Top 20 tips for choosing a freight audit provider

The majority of shipping companies allocate more than 50% of their total logistics costs to transport, so outsourcing freight audit certainly has its advantages. If you are a global brand with global logistics, only a global freight audit provider will do. However, there are vast differences in the working methods of freight audit providers (FAP) around the world, and also in the services they offer. Some focus purely on cost savings, while others offer multiple services and tools, such as business intelligence. It’s by offering those additional services that real savings can be achieved.  

A common mistake in the logistics sector is thinking that freight audit only provides cost savings due to the removal of overbilling. However, quite the opposite is true. Good freight audit also ensures increased freight visibility and actionable data, which prevents overpaying through correct invoices, rather than just handling exceptions. 

But what exactly does ‘good freight audit’ look like? Research is the foundation of a good relationship with your FAP. To help you know what to look for when selecting the right partner – and spot potential pitfalls – we have put together the top 20 things you need to consider. You’re welcome!

Key points when selecting a freight audit provider 

• Collaboration with an FAP is a long-term partnership, so making a good choice is essential. Cooperation often begins with intensive preparations.  
• Which additional tools do they provide? These days, FAPs can offer so much more than only the cost advantages of Freight Audit, so look further than the basic services offered.  
• Important characteristics of FAPs are reputation and stability. How long have they been an active player in the market? Do any relevant quality labels or ISO standards apply? Request extensive references. If additional tools are offered by the FAP, request tool-specific references.  
• Invoice consolidation. Look for an FAP that is able to consolidate shipments. Non-consolidation means that you are losing money, or you need to create workarounds to calculate it correctly. When outsourcing freight audit, the main focus is often on achieving cost savings on freight spend. Therefore, make sure your carrier does the correct shipment consolidation of your LTL, parcel and air shipments. 
• Freight audit is all about cutting-edge technology, and technology changes at an incredibly fast pace. Be sure to ask how much they invest in IT annually. 
• Putting logistical data centre stage. From the finance department to the management team, to the transport planner, everyone has access to transport data. But before it can be analysed, it is essential that the data is clean and correct. This is the advantage of audit and payment, as it helps the organisation achieve competitive advantage, by providing, accurate logistical data.  
• How experienced are they in global markets? Significant auditing differences exist between the United States, Europe and Asia. An essential question to ask, especially as a global market player, is can the FAP handle various currencies and languages? 
• Don’t view FAPs as an expense, it’s a value-adding partner.  
• In this sector, you get what you pay for. You don’t want to find that out the hard way, so be wary. An FAP that positions itself at the low end of the market won’t do you justice. It’s all about quality. 
• Be clear about what they can achieve with freight visibility. What will you gain insight into and what can you do with this data? 
• Look further than an FAP’s client references. Study the collaboration between carriers and the FAP. How is this arranged, how is the technology structured? 
• How do they process manual information from carriers, such as price lists that require manual entry? 
• Ask about their customer service. How is it arranged? Has a separate system been created, or is it arranged via email? This will affect your day-to-day collaboration and is an important factor to look into. 
• Coding and reporting. You obviously don’t want invoices to be overpaid or paid twice ­– but there are many other possibilities. Features include automated cost centre allocation, so look into the options on offer. 
• As an organisation, you need to think strategically. Think beyond your current needs; take your future needs into consideration. Include projected growth in your discussions; can they scale up, if necessary? This is especially key on an IT level.  
• Your FAP should form an extension of your own organisation, so how will they fulfil this role? How do they handle carrier support? What do carriers think of their interaction with the FAP?  
• An FAP should help you establish efficient processes. It takes a while to implement a good freight audit and payment system with the corresponding rates of all carriers. The FAP should be able to advise you and assist with simplifying the rates, harmonising other cost mechanisms and setting limits to accessorials.  
• Look into the organisation’s financial stability, especially if they will take care of your freight payment. 
• There are diverse transport modes in the logistics sector. Make sure your provider is able to handle all of the transportation modes used by your business. Can they also gather all of the data in one system? Are accessorials included in all modes? Multiple modes are sometimes included in one shipment, are they able to handle this? 
• One final piece of advice: Visit the company, and don’t limit yourself to the conference room. Make sure you observe the team in action.

Let us know if you have any further questions. We’re happy to help! If you are looking for in-depth info about freight audit make sure to check out our freight audit guide.