Hidden benefit alert: financial consolidation of shipments

November 21, 2015 Ken Klaver

As a Freight Audit company we discover many flaws in freight billing and invoicing. One major item is consolidation of shipments. Often several shipments go from 1 shipping site to 1 end destination. Leaving exceptions aside, in practice these shipments should be seen as one what would result into a lower cost then if they would be charged for separately.

ControlPay has found out that although carriers often do consolidate shipments physically but they tend to end up on the invoice as separate shipments. This results into a higher invoice than you should receive.

Why does this often go unnoticed?

Customer systems are in most cases not equipped to detect actual consolidation. So for example if a WMS, TMS or ERP system sends out several orders to the carrier at different times during the day for the same end destination it will not be consolidated in that system. If you would be doing self-billing on this out of your TMS you are actually paying the carrier more than you should!

You send out air shipments on different days but eventually it will go out on the same day on the same plane to the same end customer. Your system does not consolidate but the forwarder physically does. So financially he should do as well.

What can you save if you would consolidate correctly?

Based on our experience the average shipper can easily save 4% or more on correct financial consolidation.

 Can you do it yourself?

Yes, you can but it will take you a lot of time and effort to do this as most companies do not have the right systems or people for this. ControlPay is a specialist in this and can easily automate this for you and deliver savings and visibility while improving your rate structures.

About the author

Pieter Kinds (40) is the VP Business Development for ControlPay, Europe’s largest Freight Audit provider. He is not shy of sharing strong opinions, thoughts and views about the logistics industry and about logistics procurement, Freight Audit and TMS systems in particular. He writes on personal behalf and his views are not necessarily the ones of ControlPay.

 

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