Today’s post is the final of our three-part series inspired by American Shipper’s 2014 Transportation Payment Benchmark Study. We discussed payment trends in the first post and auditing practices in the second. Now, we’re digging into the trends around freight payment strategy.
No two shippers follow the same freight payment strategy. Some are eager to adapt new technology, while others are only comfortable keeping things manual. Some work with vendors while others prefer to stay in-house. Sometimes the finance department pays the freight bills, other times it’s the logistics team. That said, some common trends still emerged.
- The Finding: This year, 45% of large shippers said that buying decisions for freight payment systems were handled jointly by the finance and logistics departments, and 43% said those decisions were left solely to the logistics department – compared to last year when more than 50% said it was only the logistics department’s decision.
- What It Means: More companies are seeing the importance of involving finance in this decision – one which has the potential to cause systems conflicts if not agreed upon.
- The Finding: About one in 10 large shippers and one in 20 small/medium shippers plan to invest in freight payment technology over the next year, meanwhile about 25% of shippers still handle payment manually.
- What It Means: One conclusion is that many shippers do not have the available funds or are not willing to upgrade their shipping payment method – an investment that could save them both time and money. An alternative inference is that, since many of the respondents are international shippers, they have not yet found a technology that can service their international freight payment
- The Finding: About 30% of respondents have funds available to invest in a freight payment system.
- What It Means: Regardless of desire to purchase or upgrade freight payment systems, the majority of shippers don’t have the financial backing to invest in the technology.
In summary, many shippers are missing out on the efficiency-creating, money-saving benefits of automated freight payment systems – in large part, due to lack of funds devoted to process technology.
A key way to improve these numbers (saving shippers money in the long run) is through awareness and education. The logistics and finance departments at these companies need to be informed of the money- and time-saving benefits of automated freight payment, as well as the current technology offerings.
That’s something we can help with. At Trans International, we service both domestic and international shippers with software for freight payment, auditing, reporting and more.
We can fulfill the needs of shippers who’ve been waiting for international options. And for those who are ready to invest but need assistance presenting a case to their internal team in order to receive funding, we have the numbers and research to help.
Just contact us directly and we’ll do whatever we can to provide the system you’re looking for, with an explanation of the advantages it can provide for your company.
In the meantime, we’d love to know how your company fits into the current freight payment trends. Tell us in a comment below.