The Ultimate Guide to Freight Audit

Updated: 03-05-25

Key Takeaways

  • Freight audits ensure accurate shipping costs, preventing billing errors and overpayments.
  • The process includes data collection, invoice validation, rate verification, and discrepancy resolution.
  • Modern freight audits leverage AI and automation, improving efficiency and reducing manual errors.
  • A robust audit system enhances visibility, cost control, and compliance, reducing financial and regulatory risks.
  • Transportation Spend Management (TSM) maturity helps companies shift from reactive cost recovery to proactive optimization.
  • Trax provides advanced freight audit solutions, integrating data, analytics, and compliance tools to drive cost savings.

 

In the complex world of global supply chains, where every penny counts and efficiency reigns supreme, freight audit emerges as the unsung hero of transportation spend management. 

But what -exactly is this mysterious process that has logistics professionals buzzing?

What is Freight Audit?

Freight audit is the meticulous examination of shipping invoices and related data to ensure the accuracy of freight costs. 

It's like having a financial detective on your payroll, scrutinizing every charge, fee, and surcharge with the precision of a jeweler examining a diamond. In an industry where a misplaced decimal point can cost thousands, freight audit serves as the first line of defense against billing errors and overpayments.

But why, you might ask, is such a process necessary? Well, imagine trying to keep track of every item in a warehouse the size of a small country, each with its own unique shipping requirements, rates, and potential pitfalls. That's essentially what global shipping entails. With countless variables affecting the final cost of shipping inventory - from fuel surcharges to dimensional weight pricing - invoiced amounts often bear little resemblance to the shipper's original quotes.

This is where freight audit steps in, clipboard in hand, ready to make sense of the chaos. It provides a framework for companies to streamline their logistics processes, increase efficiency, limit costs, and achieve greater resiliency in the face of supply chain volatility. Think of it as a financial fitness program for your shipping operations, trimming the fat from bloated invoices and strengthening your bottom line.

But freight audit isn't just about catching errors and saving money (although that's certainly a delightful bonus). It's about gaining visibility into your transportation spend, understanding cost drivers, and making data-driven decisions to optimize your supply chain. It's the difference between navigating your logistics operations blindfolded and having a high-powered telescope at your disposal.

The process typically involves several key steps:

  1. Data collection and integration
  2. Invoice validation
  3. Rate verification
  4. Identification of discrepancies
  5. Resolution of issues with carriers
  6. Payment processing
  7. Reporting and analytics

Each of these steps plays a crucial role in ensuring that you're not paying a penny more than you should for your shipping needs. But more than that, they provide invaluable insights into your transportation spend, allowing you to identify trends, negotiate better rates, and make strategic decisions about your logistics operations.

Freight audit has evolved from a simple checking of invoices to a comprehensive process that leverages advanced technology and analytics. Modern solutions use artificial intelligence and machine learning to automate much of the process, allowing for faster, more accurate audits and freeing up human resources for more strategic tasks.

As we navigate an increasingly complex global supply chain landscape, freight audit stands as a beacon of clarity and control. It's not just about catching errors; it's about understanding your transportation spend, optimizing your processes, and positioning your company for success in a highly competitive marketplace. In short, freight audit is the secret weapon of savvy logistics professionals everywhere, turning the chaos of shipping invoices into a wellspring of strategic insight.

History of Freight Audit

The story of freight audit services is a tale of adaptation, innovation, and the relentless pursuit of efficiency in the face of an ever-changing transportation landscape. It's a journey that takes us from the smoke-filled rooms of mid-20th-century banks to the gleaming data centers of today's digital age.

Our story begins in the 1950s, a time when poodle skirts were in vogue and the transportation industry was as tightly regulated as a military parade. In this era of strict oversight, a group of forward-thinking banks, shippers, and carriers came together to form an association called the National Association of Freight Payment Banks in order to meet strict requirements for freight payments. Their mission? To meet the rigorous requirements for freight payments in an industry bound by red tape and regulations.

