Transportation Payment Trends Part 3: Freight Payment Strategy

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.
    Figure from American Shipper’s 2014 Transportation Payment Benchmark Study by Eric Johnson

    Figure from American Shipper’s 2014 Transportation Payment Benchmark Study by Eric Johnson

  • 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.

Why Should Freight Audit Be On Your Radar?

Paying a freight invoice without auditing it is a lot like blindly reaching into your wallet and handing a cashier everything you have in there without counting it.  Now, you wouldn’t do that would you?  No, you wouldn’t; that is why freight audit should be on your radar. Including freight bill auditing in your business model can recover anywhere from 10-12% of your annual transportation spend initially and 3-5% for long-term annual savings.

There are, of course, options for freight audit providers. Some businesses choose to audit their freight bills themselves, either manually or by using an electronic system. Others see the benefit of outsourcing their freight bills, cutting costs and saving time.

To help visual the cost differences of each auditing choice, here are the costs of processing bills as of 2012, according to American Shipper:

Domestic International
Average Shipper $6.97 $7.44
Outsourced $3.38 $4.39
In-house Systems $5.07 $6.47
In-house Manual $14.17 $15.26

As shown by the data above, the lowest cost option, for both Domestic and International invoices, is to outsource your freight payment process to companies that make Freight Audit their business. By outsourcing your freight bills you will be cutting head counts and spending substantially less while gaining a lighter workload.

TI offers multiple payment models, so that clients can choose the option best suited for their business.  We offer a “no float” option for the less risk tolerant but have maintained our float pricing option for clients looking to keep costs down.  With 6 different types of processing structures, the client has the opportunity to completely tailor their experience to fit their business model.  Trans International makes it our business to save your business time and money while still giving the process a customized feel.  When you pass off your freight bills, your business is still a part of the auditing process, sans the responsibility of doing the actual auditing.  We don’t want to leave you in the dust, we want to take you along for the ride, keeping you informed every step of the way.

Not only do our Freight Audit and Information Reporting (FAIR) services save you time and money, we also use the data from your freight invoices to create robust, ERP compatible reports so you can track and optimize your freight spend.  Your data is immediately available throughout our entire audit process.  Transparency is as important to us as it is to you.

Here are a few points to summarize why freight audit/Trans International should be on your radar:

  • Pre-audit saves you from issues with overcharges and duplicate payments, an audit will ensure you pay only what you owe.
  • We also recommend going further than just freight audit, we recommend outsourcing your freight bill processing to Trans International.  We have zero ulterior motives when handling your data and money.  Our goals are to save you money, time, and to keep you informed.
  • Using the services provided by Trans International, your company can expect a 3% to 5% recovery of your total transportation spend annually.  That’s cash back in the bank that you would not have had you not partnered with us.
  • In the last year, we saved our clients a combined $15.5 million.

Freight Audit is not a “should”, it is a “must”.  It is a time and money saver.  Freight Audit should be on your radar.

Every Supply Chain Has a Story

Each and every product sitting around you right now has a story. Where was that grown? What is this made of? Who put that together? Where has this been?

As consumers, we may think (without really thinking at all) that Product X has magically made its way, entirely in one piece, to the store around the corner but that just isn’t true. Every product you own has a story and has come together from many parts and those parts come together through the supply chain process.

A supply chain is just that, a chain. It is a process with many steps including logistics, planning, a lot of teamwork, and many different parts working together to form a whole. Every supply chain has a story.

The story begins in the production phase with raw material suppliers. Raw material suppliers provide to the tier 2 suppliers who in turn supply the tier 1 suppliers (a single business may be a tier 1 supplier to one firm and a tier 2 supplier to another, depending on what they supply). Tier 2 suppliers can be defined as the supplier’s supplier where as tier 1 means directly supplying the OEM, or original equipment manufacturer, (the company that produces the final product of the supply chain). Onto the post production side of product flow, we finally see the customers. The product is shipped from the manufacturer to the retailer who in turn sells the product to the consumer.

Your product, whether or not it is massed produced, passes through many hands on its way to yours. Throughout production, each and every product makes various stops along the way, creating the supply chain process. For the most part, every supply chain is unique, with different patterns, inter-weaving webs, third party assisters, and overall production plans.

Trans International is lucky enough to be able to play a role in many different supply chain operations. Our clients hail from a diverse array of industries: from tools to chemical engineering; from car parts to your everyday department store; packaging materials to boilers. We enter your supply chain story with our Freight Audit and Information Reporting (FAIR) services. We understand that profitability is the core of any effective business decision and stand by our commitment to increase profitability and cut costs for freight bill processing. Our clients range from tier 1 suppliers to OEMs, big or small we audit freight bills from companies of all sizes. Additionally, our role in your supply chain story does not stop with our FAIR services. Visit our website to learn more about our secure, customizable services.

Truly, every supply chain has a story. Parts come together from all over the world to create our material reality as we know it. Supply Chains are responsible for making that a reality and with great responsibility comes great costs. This is why Trans International should be a part of your supply chain story.

The Journey Begins

Welcome to the Trans International blog “Life in the FAIR Lane”. With this blog we hope to bring our followers relevant industry news, updates on our business and practices, and forward thinking ideas that we at Trans International have about your supply chain.

You might be wondering about the title we have given our blog. FAIR stands for Freight Audit and Information Reporting, which happens to be what we do here at Trans International. Our main services include cost saving freight invoice processing and auditing, comprehensive financial reporting, logistics consulting, and a completely customizable experience. We use the acronym FAIR to summarize all of the core services that we offer.

We would like to start off by highlighting one of those services and explain how we can do it to best fulfill your needs.


Security of funds entrusted to freight payment companies is of critical importance.  Trans International offers six different options for freight bill payment.   Once freight bills have been processed and verified and we have completed the freight bill audit, we offer the following:

Standard Payment with Float– our lowest price point

Payment without Float

Payment from a Segregated Trust Account

NACHA (National Automated Clearing House Association) electronic payment

Client Payment using Payment Data returned to client in requested file format

Segregated Client Controlled Trust Fund to which we have access

We have established internal controls that have allowed us to secure substantial bond protection against employee theft.  All funds entrusted to us are kept in accounts separate from operating accounts.  Float funds are placed in highly rated Moody investments.  Many of our float clients are publicly traded companies.  In many cases, client sanctioned auditors have reviewed our procedures and have consistently found zero concerns regarding Sarbanes-Oxley compliance.  We welcome such scrutiny at any time and are more than happy to answer any questions you might have.

We cannot wait to share ideas and get feedback from our followers. Join us, and share with others, so that we can explore the FAIR Lane together. We believe that “Life in the FAIR Lane” highlights exactly what we want this blog to be about; what life in the FAIR Lane means to you and your supply chain.

Check out our website to learn a little more about what we do and how we do it!