F or years, the freight bill audit and payment (FBAP) industry was viewed by some shippers as a necessary but simple process that just ran in the background. “To use an analogy, it’s like the janitorial service at your office. You know when it’s not done, but otherwise it just seems to happen,” says Craig Cameron, vice president of sales and marketing with A3 Freight Payment. Now, however, the FBAP sector is moving to the foreground. “Companies now seek providers who can support all aspects of facility maintenance, to continue with the janitorial analogy,” Cameron says. Shippers are looking for providers that can go beyond simply checking for freight bill errors— although that remains important—to offer insights that can help them better manage transportation spending. To that end, FBAP companies today focus on providing actionable information, says Allan J. Miner, chief executive officer with CT Logistics. Shippers often look to their provider for sophisticated tools they can use to complete calculations and create reports and heat maps that can guide decisions and actions. The increase in package and parcel shipments—many a result of online and just-in-time deliveries from businesses to consumers and other businesses— has helped expand the North American FBAP market. “These macro-economic conditions create voluminous shipment transactions and information, and it all requires auditing,” Miner says. In addition, the past five years threw a wrench into many production schedules, impacting shipping timelines, says Jay Hazen, chief operating officer with CTSI-Global. When managing a process that depends on so many other processes, information, such as event tracking and monitoring of shipment timelines, becomes even more critical. The value of FBAP services is gaining wider recognition across the globe. Until
they’re continuing to look for the improved efficiency that can come from automation solutions, streamlined connections, and digitized self-service capabilities, says Scott Burglechner, senior vice president of freight and payment product management with U.S. Bank. These capabilities allow shippers to retire legacy EDI technology and automate traditionally paper-based or manual workflows. Making the Connection Some shippers have begun linking with their carriers through API connections. These connections can streamline budgeting and load-planning, as shippers don’t need to maintain contracted carrier rates in their own systems, says Nick Fisher, director of sales and partnerships with ARTC, formerly AR Traffic Consultants. Instead, with the click of a button, shippers can receive the rate information they’ve presumably negotiated, and then estimate the cost of their shipments. However, identifying freight bill mistakes requires going outside these systems. “Otherwise, it’s like going to a restaurant and taking the waiter’s word about your bill,” Fisher says. “You won’t capture any errors that are in the carrier’s system.” In another shift, carriers are becoming more stringent in enforcing payment terms. “They’re more quickly warning customers or cutting off services,” Fisher adds. In one sign of this, the carrier aging (accounts receivable) reports ARTC used to receive monthly now arrive every week or two. Dramatic jumps in cargo theft by well- organized criminal rings are proliferating across the globe, while cyber threats and data theft continue to impact supply chains worldwide, presenting vexing, ongoing challenges. “With potentially millions and millions of dollars or goods at stake, the entire industry needs to be vigilant,” Burglechner says.
On the trail for savings and greater value, shippers turn to their provider for sophisticated tools they can use to complete calculations and create reports and heat maps that can guide decisions and actions.
the past year or so, most new interest came from Europe or Asia, says Keith Snavely, senior vice president, global sales with nVision Global. Now, it’s coming from Latin America. “Latin America is coming into its own,” he says. The increasing importance of accurate and relevant information also highlights the value that providers dedicated to the FBAP space can provide. For instance, some firms that had asked their third-party logistics (3PL) providers to take on FBAP responsibility are reconsidering, says Ross Harris, chief executive officer with A3. Some 3PLs aren’t equipped to take on freight bill and audit work, particularly when it involves transportation activities that don’t fit easily into their back-office operations, such as steamship or cross- docking. “That’s what we’re good at—the funky stuff,” Harris says. As shippers, like many other companies, seek to do more with less,
58 Inbound Logistics • September 2024
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