For decades, this system chugged along like a well-oiled machine. Freight audit, in its infancy, was a largely manual process. Picture rooms full of clerks, armed with calculators and reams of paper, meticulously checking each invoice against agreed-upon rates. It was slow, it was tedious, but it got the job done.

The watershed moment came in 1980 with the passage of the Motor Carrier Act, which ushered in a new era of deregulation. Suddenly, the tightly controlled world of freight rates was blown wide open. Carriers could now negotiate their own rates, and shippers found themselves navigating a brave new world of pricing complexity.

This deregulation was a double-edged sword. On one hand, it offered more flexibility and potential for cost savings. On the other, it dramatically increased the need for freight audits. With rates no longer set in stone, the potential for billing errors and discrepancies skyrocketed. The humble freight audit, once a straightforward checking of numbers, was thrust into the spotlight.

As the 20th century drew to a close, another revolution was brewing – the digital revolution. The advent of computers and later, the internet, transformed freight audit from a manual, paper-based process to an increasingly automated one. Spreadsheets replaced ledgers, and email began to supplant snail mail for invoice transmission.

But the real game-changer came with the rise of specialized freight audit and payment (FAP) software in the late 1990s and early 2000s. These systems could process invoices faster and more accurately than any human, catching discrepancies that might slip past even the most eagle-eyed auditor. They also began to offer something new: data analytics. For the first time, companies could not only audit their freight spend but gain insights from it, identifying trends and opportunities for optimization.

As we entered the 21st century, the pace of change only accelerated. The rise of e-commerce and globalization put unprecedented pressure on supply chains, making efficient freight management more crucial than ever. Freight audit evolved to meet these challenges, incorporating advanced technologies like artificial intelligence and machine learning.

Today, freight audit stands at the cutting edge of transportation spend management. Modern FAP systems can handle millions of invoices across multiple modes of transportation and geographies. They offer real-time visibility into transportation spend, automate complex calculations, and provide predictive analytics to help companies stay ahead of the curve.

From its humble beginnings in the regulated world of post-war America to its current status as a high-tech cornerstone of supply chain management, freight audit has come a long way. As we look to the future, one thing is clear: in an increasingly complex and fast-paced global economy, its role in ensuring efficiency, accuracy, and strategic insight will only continue to grow.

Key Freight Audit Terms

A solid grasp of industry terminology is essential for effective communication and understanding. This section will make clear the key terms that are fundamental to the freight audit process, providing professionals with the vocabulary necessary to navigate this critical aspect of transportation spend management.

Freight Audit and Payment (FAP): This term encompasses the comprehensive process of examining, verifying, and settling transportation invoices. FAP is the cornerstone of effective transportation spend management, ensuring accuracy in billing and providing valuable insights into shipping costs.

Invoice Validation: A crucial step in the freight audit process, invoice validation involves the thorough examination of each line item on a freight bill to ensure its accuracy. This includes verifying rates, accessorial charges, and service levels against agreed-upon terms.

Rate Tolerance: In freight auditing, rate tolerance refers to the acceptable margin of variance between the expected and actual charges. It's typically expressed as a percentage or dollar amount and helps streamline the audit process by allowing minor discrepancies to pass without triggering a full review.

Accessorial Charges: These are additional fees beyond the basic freight rate, such as fuel surcharges, inside delivery fees, or charges for special handling. A thorough freight audit process carefully scrutinizes these charges to ensure they're warranted and correctly applied.

Freight Bill: This document, also known as a freight invoice, details all charges associated with a shipment. It serves as the primary source of information for the freight audit process.

Carrier Contract: A legally binding agreement between a shipper and a carrier that outlines the terms of service, including rates, service levels, and any special arrangements. These contracts form the basis for many freight audit comparisons.

General Ledger Coding: The process of assigning freight charges to specific accounts within a company's financial system. Proper coding is essential for accurate cost allocation and financial reporting.

Freight Payment: The act of remitting payment to carriers for their services after the freight audit process has verified the accuracy of the charges. This may involve full payment, partial payment, or dispute resolution.

