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Freight cost management headaches: what surprises are in that invoice?

#industryinsights  #chainvisibility  #supplychaincost  #transportmanagementsystem  #supplychain 

04.10.2018

There it is on your desk – an envelope with an invoice inside. What are the chances that it matches perfectly with what you expected to pay when the truck came to pick up the load a few weeks ago? Being overcharged, planned cost not matching actual cost, and unpredicted accessorials all add to the pile of work that is cost reconciliation. Especially in chemical logistics, where accessorials are more varied and complicated due to strict regulatory requirements, paperwork, and cleaning.

As the business grows, so does the hassle of reconciling invoices. ERP systems can help, but they often can’t cope with accessorial costs in a detailed and itemised way. It’s hard to get good visibility and a complete understanding of what you are being charged and why. That’s where a transport management system or TMS can help you get ahead of the game.

 

The key is collecting the driver’s input at the right time, during the whole transportation

One person in the supply chain knows what accessorials should be charged: the driver. When the driver spends unanticipated time loading and unloading, going off-route to a predefined cleaning station, and filling in the necessary paperwork, he or she precisely knows what activities are out of the norm and call for an accessorial charge.

Typically, the driver only communicates these charges to his or her trucking company – but you can get access to this vital information through Transwide TMS.

By allowing drivers to input extra charges or incidents in real-time, you can get critical information that can help you plan for costs correctly.  The types of accessorials you allow are up to you and can be predefined in advance. You can approve or deny these costs at the moment they occur, rather than waiting several weeks for an unpleasant surprise in your mailbox.

Additionally, by having a systematic overview of all your accessorial charges, you can take a helicopter view and find ways to avoid these types of charges in the future. Maybe a dock scheduling system would help you reduce waiting fees, for example.

 

Stop the invoice disputes before they start 

An automated claims workflow makes it easy to stop billing errors before they occur since each accessorial type is linked to a contractually-agreed price with your carrier. Pre-billing is a great way to make sure your carriers get it right the first time. By providing them with the load and lane information which they agreed to at the time of shipping through your Transwide TMS system, including the accessorials that were input by the driver and approved by you, they have no option but to charge you the correct price.

All of this lets you spend your time on more useful things than disputing invoices and ensuring you get credit notes to reverse the charges. The linkage to your data also allows you to forecast your transportation spend accurately for your management team and plan for resources in the future.