The Real Cost of Shipping Errors
Even the best shipping departments make mistakes.
Some reports estimate that 5 percent of your total shipping costs are lost each year due to shipping errors. While a small portion of this comes from warehouse issues and damaged goods, the majority of shipping errors stem from faulty invoices. Across the shipping industry, an average of 2 percent of all invoices contain errors.
The Most Common Invoice Errors
There are quite a few opportunities for human error and miscommunication, especially when managing multiple local and regional carriers.
Fuel & Shipping Miscalculations
The exact size or weight of a product can be hard to estimate. When you’re shipping large quantities, a couple pounds of deviation can make a big difference. Either you get overcharged, or your carrier claims that you weren’t charged enough.
Fuel estimates can also fluctuate, especially for longer delivery routes. Since miles per gallon and diesel prices are always subject to change, you could be losing out on thousands of dollars from a carrier overestimating their freight.
Some deliveries require tools or services beyond the scope of a normal pickup. Lift gates, gated residences, or limited access deliveries can all be added to invoices as accessory charges.
While some are necessary, it can be difficult to determine how many of these charges are legitimate.
If your shipment isn’t ready for pickup when your carrier arrives, you’ll likely get charged a detention fee for the extra time spent. Usually this hourly fee is decided beforehand, but there are many cases where the carrier does not stand by the agreement. In some cases, they charge you a higher hourly rate, or charge you for 6 hours of detention instead of 3.
A large amount of money (and time) is lost simply because details were not inputted correctly. When items are unavailable or sent to the wrong address, you’re responsible for shipping costs back to the warehouse, and then processing the item for re-delivery.
Aside from the immediate costs, you lose something much more valuable — the trust of your customer. According to Christopher Morgan, 29% of all shoppers will abandon a retailer after just one incorrect delivery. Not to mention the potential for negative reviews.
That’s a lot of future revenue lost because of an avoidable mistake on the invoice slip.
The Cost of Invoice Audits
The best way to cut back on errors is to do regular audits of your invoices.
According to Shipware, the average internal audit costs $11-$12 per invoice. These can add up, especially when an audit doesn’t find any errors or provide enough savings to be worthwhile.
With multiple shipments leaving your warehouse everyday, invoices can be especially tough to audit when dealing with a mix of local and regional carriers.
Individual companies often have their own terminology that makes certain items hard to catch through routine audits. Not to mention actually challenging the errors with the vendors — the entire process can take a lot of time and energy.
Does that mean you should skip auditing? Of course not. You just need a better way.
A Better Solution to Manual Audits
When you work with Concise to manage your local and regional shipping, all of your audits are pre-verified through our platform.
This is possible because every single one of our vendors is vetted and standardized in our system. We know the exact rates from each vendor, and we get shipping updates on every single package.
Before you pay a single penny to any of your vendors, you’ll know that each item is properly accounted for. You will only pay for services rendered, and human error issues like sending to the wrong addresses will be essentially eliminated.
No need to pay for a third-party auditor, or ask members of your team to learn complicated auditing software.
If you want to integrate pre-audited invoices into your supply chain, along with other features like universal tracking and performance monitoring, contact Concise and see how to make shipping intelligence work for your business.