Audit Trail: A chronological record of all actions and decisions made during the freight audit process. It's crucial for maintaining transparency and accountability, especially in cases of disputes or audits.

Dimensional Weight (DIM Weight): A pricing technique used by carriers that takes into account the package's volume as well as its actual weight. Understanding DIM weight is crucial in freight auditing, as it often impacts the final shipping cost.

Freight Class: A standardized method for categorizing freight based on its characteristics such as density, stowability, handling, and liability. Freight class plays a significant role in determining shipping rates and is a key element in the freight audit process.

Landed Cost: The total cost of a shipment, including the purchase price, transportation fees, customs, duties, taxes, insurance, currency conversion, and handling fees. Accurate calculation of landed costs is essential for comprehensive freight auditing.

EDI (Electronic Data Interchange): A standardized format for exchanging business documents electronically between companies. In freight auditing, EDI is often used to transmit invoices, payments, and other relevant data.

Freight Audit Software: Specialized technology solutions designed to automate and streamline the freight audit process. These tools often incorporate machine learning and artificial intelligence to improve accuracy and efficiency.

Exception Management: The process of identifying, investigating, and resolving discrepancies or anomalies discovered during the freight audit process. Effective exception management is crucial for maintaining the integrity of the audit.

Cost Allocation: The process of distributing freight charges across different departments, cost centers, or projects within a company. Proper cost allocation is essential for accurate budgeting and financial reporting.

Accrual Management: The practice of recognizing expenses when they are incurred rather than when they are paid. In freight auditing, accrual management ensures that transportation costs are accurately reflected in financial statements, even if invoices haven't been received or paid.

Carrier Performance Metrics: Key indicators used to evaluate carrier service levels, such as on-time delivery rates, damage rates, and invoice accuracy. These metrics are often derived from freight audit data and used to inform carrier selection and contract negotiations.

Transportation Management System (TMS): A logistics platform that streamlines shipping processes, including carrier selection and route optimization. Some modern TMS solutions offer basic freight audit capabilities, typically in the form of spot audits. However, they are not designed to provide the comprehensive, 100% invoice auditing that a dedicated freight audit provider like Trax delivers. Historically, TMS and FAP solutions have complemented each other rather than competing, with shippers leveraging both for a more complete approach to transportation spend management.

As the field of transportation spend management continues to evolve, staying abreast of industry terminology will remain crucial for success.

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The Freight Audit and Payment (FAP) Process

The Freight Audit and Payment (FAP) process is a critical component of transportation spend management, serving as the foundation for cost control, visibility, and strategic decision-making in logistics operations. This section will provide a comprehensive overview of the FAP process, detailing each step and highlighting its importance in the broader context of supply chain management.

