logistics. Other changes include the bankruptcy of Yellow Corporation and the new con- tract reached between UPS and its drivers. “In the short term, these might offer an opportunity for slightly more attrac- tive parcel rates, as other carriers try to increase their business,” says Nick Fisher, director of sales and partnerships with ARTC Logistics. Within a year, however, it’s likely rates will increase again. The Future of the FBAP Sector Looking ahead, it’s probable the num- ber of freight bill providers will continue to shrink. Some providers that struggle to nd the resources needed to invest in technology probably will leave the indus- try, whether by selling themselves off to another company or simply closing their doors, Carlson says. Conversely, the large ones likely will get larger. There has also been considerable activity around sustainability and how advanced analytics solutions that lever- age FBAP data can support reporting and inform decision-making related to cli- mate impacts, Burglechner says. Even as the FBAP industry continues to consolidate, both providers and clients will look for technology and services that go beyond simply processing and pay- ing invoices, to encompass strategies that help shippers better manage their trans- portation spend, Snavely says. The companies featured here are lead- ing this change.
Choosing the Right Provider: 10 Questions
The following questions can help you determine if a freight bill audit and payment provider is the right fit for your organization. 1) Do the provider’s capabilities and technology investments line up not only with your organization’s needs today, but its likely needs five or 10 years from now? 2) Can the company help you improve your FBAP processes? “Companies should expect recommendations from a trusted FBAP provider that can improve transportation expense control, increase automation with quality data and intelligent automation, and provide greater working capital,” says Burglechner from U.S. Bank. In contrast, the short payment model, which is common in the FBAP space, allows problems to continue, says Craig Cameron, VP of sales and marketing, A3 Freight Payment. Say the audit detects an error of $50, and the provider short pays the carrier by $50 and then lets the carrier know the reason for the short payment. However, this information often doesn’t get to the correct person. So, the carrier’s system continues to bill for the $50. “To truly fix the problem, you need a front-end resolution process,” he says. 3) How does the provider store freight rates? A growing trend among shippers and logistics companies is to access carrier rates in real time, says ARTC Logistics’ Fisher. While this can oer some advantages, it comes with a significant disadvantage: Real-time rates won’t necessarily match the rate in your contract. For example, the freight bill says a shipment cost $1,000, and when the shipper checks the carrier’s website, it also shows $1,000. However, if the contract has a rate of $900, the shipper likely will overpay without realizing it. 4) How strong are the provider’s relationships with carriers? “Shippers rely on carriers to move freight,” says Dani Funk Heimsoth, senior director of development, Trans Audit. “You (and your audit provider) need to maintain healthy relationships with them to ensure the process runs smoothly.” 5) What steps has the company taken to ensure its processes and controls are secure and e¡ective? FBAP providers should have complete policies for information security and network security, including data segmentation measures as well as standards for disaster recovery, incident response, change management, and physical security, says CTSI-Global’s Nolan.
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72 Inbound Logistics • September 2023
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