Carrier payment affects both carriers and shippers. Recently the market has been in favor of the shipper and many of the articles I am reading lead me to believe this will continue through the end of the year. After that, however, shippers most likely will be faced with a shifting freight management landscape which favors carriers. This means creating mutually beneficial relationships with carriers now is extremely important. There’s a lot at stake for shippers, who must figure out how to mitigate pending rate increases and still receive capacity from the carriers. To do this, your company must become a “shipper of choice” so carriers will want to haul your freight, because their overall cost is lower. One element of this transition is to streamline and optimize your freight payment system so shippers get paid quickly. RateLinx Intelligent Invoice Management is the perfect software solution to help you do just that.
The Challenges of Paying Freight Carriers
Visibility and speed are the biggest challenges that shippers face in paying freight carriers. Shippers often don’t have visibility to why charges aren’t matching their expected values. This leaves shipping managers many questions and few answers. Are the number of miles right? What about the weight or the rate-per-mile? Did the tender change? Is the invoice correct? Most importantly, how do you do all of this as quickly as possible so the root-cause can be determined and the payment can be posted on time? Believe me, the payment cycle is something that all carriers look at when they evaluate a shipper. Having a predictable payment cycle that doesn’t result in balance due bills cuts down on the carrier’s internal costs. This is a big part of becoming a shipper of choice.
Most of the time, shippers take one of two less-than-ideal approaches to solving these issues. One approach is to build tolerances into the rate matching to allow for invoices that are “close-enough.” This lets the vast majority of the invoices to move through the system quickly. The other approach is to “short-pay” everything and make the carrier figure out what’s correct and what’s not. Both these solutions are fundamentally flawed, creating more work for both the shipper and carrier, and increasing costs and inefficiencies on both sides.
A Better Way to Manage Freight Payment
Thankfully, there is another way. RateLinx Intelligent Invoice Management (IIM), provides shippers the visibility they are missing and the speed they require.
IIM’s process is built on gathering complete data, cleansing it and standardizing it. With IIM, it’s easy to know if the freight invoice is being billed based on the shipper’s negotiated rates with the carrier. IIM compares the tender record to the invoice’s move details to ensure that the carrier did perform the shipment per the shipper’s requirements. It then compares all of the data components that a rate is derived from, such as the number of miles driven, the weight, the ship date, etc. and pinpoints the reason for any discrepancy.
With this shipping intelligence, the shipper is able to have a very quick conversation with the carrier about any billing issues before the invoice is paid. It also allows the carrier and shipper to agree on the amount being paid. By doing this in real-time, invoicing issues can be corrected as soon as they are noticed, preventing balance-due bills from being generated. With IIM, the goal is to collect complete data, not short-pay a carrier. That’s what makes it better than other freight payment services in the market.
Creating True Partnerships Between Shippers and Carriers
At its core, the concept of being a shipper of choice is based on the idea that shippers should be looking to partner operationally with their carriers. By capturing clean complete data with IIM, shippers can have a different conversation with their carriers. This allows the relationship to become a partnership where they are collaborating on how each side can help the other operate better. The noise around incorrect invoices has been eliminated, allowing for more strategic conversations to be heard.
The result is a true “win-win” situation for both shipper and carrier. Shippers save money while cultivating relationships with high-performing carriers. Because the root cause of freight invoicing issues is identified so quickly, carriers find that IIM lowers their workload, removes a lot of the guess work that previously existed and – most importantly – gets them paid faster.
In today’s competitive business environment, your company can’t afford not to be a shipper of choice. By using Intelligent Invoice Management to create a data-driven, strategic approach to carrier payments, you can start optimizing your freight management practices. If you’re interested in getting started, don’t hesitate to send me an email.