  1. Data Collection and Integration
    The FAP process begins with the gathering of relevant shipping data from various sources. This includes freight bills, bills of lading, purchase orders, and carrier contracts. Modern FAP systems utilize advanced data integration tools to collect this information from multiple channels, including EDI transmissions, APIs, and even paper documents via OCR technology. The key challenge in this stage is ensuring data completeness and consistency across different formats and sources. Sophisticated FAP solutions employ data normalization techniques to standardize information, creating a unified dataset for analysis.
  2. Invoice Pre-Audit
    Once data is collected and normalized, the pre-audit phase begins. This involves a preliminary check of the freight invoices against basic criteria such as mathematical accuracy, duplicate billing, and compliance with agreed-upon rates. Automated systems can quickly flag obvious discrepancies, allowing human auditors to focus on more complex issues.
  3. Rate Verification
    This critical step involves comparing the charges on each invoice against the contracted rates and terms. It includes verifying base rates, accessorial charges, fuel surcharges, and any other fees. Advanced FAP systems maintain up-to-date rate databases and can automatically apply complex rating rules, including dimensional weight calculations and tiered pricing structures.
  4. Service Level Verification
    Beyond rate accuracy, it's essential to verify that the service level provided matches what was contracted. This includes checking delivery timeframes, special handling requirements, and any guaranteed service commitments. Discrepancies here may result in charge adjustments or service failure claims.
  5. Accessorial Charge Validation
    Accessorial charges often represent a significant portion of freight costs and are a common source of billing errors. The FAP process carefully scrutinizes these charges, verifying their validity and accuracy. This may involve cross-referencing with proof of delivery documents or other supporting evidence.
  6. Geographical and Mileage Auditing
    For distance-based pricing, the FAP process includes verification of origin and destination points, as well as the calculated mileage. This is particularly important for less-than-truckload (LTL) and full-truckload (FTL) shipments.
  7. Identification of Discrepancies
    Throughout the audit process, any discrepancies or potential errors are flagged for further investigation. This may include overcharges, undercharges, duplicate invoices, or missing information. Advanced FAP systems can categorize and prioritize these exceptions based on their potential impact and complexity.
  8. Exception Management
    Flagged items undergo a more detailed review, often requiring human intervention. Auditors investigate the root cause of discrepancies, which may involve consulting additional documentation, contacting carriers, or reviewing historical data for context.
  9. Carrier Communication and Dispute Resolution
    When discrepancies are confirmed, the FAP process includes a structured approach for communicating with carriers. This may involve submitting formal disputes, requesting additional documentation, or negotiating settlements. Effective FAP systems track the status of these communications and provide tools for managing the resolution process.
  10. Cost Allocation
    Once invoice accuracy is confirmed, the FAP process allocates costs to the appropriate internal cost centers, departments, or projects. This step is crucial for accurate financial reporting and budgeting. Advanced systems can apply complex allocation rules based on various attributes of the shipment.
  11. Payment Processing
    After all verifications and allocations are complete, the FAP system initiates the payment process. This may involve generating payment files for the company's accounts payable system or, in more advanced setups, directly executing payments to carriers. The system ensures that payments are made according to agreed-upon terms, optimizing cash flow while maintaining good carrier relationships.
  12. Reporting and Analytics
    The final stage of the FAP process involves generating comprehensive reports and analytics. This includes financial summaries, carrier performance metrics, trend analyses, and exception reports. Advanced FAP systems offer customizable dashboards and data visualization tools, allowing stakeholders to gain actionable insights from the wealth of data processed.
  13. Continuous Improvement
    A robust FAP process doesn't end with reporting; it includes mechanisms for continuous improvement. This involves analyzing audit results to identify recurring issues, refine audit rules, and inform contract negotiations with carriers. It may also feed into broader supply chain optimization efforts, such as network design and mode selection strategies.

The Freight Audit and Payment process is far more than a simple checking of invoices. It's a comprehensive system that ensures financial accuracy, provides valuable business intelligence, and serves as a foundation for strategic transportation spend management. As supply chains grow more complex and data-driven, the importance of a sophisticated FAP process cannot be overstated. 

Benefits of Freight Audit

Freight audit is a critical process that offers numerous advantages to companies engaged in transportation and logistics. By implementing a robust freight audit system, companies can unlock significant value across their global supply chain operations. Let's explore the key benefits that make freight audit an indispensable component of transportation spend management.

Cost Savings and Recovery

Perhaps the most immediate and tangible benefit of freight audit is the potential for substantial cost savings. By meticulously examining freight invoices, companies can identify and rectify billing errors, unauthorized charges, and contract discrepancies. These savings can be significant, often ranging from 2% to 5% of total freight spend. Over time, these recovered costs can amount to substantial sums, directly impacting the bottom line.

Enhanced Data Accuracy and Integrity

Freight audit processes significantly improve the quality and reliability of transportation data. By cleansing and normalizing invoice data, companies ensure that they are working with accurate, consistent information across all modes and geographies. This enhanced data integrity forms the foundation for better decision-making and strategic planning.

Improved Visibility and Control

A comprehensive freight audit system provides unparalleled visibility into transportation spend. It allows companies to track costs across different carriers, modes, and regions, offering a granular view of expenses. This visibility empowers companies to exercise greater control over their transportation budget and make informed decisions about carrier selection and route optimization.

