Did you know that around 20% of freight invoices have errors?
In some cases, that number can soar to 40% or even 60% for container-related bills! These discrepancies often stem from the complexities of the global supply chain.
Shane Ball, Sr. Enterprise Account Executive at BlueCargo.io
January 7, 2025
With the increasing number of carriers, logistics providers, and steamship lines—each with its own unique billing setups—manually auditing invoices has become quite a challenge.
Want to understand the real cost of these errors? Let’s dive in!
Understanding Freight Billing Errors and Their Financial Impact
Freight invoices can be a real headache to audit accurately. Here’s why:
1. Fragmented Systems Across Carriers: Each carrier, steamship line, and logistics provider utilizes different billing formats and structures. Important billing details like charges and contract terms can be buried in fine print or scattered across various sections.
2. Dynamic and Disappearing Data Points: Timestamps for container availability, pickup, or return often vanish once a container is on the move, which creates gaps in the audit trail. This makes it nearly impossible to verify charges such as detention or demurrage without this key information.
3. High Volume of Invoices: Shippers frequently handle hundreds or thousands of invoices each month, which can slow down manual reviews and increase the chances of errors.
4. Outdated Audit Processes: Conventional static audits tend to rely on set rules and often struggle to adapt to real-time changes such as terminal delays or fluctuating surcharges.
5. Delays in Resolving Exceptions: Around 60% of invoices end up in exception queues, delaying payments and disrupting cash flow.
How Fragmentation Complicates Freight Auditing
In today’s volatile global supply chains, companies are diversifying their carrier options to mitigate risk. While this strategy enhances resilience, it also adds complexity:
- More Players, More Formats: Each carrier has its own billing system, complicating efforts to standardize and cross-check invoices.
- No Centralized Data: Key details from carriers, terminals, and logistics providers often exist in silos, presenting a fragmented view.
- Increased Regulations: New rules, such as those in OSRA, have shifted the responsibility of verifying invoice accuracy onto shippers, placing additional strain on internal teams.
Why Manual Audits Aren’t Cutting It Anymore
Even the best internal teams find it tough to navigate the complexities of modern freight billing:
Hidden Errors: Charges can be obscured in lengthy paragraphs or spread across multiple sections, making them difficult to spot without advanced tools.
Human Error Under Pressure: When faced with high volumes of invoices, oversights can result in significant financial losses over time.
Delays in Addressing Exceptions: Around 60% of invoices end up stuck in exception queues, which can delay payments and disrupt cash flow.
AI-Powered Freight Audits: The Solution You Need
BlueCargo’s AI auditing platform aims to tackle the challenges of complicated freight billing. Here’s how we help:
- We streamline billing formats for easier management.
- We preserve critical data before it’s lost and conduct post-audits.
- We cut exceptions down to just 5% from the common 60% typically seen.
Plus, we go beyond simply finding errors. BlueCargo offers templates for dispute resolution and highlights opportunities to save costs.
Freight billing errors don’t just drain your resources—they also throw a wrench in your operations and hurt your profitability.
📅 Spend 5 to 7 minutes with us, and we’ll show you how to revolutionize your freight invoice processes.
Schedule your consultation HERE.
Shane Ball > LinkedIn
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Sources of reference: CSMP, The (fragile) state of freight invoice processes and audits, Nasstrac Webinars
