The ultimate guide to freight audit in 5 simple steps

01/20/2023 | 8 min

1. What is freight audit? 

Freight Audit is the process of verifying and analysing freight bills in order to gain cost savings, improve logistical processes and optimise operations.  

Freight auditing is done by either manually reviewing freight bills, or through the use of advanced software, capable of analysing and tracking huge amounts of data to provide superior billing accuracy and logistical analysis. Advanced service providers in this field often combine human expertise with technological innovation for the best results.

There are three fundamental aspects to freight audit services:  

  • Finance: In logistical operations billing inaccuracies often crop up between the shipper and the carriers, due to a number of factors such as the complexity of contracts, transportation and warehousing methods, and the number of parties and shipments involved. Freight audit can find and eliminate these inaccuracies, saving companies from overbilling and seriously reducing expenses. This not only allows for a better ‘bottom line, but also improves the financial health of any logistical operation. To learn more about how to generate cost savings with Freight Audit, check out this infographic. 

  • Data and analytics: Innovative freight audit providers who use software and high-level business analytics, not only reduce client expenses they also provide a clear understanding of their own logistics. This empowers businesses by demonstrating how to optimise operations and improve control over their own logistical operations and relationships. 

  • Customer support: This is a fundamental feature of any freight audit provider, however, it differs according to the technological nature of the company. High-tech freight audit firms can not only support customer requests, but they also offer custom-tailored solutions, based on the unique nature of the logistical operations of the client. 

2.  Freight audit technology 

Freight related processes are more complex than ever, with technology, rates, transportation modes and fluctuating resource prices (such as fuel) adding new layers to logistics. As a result, human error is a serious consideration, and managing freight auditing in-house or through simple services is proving increasingly ineffective.

The solution is to improve the technological methods of auditing, while providing logistics expertise. Leaders in the freight audit industry, such as Transporeon, use specialised software that can track a large amount of variables, rates and other data, offering unparalleled accuracy, and reducing the chance of overbilling, invoice mistakes and other errors. Consequently, companies seeking to optimise their logistics operations, will enjoy effective cost savings. 

Transporeon offers a comprehensive suite of freight audit technology and innovative services, including: ocean, road, air and rail audit; parcel audit; warehouse cost management; rate management; freight tendering; business intelligence and more. These services are provided using advanced software, cloud platforms and convenient stand-alone tools.

3. What is a Freight Audit Provider (FAP)? 

In its simplest terms, a freight audit provider analyses, verifies and corrects inaccuracies in freight bills and invoices. While cost savings and protection from overbilling remain key functions, with the growing complexity of modern logistics and billing, this no longer covers the full spectrum of an FAP’s capabilities.

High-tech freight audit companies incorporate software, automation and expertly trained auditors to bring freight bill verification and cost savings to a new level. These IT-powered vendors offer process visibility, business intelligence, freight tendering, rate management, spot bidding, consulting and more. This accurate logistical data can be used for a multitude of purposes, to empower their client’s logistical operations and give them a competitive advantage.

4. What freight audit services are there? 

Freight audit has a wide range of services related to invoice verification, cost savings and many adjacent aspects of logistical operations. These services vary, based on transportation modes (ocean audit, road audit, air audit, rail audit, parcel audit, warehouse audit); technological level (electronic processing and e-billing, or manual audit); stage of involvement (pre-audit or post-audit solutions); or the methods used to conduct billing and invoice verification (such as control-billing, self-billing and other solutions). 

The range of solutions also depends on the expertise and technologies used by the service provider. High-tech freight audit companies tend to offer auditing services powered by software and cloud solutions, with adjacent services connected to data processing and analysis. Traditional freight audit providers focus primarily on the manual review of invoices and bills, and have a narrower scope of service features and options. 

While high-tech freight audit providers have built innovative technological solutions that power their services, with the vast complexity of logistical operations around the globe, expert auditing skills are still a vital component of freight auditing. Therefore, human expertise is still needed to adjust, control and run these automated systems.  

5. Why do you need freight audit? 

Within the increasingly complex world of global trade and manufacturing, it’s more important than ever to keep control of your costs and have a clear understanding of your processes in order to stay competitive. 

Many global giants outsource their freight audit needs, to not only take control of their expenses, but also predict potential problems, free up strategic experts and departments for maximum business output, and truly understand their logistical flow. 

Logistical operations are the lifeline of any trade-oriented (or similar) business, so the need for efficient and accurate billing, data analysis and process optimisation is imperative. Using the latest freight audit technology will help you gain crystal clarity of your logistics data, empowering you to make smart strategic choices and precise business decisions.

Curious to find out more? Visit our Freight Audit Hub for more information.


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