Compliance and Risk Mitigation

Freight audit helps ensure compliance with contractual agreements and regulatory requirements. Companies can mitigate the risk of overpayment and maintain good standing with their carriers by systematically verifying charges against agreed-upon rates and terms. 

Additionally, a robust audit trail supports internal and external compliance audits, reducing legal and financial risks. Beyond financial accuracy, the data collected through freight audits can also be leveraged to ensure compliance with emissions reporting regulations, helping companies track and manage their environmental impact in alignment with sustainability mandates.

Operational Efficiency

Automating the freight audit process leads to significant improvements in operational efficiency. It reduces the manual effort required to process invoices, resolve discrepancies, and manage payments. This automation frees up valuable human resources to focus on more strategic tasks, such as carrier relationship management and transportation network optimization.

Performance Measurement and Benchmarking

Freight audit data provides a wealth of information for measuring carrier performance and benchmarking against industry standards. Companies can track key performance indicators (KPIs) such as on-time delivery rates, invoice accuracy, and accessorial charge frequency. This data enables companies to make data-driven decisions about carrier selection and contract negotiations.

Cash Flow Management

Freight audit contributes to better cash flow management. It helps prevent late payment penalties and takes advantage of early payment discounts where applicable. Moreover, accurate accrual management supports more precise financial forecasting and budgeting.

Strategic Decision Support

The insights gained from FAP data are invaluable for strategic decision-making. Companies can analyze spending patterns, identify cost drivers, and uncover opportunities for optimization. This data-driven approach supports initiatives such as network redesign, mode optimization, and carrier rationalization.

Improved Carrier Relationships

Contrary to what some might expect, a robust freight audit process can actually enhance relationships with carriers. By ensuring timely, accurate payments and providing a clear process for dispute resolution, companies can foster trust and transparency with their transportation partners. This can lead to better service levels and more favorable contract terms in the long run.

Environmental Impact Reduction

As sustainability becomes increasingly important, freight audit data can play a crucial role in reducing environmental impact. By providing insights into transportation patterns and inefficiencies, companies can identify opportunities to consolidate shipments, optimize routes, and reduce empty miles. This not only reduces costs but also contributes to lowering the carbon footprint of logistics operations.

Scalability and Adaptability

A well-implemented freight audit system can easily scale to accommodate business growth and adapt to changing market conditions. Whether expanding into new geographies, adding new transportation modes, or dealing with sudden volume fluctuations, a robust freight audit process provides the flexibility needed to manage complexity and maintain control.

The benefits of freight audit extend far beyond simple cost recovery. It serves as a cornerstone of effective transportation spend management, providing the visibility, control, and insights needed to navigate the complexities of modern supply chains. As companies strive for greater efficiency and resilience in logistics operations, freight audit emerges as a critical tool for achieving strategic market leadership.

Transportation Spend Management (TSM) Maturity

Global supply chain leaders face increasing pressure to drive growth while managing costs and ensuring compliance in an unpredictable landscape. Traditional freight audit and payment solutions alone are no longer enough—companies require deeper insights and strategic control over their transportation spend.

At Trax, we go beyond cost recovery. Our spend and compliance management solutions transform freight data into a powerful asset, delivering actionable intelligence that drives efficiency, risk mitigation, and cost optimization. By leveraging AI-powered analytics and real-time global insights, we help enterprises gain full visibility into their supply chain, ensuring compliance, reducing complexity, and maximizing value.

The TSM Maturity Model

Trax’s Transportation Spend Management Maturity Model is a framework that provides a roadmap for large, global enterprises to shift from a lack of visibility and control to a fully optimized and accurate data-based transportation supply chain—for all modes and geographies.

