What to Expect from a Freight Audit Process
Imagine this: You’re running a growing business, orders are flying out the door, and your logistics partners are working around the clock. But every month, your shipping bills seem… off. You notice discrepancies, duplicate charges, and fees that weren’t part of the deal. Sound familiar? That’s where a freight audit process can be a game-changer.
Whether you’re new to logistics or a seasoned supply chain pro, understanding what to expect from a freight audit process is key to optimizing your shipping spend and avoiding costly mistakes.
What Is a Freight Audit, Really?
At its core, a freight audit is the process of reviewing, verifying, and validating shipping invoices to ensure accuracy. Carriers sometimes make billing errors—charges for services not rendered, incorrect rates, or even duplicated invoices. A freight audit catches those errors and ensures you’re only paying for what you agreed to.
But it’s more than just a line-item check. It’s an essential step toward strategic cost control, compliance, and visibility across your supply chain.
Why Freight Auditing Matters
Still wondering if a freight audit is worth the time and effort? Consider this:
- Billing errors in freight invoices average 5% of total shipping spend, according to industry estimates.
- Manual invoice processing costs companies an average of $12–$30 per invoice, says a report by the Aberdeen Group.
- Audits can uncover not just billing errors, but also opportunities for contract renegotiation and carrier performance improvement.
In short, a freight audit isn’t just about catching mistakes—it’s about gaining leverage, saving money, and building a smarter shipping strategy.
Step-by-Step: What Happens During a Freight Audit Process
Let’s break it down. Here’s what typically goes on behind the scenes of a professional freight audit:
1. Data Collection and Invoice Aggregation
Your freight invoices—whether digital, paper, or EDI—are gathered from all carriers. This step is crucial because data consistency is the foundation of an accurate audit.
2. Data Normalization
Since invoices come in different formats, they must be standardized. Think of this like translating different languages into one common tongue so that comparisons and validations can be run.
3. Rate and Contract Validation
Here, the auditor checks whether the charges align with your contracted rates. Any variances are flagged. This step often reveals overcharges or non-compliance with your agreed terms.
4. Accessorial Charge Verification
Accessorials—those extra fees for services like lift-gate delivery or residential surcharges—are verified to ensure they were legitimately applied.
5. Duplicate and Error Detection
Auditors scan for duplicate invoices, mismatched shipping data, or incomplete documentation. Advanced tools may use AI to spot subtle inconsistencies.
6. Dispute Management and Resolution
When errors are found, they’re disputed with the carrier. Your audit team handles the back-and-forth to reclaim overcharges or secure credits.
7. Reporting and Insights
You’ll receive detailed reports outlining errors, savings, and trends. Some platforms even offer dashboards so you can track performance in real time.
8. Continuous Improvement
Freight audits aren’t a one-and-done deal. Regular audits help you spot patterns, improve budgeting, and negotiate better rates.
Choosing a Freight Audit Provider: What to Look For
Not all freight audit services are created equal. If you’re outsourcing the process, here are some qualities to prioritize:
- Technology Integration: Can they plug into your existing TMS or ERP?
- Multi-Modal Capabilities: Do they audit all types of freight—parcel, LTL, FTL, international?
- Global Reach: Especially important for companies with cross-border shipping.
- Dispute Resolution Expertise: A good provider doesn’t just flag issues—they resolve them.
- Transparent Reporting: Real-time dashboards, trend analytics, and customized reporting options.
Some of the leading names in the space include Cass Information Systems, ControlPay, and Trax Technologies.
Benefits Beyond the Balance Sheet
A freight audit isn’t just about cost recovery. Here’s what else you stand to gain:
- Enhanced Visibility: Understand your shipping patterns across regions and carriers.
- Better Compliance: Ensure alignment with contracts and shipping regulations.
- Time Savings: Automate tedious invoice reviews and free up internal resources.
- Stronger Carrier Relationships: Fair audits encourage accountability and transparency.
- Data-Driven Decisions: Use audit insights to optimize routes, modes, and partnerships.
Common Challenges and How to Overcome Them
Even with all these benefits, freight audits can hit a few snags:
- Data Discrepancies: Inconsistent formats or incomplete shipping records can delay audits.
- Limited In-House Expertise: Some teams simply lack the time or skills for detailed invoice reviews.
- Pushback from Carriers: Disputes may lead to tension if not handled professionally.
Pro Tip: Automate where possible, and lean on experienced third-party auditors who know how to manage disputes tactfully.
Conclusion: Making Freight Auditing Part of Your DNA
If you’ve made it this far, you probably agree—freight audits aren’t a “nice to have.” They’re essential. With global shipping costs fluctuating and carriers under pressure, every penny counts.
Start by auditing your invoices monthly or quarterly. Track the savings. Build that data into future contract negotiations. And over time, freight auditing won’t just be something you do—it’ll be part of how you do business.
Need help getting started? Consider consulting a freight audit provider who can tailor the process to your business.
FAQs About the Freight Audit Process
1. How often should I conduct a freight audit?
Ideally, audits should be conducted monthly to catch errors promptly. However, smaller businesses may start with quarterly audits and scale up.
2. Can I do a freight audit in-house?
Yes, but it requires trained staff and access to contract/rate data. Many companies prefer outsourcing to specialized providers for efficiency and accuracy.
3. What types of freight can be audited?
Everything from parcel and LTL (less-than-truckload) to FTL (full-truckload), air, ocean, and even intermodal shipments can be audited.
4. What tools are used in freight auditing?
Audit software often includes AI-powered invoice matching, TMS integrations, reporting dashboards, and automated dispute workflows.
5. Is freight auditing only about saving money?
Nope! It also improves compliance, boosts operational efficiency, and helps you make smarter, data-informed shipping decisions.
References:
U.S. Department of Transportation. (2023). “Freight Facts and Figures.”
Aberdeen Group. (2022). “Invoice Processing Benchmarks.”
Forbes. (2023). “Logistics Trends That Will Shape 2023.”
HubSpot. (2023). “Why Businesses Are Investing in Supply Chain Visibility.”
Logistics Management. (2022). “Freight Audit and Payment Solutions.”