freight audit

When Should You Hire A Freight Audit Company?


Transportation accounts for about 54% of a shipper’s total logistics expenditures. Naturally, shippers want to ensure that their freight invoices are valid, accurate and paid on time.

Transporter chargers are constantly fluctuating and are largely affected by the oil market. Shippers that do not have a firm understanding of all the nuances and intricacies of the shipping industry are vulnerable to being over-charged.

It’s estimated that 1%-2% of outbound shipments and 2%-4% of inbound shipments are miscalculated.

That’s where freight auditing companies come in. Surprisingly, 25% of companies fail to take advantage of the cost-saving benefits provided by a  freight auditing company.

But what do these companies actually do, and when should you hire them?

What Do Freight Audit Companies Do?

what do freight audit companies do

Freight auditing is exactly what it sounds like: a freight bill payment company receives its clients’ freight bills either manually or through electronic data interchange (EDI).

Once the bills are received, they are entered into the contractor’s system for immediate visibility. From here, the bills are audited for accuracy.

The auditors verify the bills’:

  • Validity
  • Mileage
  • Accessorial charges
  • Duplicate payments
  • Use of appropriate tariffs

Once the auditing process is complete, the charges are coded and then reconciled. Next, the bills are paid. Reports are provided that help complete the general ledger account coding.

Freight audit companies provide an immediate return on investment because clients know right away that they are paying the correct amount. They don’t have to go searching for mistakes or overbilling issues on their own.

Studies show that, on average, the freight industry has an invoice error rate of 5%-8%.

A freight audit company also offers cost savings. It’s not uncommon for carriers to overbill, and while these are honest mistakes, overbilling can cost a shipper a lot of money in the long run. Freight auditing ensures that these mistakes are found and corrected, offering potentially significant cost savings for shippers.

Overbilling can occur when fuel tables are set up incorrectly, or there may be accidental charges for excluded items. Because this information is entered manually, errors can and do happen – at a rate of 2-4% in some cases.

Freight audit companies offer the expertise that would take months or years for in-house staff to develop.

They have the right tools and knowledge for the job, and auditing is their only task. Their expertise can help shippers enter the international arena, which can be incredibly complex for an in-house staff to handle.

Freight audit companies will generally use one of two pricing models:

  • A percentage of the freight spend
  • Flat fee for each bill that’s audited

Each model has its own benefits and drawbacks, so it’s important to weigh these factors before deciding which pricing model works best for your company.

Freight auditing companies should provide you with detailed information on their pricing model so that you can make an informed decision.

What to Consider When Choosing a Freight Audit Company

There are several factors that should be considered when choosing a freight audit company, such as:

#1 – Time in Business

How long has the company been in business? Some of the leading freight audit companies have been around for nearly a century. If the company has only been around a few years, it’s difficult to determine whether they’re reliable or can compete with the longevity that other companies offer.

The last thing you want is a fly-by-night company that’s here today and gone tomorrow.

#2 – The Auditing Process

What is the company’s auditing process? Every company has its own process, so request a demo or ask them to explain what they do from start to finish.

#3 – Customer Satisfaction and Carrier Reputation

Are customers happy with the company’s service? You want to work with a company that cares about its customers and is quick to resolve problems when they arise.

Additionally, you want to consider carrier reputation. There are some companies in this business that are difficult to deal with, and payments are made more slowly as a result.

#4 – Data Management

Every freight audit company has its own policy when it comes to data retention. Ask about how the company handles data capture, recording, retention and management. Also, find out how you and others in your company can access data and documents.


3 Best Freight Audit and Payment Companies

Now that you understand the benefits of a freight auditing company, you may be wondering which one to choose.

Here are three of the best freight audit and payment companies in the industry:

Cass Information Systems

Cass Information Systems

Cass Information Systems has been in business for more than 100 years. Their freight auditing and payment services include:

  • EDI setup
  • Exception handling
  • Rate management
  • Accruals
  • GL coding

Cass can also handle:

  • Rule 11
  • White glove service
  • Pool shipments
  • Milk runs
  • Stop-offs
  • Spot quotes

The company’s goal is to help their clients save money while freeing up time and resources to focus on core business tasks. They employ advanced methods to avoid duplicate payments.

Annually, Cass processes more than 37 million freight and parcel invoices, with a value of more than $28 billion. Globally, the company secures payments to 13,000 carriers.



Data2Logistics offers 50 years of global freight audit services, including:

  • Freight invoice processing
  • Freight payment services
  • Business analytics
  • Logistics tools

The company offers automated invoice processing for all types of transportation. In addition to their freight audit software solution, the company also uses an experienced auditor to further review and refine the auditing process.

Data2Logistics uses both human and machine intelligence to ensure that all invoices are audited properly.

CT Logistics

CT Logistics

CT Logistics has been in business for more than 90 years (founded in 1923). They have five global locations and have saved their clients more than $12 billion.

Their AuditPay solution ensures that invoices and bills of lading are accurate and paid on time. They work with their clients to ensure that their specific needs are met.

In addition, CT Logistics offers a 24/7 real-time WebTools service. The company claims to offer an average ROI of more than 10 times your service fee when using FreitRater and AuditPay services together.

CT also claims that outsourcing freight bill auditing and payment can help clients recover 3%-7% of their overall freight spend.