The Trax TSM maturity model consists of four stages:

  1. Reactive Stage:
    Companies at this stage focus on basic invoice processing and payment automation. They employ reactive solutions such as freight audit and payment (FAP) systems to optimize freight auditing and correct errors as they occur.
  2. Proactive Stage:
    Companies in this stage combine multiple data sources for holistic reporting and continuously improve their data management to identify errors early on. They focus on establishing robust freight audit and data management processes, leveraging reliable data as a foundation for better performance management and system optimization.
  3. Optimizing Stage:
    As companies progress, they use the data and insights gained to inform strategic decisions. With a comprehensive view of their transportation spend, companies can develop new ways to optimize operations, anticipate risks, and achieve maximum efficiency across their network.
  4. Leading Stage:
    At the pinnacle of TSM maturity, companies gain unique insights that empower them to achieve total optimization. They not only overcome obstacles but embrace them, turning supply chain resilience into a powerful value driver and competitive advantage.

Key Components of TSM Maturity

Achieving TSM maturity involves mastering several critical components:

  1. Data Integration and Management:
    Mature companies have sophisticated systems for collecting, cleansing, and normalizing data from various sources, ensuring accuracy and readiness for strategic use.
  2. Rate and Contract Management:
    TSM mature companies have full visibility and control over rates and contracts across all modes and geographies.
  3. Audit Management:
    Advanced audit capabilities, including rules-based, invoice validation, and tax audits, are seamlessly integrated into the TSM process.
  4. Cost Allocation and Accrual Management:
    Mature systems provide automated, rules-based cost allocation and accrual management, improving financial accuracy and reporting.
  5. Payment Management:
    Streamlined, automated payment processes that strengthen carrier relationships and optimize cash flow.
  6. Analytics and Reporting:
    Sophisticated dashboards and reporting tools that provide actionable insights and support strategic decision-making.

Trax Product Suite for TSM Maturity

Trax offers a comprehensive suite of products tailored to each stage of TSM maturity:

  1. Reactive Stage:
    • Freight Audit and Payment (FAP) system
    • Data compliance tools
    • Invoice auditing software
  2. Proactive Stage:
    • Rate Manager
    • Data Compliance Manager
  3. Optimizing Stage:
    • Carbon Emissions Manager
    • Claims Manager
  4. Leading Stage:
    • Advisory services, including contract optimization, network optimization, accessorial optimization, service optimization, and transportation strategy

Benefits of TSM Maturity

companies that achieve TSM maturity reap significant benefits:

  1. Enhanced visibility and control over transportation spend and processes
  2. Cost optimization across the transportation network
  3. Improved cash flow and reduced financial risk
  4. Strategic decision support through comprehensive data and analytics
  5. Network orchestration capabilities
  6. Competitive advantage through agility and adaptability

Measuring TSM Maturity

Key metrics for evaluating TSM maturity include:

  • Cash flow predictability
  • Accuracy of cost-to-serve calculations
  • Degree of process automation
  • Quality and timeliness of data-driven insights
  • Ability to predict and mitigate supply chain disruptions

Companies that have achieved TSM maturity stand out as industry leaders, capable of navigating the complexities of global logistics with confidence and precision. They are well-positioned to embrace future challenges and opportunities in the ever-evolving landscape of transportation and logistics.

The journey to TSM maturity is one of continuous improvement, where companies progressively implement more sophisticated tools and strategies to optimize their transportation spend management. With the right approach and tools, companies can transform their transportation spend function from a cost center into a strategic asset, driving efficiency and competitiveness in the global marketplace.

Future of Freight Audit

As we look toward the horizon of freight audit and transportation spend management, several trends and technologies are poised to shape the future of this critical business function. The evolution of freight audit is intrinsically linked to broader developments in supply chain management, data analytics, and artificial intelligence.

Artificial Intelligence and Machine Learning

The future of freight audit will be increasingly driven by AI and machine learning algorithms. These technologies will enable:

  1. Predictive Analytics: AI-powered systems will not only identify current discrepancies but predict potential issues before they occur, allowing for proactive management of transportation spend.
  2. Automated Exception Handling: Machine learning algorithms will become sophisticated enough to handle complex exceptions autonomously, reducing the need for human intervention.
  3. Natural Language Processing: Advanced NLP will allow systems to interpret and process unstructured data from various sources, including emails and documents, enhancing the audit process.
  4. Intelligent Data Ingestion and Normalization: AI will streamline the integration of freight data from multiple sources, automatically standardizing formats, correcting inconsistencies, and ensuring clean, actionable data for audit and analysis.

