10 reasons why you should stop paying your carriers via Freight Payment providers
Unfortunately the Freight Audit & Payment industry was recently negatively in the news because of serious fraud with a company that was being the payment middleman between Shippers and Carriers. The Freight Payment set-up is quite old and initially started due to the heavily regulated transportation market back in the day .Nowadays companies still outsource their payment to providers while the industry is very much deregulated.
In that light I strongly believe it is time to bring payment, not audit, in-house. Here is why:
· Freight Payment is not regulated which means there is no standard that companies need to adhere to.
· The money could be to skim off money like a pyramid or Ponzi scheme almost. Fraud cases of IPS Worldwide, Trendset and Transvantage serve as examples.
· Carriers often have to wait longer for their money.
· Many excuses to no pay on time can be made without your staff or carriers suspecting anything.
· Company management look at contract value(service fees) and not the actual money you are paying to a third party so the importance and impact of the money flows are often overlooked.
· Freight Payment companies don’t operate under a license and are not monitored by an industry organization
· Any good financial ERP package integrates smoothly with banking applications so paying by yourself is actually easy
· Paying directly will save money in fees and interest!
· Probably there are more companies out there that handle freight payment in a questionable matter to put it mildly.
· If your Freight Payment company runs into trouble, your money is not protected.
And sure there are the two only banks in the Freight Payment world, Cass and US Bank, who will make you believe your money is in no better hands than theirs and that may well be the case. But, why feed a banking system that is more interested in getting your money for lending to others, overnight fees and interests than actually delivering a top audit service for you that delivers real value in logistics data intelligence?
ControlPay was founded in 2002 in the Netherlands and has over 270 employees that work for many large multinationals with global audit needs. ControlPay is the largest Freight Audit provider in EMEA and has offices in the Netherlands, Germany, Ukraine, Brazil, North America and Asia.