FAP 101: Freight Audit Software - Commodity or Strategic Investment?
The supply chain is all about managing risk, especially since COVID-19. Accenture reported that 94% of Fortune 1000 companies saw supply chain disruptions due to COVID-19. As a result, now 95% of supply chain executives have a formal supply chain risk-management process, according to McKinsey.
With uncertainty always a factor for supply chain executives, now is the time to make a strategic investment in technology that will help your company grow. But still - choosing the right technology for your organization isn’t always black and white.
We’re taking a deep dive into why freight audit software is more than just a commodity - it’s critical.
Trax is a leader in supply chain logistics, with advanced software to manage the freight audit and payment process and all aspects of transportation spend. The Trax product suite proves to be a data-driven solution for optimizing transportation spend and ultimately moving a company toward TSM maturity.
Identifying a Company's Current Freight Audit Pain Points
Regular freight audits are generally necessary for managing transportation costs by increasing process efficiency and building supply chain resilience. Still, companies have specific pain points related to freight audit and transportation spend management, including the following:
- Inaccurate Data - A common mistake freight audit software can solve is relying on insufficient data. Whether the data is old or simply incorrectly reported, inaccurate data in a freight audit comes at a high cost. Trax’s freight audit software addresses this pain point by providing data management capabilities to centralize data from disparate systems.
- Poor Visibility - If supply chain leaders don’t have 100% visibility into the company’s transportation spend, a freight audit will fail to make an impact. For businesses with siloed data and processes, implementing a freight audit and payment software increases visibility. Specifically, the Trax FAP system creates visibility to compliance variance by lane, carrier, and region.
- Late Payments - If a company consistently makes late payments and extra fees are added onto freight bills, investing in a standardized freight audit process is crucial. Unnecessary accessorials and late fees add costs to the total transportation spend. With Trax’s transportation optimization program, companies can focus on accessorial mitigation to save 1-2% in spend within the category. This is further enhanced by the Trax TSM software, including Rate Manager, Data Compliance Manager, and TraxPays.
Advanced Freight Audit Software Capabilities
Beyond addressing major pain points, Trax’s freight audit software provides advanced capabilities that set a company up for success, even in an uncertain market. Some areas of focus for the 2023 supply chain outlook include sustainability and cost optimization.
Freight Audit and Supply Chain Sustainability
Sustainable supply chains offer a variety of benefits to global enterprises, including a reduction in environmental impact, increased profitability, and compliance with Scope 3 mandates. The Scope 3 mandates require enterprises to track all of their carbon emissions throughout the supply chain, meaning that additional data collection and management are required. Without the right transportation spend management software, tracking carbon emissions would be daunting.
Trax's Carbon Emissions Manager
Our proprietary Carbon Emissions Manager provides analytics and interactive dashboards to help companies track real-time carbon emissions data. In addition, this tool does the heavy lifting by normalizing and standardizing data. Rather than focusing on data collection, cleaning, and augmentation, supply chain leaders have no additional burden on managing emissions data.
Cost Optimization with Freight Audit Software
Cost visibility, inventory management, and carrier capacity are major concerns for shippers in 2023. Therefore, calculating a true cost to serve (CTS) is essential for supply chain data analytics. Without the right freight audit software executives will have difficulty landing on this vital metric and won’t have the capabilities to influence CTS.
Tracking Performance Metrics
Optimizing CTS involves tracking a variety of KPIs. From freight billing accuracy to delivery times and freight costs as a percentage of total sales, these performance measures require real-time tracking through advanced freight audit software. Luckily, Trax’s freight audit software makes it simple to track all major performance metrics in one place, which provides actionable insights for reducing CTS.
Choose Trax for TSM Maturity
In a volatile market, it’s more important than ever for global enterprises to have the right freight audit software implemented. Our complete product suite and expert logistics team provide the capabilities to solve your current transportation spend challenges. In addition, our advanced technology goes above and beyond the competition to handle the most complex supply chain cases through cost optimization and sustainability.
Contact us today to speak with a trusted team member and see how we can help you achieve global spend management maturity.