Blockchain Technology

Blockchain has the potential to revolutionize freight audit by providing:

  1. Immutable Audit Trails: Creating tamper-proof records of all transactions and shipments, enhancing trust and transparency.
  2. Smart Contracts: Automating payment processes based on predefined conditions, reducing disputes and streamlining settlements.
  3. Enhanced Data Security: Providing a secure, decentralized platform for sharing sensitive freight and payment data among stakeholders.

Internet of Things (IoT) Integration

The proliferation of IoT devices in logistics will impact freight audit by:

  1. Real-time Tracking: Providing granular, real-time data on shipment location and conditions, allowing for more accurate auditing of service levels and accessorial charges.
  2. Predictive Maintenance: Enabling better forecasting of vehicle maintenance needs, potentially impacting freight rates and service reliability.
  3. Environmental Monitoring: Tracking environmental conditions throughout the shipment journey, supporting sustainability initiatives, and potentially influencing freight costs.

Advanced Data Analytics

The future of freight audit will leverage increasingly sophisticated data analytics capabilities:

  1. Prescriptive Analytics: Moving beyond descriptive and predictive analytics to provide actionable recommendations for optimizing transportation spend.
  2. Real-time Analytics: Enabling instant analysis of transportation data, allowing for immediate decision-making and course corrections.
  3. Big Data Integration: Incorporating external data sources (e.g., weather patterns and economic indicators) to provide more comprehensive insights.

Sustainability Focus

As environmental concerns become increasingly prominent, freight audit will evolve to support sustainability initiatives:

  1. Carbon Footprint Tracking: Integrating carbon emissions data into the audit process, allowing companies to monitor and optimize their environmental impact.
  2. Sustainable Carrier Selection: Incorporating sustainability metrics into carrier performance evaluations and selection processes.
  3. Regulatory Compliance: Adapting to new environmental regulations and reporting requirements related to transportation.

Increased Automation and Integration

The future of freight audit will see:

  1. End-to-end Process Automation: Fully automated audit processes that seamlessly integrate with other supply chain management systems.
  2. API-driven Integration: Greater use of APIs to facilitate real-time data exchange between shippers, carriers, and third-party logistics providers.
  3. Touchless Processing: Achieving a state where the majority of freight invoices are processed without human intervention.

Enhanced User Experience

Future freight audit solutions will prioritize user experience through:

  1. Intuitive Interfaces: Developing more user-friendly platforms that make complex data easily accessible and actionable.
  2. Mobile Optimization: Creating robust mobile applications for on-the-go access to freight audit data and analytics.
  3. Customizable Dashboards: Offering highly configurable interfaces that cater to the specific needs of different stakeholders within a company.

As these technologies and trends converge, the future of freight audit promises to be more intelligent, proactive, and integrated than ever before. Companies that embrace these advancements will be well-positioned to achieve and maintain transportation spend management maturity, driving strategic value and competitive advantage in an increasingly complex global marketplace.

Trax's Approach to Freight Audit

At Trax, we recognize that freight audit is a critical component of Transportation Spend Management (TSM), serving as a strategic imperative for companies seeking to optimize their transportation spend. 

Our approach to freight audit is comprehensive, cutting-edge, technology-driven, and designed to deliver maximum value to our customers. Here's an in-depth look at how Trax approaches freight audit:

Data-Centric Foundation

The cornerstone of Trax's freight audit approach is our unwavering focus on data quality and integration. We employ advanced data integration tools that can seamlessly collect, consolidate, and normalize information from diverse sources, including EDI transmissions, APIs, and even paper documents. Our system is designed to handle the complexities of global transportation, accommodating multiple currencies, languages, and regional regulations.

