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.

Transportation Payment Trends Part 2: Auditing Practices

Last week we shared the first of our three-part series of posts inspired by American Shipper’s Transportation Payment Benchmark Study, which surveyed nearly 190 payers (shippers and 3PLs) to uncover insights and trends in freight payment technology, auditing and strategy. This week we’ll discuss the study’s findings on current auditing practices.

Auditing is an important process for any business, especially freight. Performing audits both before and after making payments ensures that finances stay on track. As the following findings show, many businesses are diligent about auditing, while others are leaving room for error.

  • The Finding: Two-thirds of system-based respondents see value in their audits, whereas 44 percent of manual respondents find audits valuable.
  • What It Means: Auditing manually is very time consuming. When using a system to audit, the respondents saved time and in turn were better able to recognize the value of audits.  

FreightAuditTrends

  • The Finding: Forty-four percent of manual shippers were uncertain if their audit savings met expectations.
  • What It Means: The time commitment and margin of error that results from auditing manually can lead to uncertainty and discontent.
  • The Finding: Sixty percent of the manual shippers surveyed had never hired a third party to conduct an audit of their ability to accurately pay freight bills, had only conducted one of these types of audits in the last five years, or were uncertain if an audit of this type had been completed. Whereas only 32 percent of systems-based shippers hadn’t or were uncertain if an audit had been conducted by a third party audit in this timeframe.
  • What It Means: Systems-based shippers are more aware of their payment process and better equipped to have a third party review it. Meanwhile a significant number of manual shippers are unable to be certain that their payment processes are being handled efficiently or accurately.

This freight payment audit data demonstrates something we could easily predict – that systems-based shippers are more aware and certain of their current payment processes. Furthermore, because they don’t have to dedicate time and effort to manual auditing, they are better able to recognize the value of audits.

At Trans International, we’re proud to provide our clients with a number of services that can improve auditing and payment systems. We offer freight bill auditing, reporting, and payment systems to easily organize, assure and fulfill our clients’ freight payments.

We’re curious, how does your company handle freight payment and audits? Let us know in a comment or contact us directly and we’ll do whatever we can to provide the system you’re looking for.

Transportation Payment Trends Part 1: Technology

Being the best in your business means constantly staying on top trends. At Trans International, we make a point of consuming all of the industry research we can get our hands on, so that we can serve as knowledgeable advisors for our customers. This blog post is the first of what will be a three-post series inspired by a study we recently received from American Shipper.

American Shipper’s Transportation Payment Benchmark Study surveyed nearly 190 payers (shippers and 3PLs) to provide insight on trends in freight payment technology, auditing and strategy. We’ll share highlights from the study on each of these topics in the coming weeks, starting with freight payment technology.

Below are some of the survey’s most interesting findings about trends in freight payment technology:

  • The Finding: More than a quarter of customers don’t use any technology to pay freight bills.
    What It Means: A fair amount of shippers are not comfortable using an automated payment system, or have not found one that fits their needs and budget.
  • The Finding: When dealing with international payment, large shippers are twice as likely to handle it manually, where as small and medium shippers are 50% more likely.
    What It Means: Automated freight payment platforms are more available domestically and many companies are likely expecting the platforms they currently use to extend their services internationally.
  • The Finding: About 40% of domestic payment and 25% of international payment is outsourced.
    What It Means: With a large amount of payment being outsourced, companies need the ability to monitor transactions to a higher degree to ensure accuracy.
  • The Finding: The number of respondents using one freight payment system for all of their needs was lower this year than last.
    What It Means: Companies are becoming more interested in using payment systems for a variety of specific needs, but are struggling to find one system that fits them all.
  • The Finding: More than three times as many systems-based respondents are planning to extend payment terms this year over last.
    What It Means: Using an automated shipping process provides respondents with the free time to fully analyze their own strategies and tactics, such as payment terms.

Overall, this data told us that today’s shippers are looking for payment systems that are very user-friendly and offer international services, customizability, and an easy way to monitor transactions. All of these components are currently included in Trans International’s Freight Bill Payment options and software products, meaning we offer all of today’s most-desirable payment services through one provider.

This is something we’re very proud of, but it’s not enough to just be on top of the trends – system providers need to be able to fulfill your specific needs, too.

That’s why we want to know: Is there any technology you’d like to see from an automated shipping payment system that wasn’t on this list? Tell us in a comment below or contact us directly and we’ll do whatever we can to provide the system you’re looking for.

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.