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THE FREIGHT PAYMENT PROCESS has changed very little in decades. When you boil it down, freight payment is the exchange of cash for a delivery service and freight settlement is the exchange of cash for both a service and the complete associated data covering that transaction.
Amazingly, freight payment error rates reported by post-audit firms have remained steady despite huge investments by shippers, carriers, and 3PLs in new systems to accurately calculate rates, track service levels, and perform match-pay audits of invoices.
Cy Grasso, chairman of Trans-Audit, a major postaudit firm, shared recently that they're having a record year recovering overcharges for their many shipper clients. This lack of progress is due to continued use of multi-step, multi-party match pay processes.
There is much to be done in simplifying freight rate storage, automating payment processing, eliminating match-pay, and thereby reducing errors before we broaden the discussion to real freight settlement.
Leading companies are at least insisting that freight payment be replaced with settlement that,...