Data-Driven Decision Making: Freight Audit 

11/04/2022 | 4 min


How can companies unlock new value in transportation management? By becoming more data driven in their decision making.

That is the focus of a multi-part video seminar we are producing in partnership with Transporeon (a Talking Logistics sponsor) on data-driven decision making. The seminar is based on the research report “From Gut Feelings to Data-Driven Decision Making: How to Unlock New Value in Transportation Management.”

The first two seminar sessions focused on Real-time Transportation Market Intelligence and Autonomous Procurement. This third session focused on Freight Audit. Is the value proposition of freight audit different today than in the past? How is freight audit data converted into actionable intelligence? What business value does it deliver to companies?

Those are the main questions I explored with Dirk Grewenig, Global Account Director and Stefanie Bergfeld, Director Audit and Settlement Tribe at Transporeon. I encourage you to watch the full video for all of their insights and advice, but here are some highlights from our conversation.

What Is the Value Proposition of Freight Audit Today?

At its most basic level, the traditional value proposition of a freight audit company is to review freight invoices for billing inaccuracies – a problem that happens more often than you’d think due to the complexity of freight contracts (which varies by transportation mode, geography, and carrier), accessorial charges, fuel surcharges, and other factors. By identifying and eliminating these billing inaccuracies, and thus preventing overpayment, freight audit firms help companies reduce their overall transportation spend.

While this remains an important part of freight audit’s value proposition, “freight auditors today are also data providers,” explains Dirk. “Our customers are looking for reliable data [about their transportation operations], which is why we audit at both the shipment and cost-item level.”

In other words, today’s leading freight audit companies are also providers of transportation business intelligence and analytics, and therefore converting all the data collected into actionable insights is currently a big part of a freight audit company’s value proposition.

Converting Freight Audit Data Into Actionable Intelligence

Freight audit companies collect a wealth of data from a variety of sources, such as carrier invoices, bills of lading, shipment documents, transportation management systems, and other sources.

“We collect a lot of different logistics data,” says Stefanie. “Anything you would expect to see on an invoice, such as information about the shipment, the carrier, the invoiced party, accessorial costs, surcharges, and so on.”

Stefanie adds that “due to the fragmented landscape of service providers and the lack of standards, we get this information in all formats imaginable, including PDF. We use the latest technologies to process the information we receive, normalize the data, and put some structure into this chaos to make the data machine readable.”

However, Stefanie stresses that “all this data would not be valuable for the customer if they are not able to look at this data using an analytics tool. The cherry on top is having an analytics tool that is easy to use to [dive into] the data we collect.”

In other words, providing shippers with access to BI and analytics tools is another part of a freight auditor’s value proposition today. This includes customizable dashboards and visualization tools that enable users to build data cubes, generate charts and graphs, and drill deep into the data to obtain a more detailed understanding of their transportation spend, operations, and other key performance indicators.

Dirk, Stefanie, and I discussed other questions, including: 

  • Can you share some examples of how the insights obtained from freight audit data analysis delivers value to transportation professionals?
  • Does the business value extend beyond transportation?
  • What questions should companies ask themselves to assess whether they are a leader or laggard when it comes to using freight audit data and insights to drive decisions? What factors or capabilities are most important?

Again, I encourage you to watch the full video for all their insights and advice. Then post a comment and share your perspective and questions about this topic.

About the author

Adrian Gonzalez is a trusted advisor and leading industry analyst with more than 20 years of research experience in transportation management, logistics outsourcing, global trade management, social media, and other supply chain and logistics topics.

In addition to launching Talking Logistics, Adrian is the founder and president of Adelante SCM, a peer-to-peer learning and networking community for supply chain and logistics executives and young professionals. He is also the founder of Indago, a market research service that brings together a community of supply chain and logistics practitioners who share practical knowledge and advice with each other while giving back to charitable causes.


From Gut Feelings to Data-Driven Decision Making

Transportation tops the list of where to unlock business value – but historically the industry has faced many hurdles stopping us from harnessing the transformational effect data can have. Our latest report shares stark comparisons, best practice use cases and expert commentary on where and how you can leverage freight audit data to make more intelligent decisions. Use it to save time and money, and level up on the data maturity scale.

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