Intelligent Automation

Trax leverages cutting-edge technology to automate the freight audit process. Our system can quickly identify discrepancies, flag potential errors, and improve accuracy over time. This intelligent automation not only increases efficiency but also allows for the handling of complex rating structures and accessorial charges with unprecedented precision.

Comprehensive Audit Coverage

Our freight audit process is designed to be thorough and all-encompassing. We audit for:

  • Rate accuracy across all modes of transportation
  • Contractual compliance
  • Duplicate billings
  • Accessorial charge validity
  • Service level adherence
  • Geographical and mileage accuracy
  • Tax and duty correctness

This comprehensive approach ensures that no stone is left unturned in the pursuit of billing accuracy and cost optimization.

Exception Management and Resolution

Trax's approach includes a sophisticated exception management system. When discrepancies are identified, our platform categorizes and prioritizes them based on potential impact and complexity. Our team of expert auditors then investigates these exceptions, leveraging their industry knowledge to resolve issues efficiently. Trax has a data asset of over twenty years that includes everything from invoices to the actions taken against exceptions.

Advanced Analytics and Reporting

Trax's freight audit solution goes beyond simple cost recovery. We provide advanced analytics and customizable reporting tools that offer deep insights into transportation spend patterns, carrier performance, and optimization opportunities. Our interactive dashboards allow customers to drill down into specific cost drivers, benchmark performance, and identify trends that inform strategic decision-making.

Global Capability, Local Expertise

With a global footprint spanning North America, Latin America, Asia, and Europe, Trax combines worldwide capability with local expertise. Our team understands the nuances of regional transportation markets, ensuring that our freight audit process is tailored to the specific needs and regulations of each geography.

Integration with Broader TSM Strategy

We view freight audit as an integral part of a comprehensive Transportation Spend Management (TSM) strategy. Our freight audit solution seamlessly integrates with our broader TSM platform, providing a holistic view of transportation costs and performance. This integration allows for more effective budget planning, accrual management, and strategic decision-making across the entire transportation network.

Customization and Flexibility

We recognize that every company has unique needs and challenges. That's why Trax's freight audit solution is highly customizable. We work closely with each customer to configure our system to their specific requirements, whether it's implementing custom business rules, integrating with existing ERP systems, or developing bespoke reporting solutions.

Commitment to ROI

Trax is committed to delivering measurable return on investment for our customers. We track and report on key metrics such as cost savings, process efficiency improvements, and strategic insights generated. Our goal is not just to audit freight bills but to drive tangible value that impacts our customers' bottom line and competitive positioning.

Trax's approach to freight audit is comprehensive, technology-driven, and strategically focused. We combine advanced automation with deep industry expertise, providing a freight audit solution that not only ensures billing accuracy but also serves as a powerful tool for transportation spend optimization and strategic decision support. In an era of increasing supply chain complexity and volatility, Trax's freight audit capabilities provide the visibility, control, and insights needed to achieve transportation spend management maturity and drive business success.

Embrace the Future of Freight Audit and Spend Management

Mastering freight audit and transportation spend management is not just a matter of financial accuracy; it is a strategic necessity for companies aiming to thrive in today’s complex supply chain landscape. As we have explored throughout this pillar, effective freight audit processes provide critical insights that drive cost savings, enhance operational efficiency, and improve overall visibility into transportation spend.

The journey toward Transportation Spend Management (TSM) maturity is transformative, enabling companies to evolve from reactive approaches to proactive and predictive strategies. By leveraging advanced technologies and a comprehensive suite of Trax solutions, companies can streamline their freight audit processes, optimize their transportation networks, and ultimately achieve a competitive edge in the market.

As you consider the next steps in your freight audit journey, remember that the right tools and strategies can propel your company toward TSM maturity. Don’t let your company fall behind in the rapidly evolving logistics landscape.

Contact Trax today to discover how our freight audit solutions can help you achieve greater visibility, control, and efficiency in your transportation spend management. Together, we can transform your logistics operations into a strategic asset that drives business success and resilience in the face of future challenges.