Freight Audit & Pay
The process of auditing carrier invoices against the contracted rate card, accessorial schedule and SLA, then settling — typically recovering 1–5% of spend on errors.
01What it is
The process of auditing carrier invoices against the contracted rate card, accessorial schedule and SLA, then settling — typically recovering 1–5% of spend on errors. The discipline matters because transportation is typically 40–60% of total logistics cost, the largest single driver of customer experience after product quality, and a moving target as carriers update tariffs, accessorials and surcharges every cycle. A warehouse that runs Freight Audit & Pay well treats it as an engineered subsystem with current rate data, automated decisioning at dispatch, complete event capture and a closed loop on freight spend audit.
- Carrier rate cards are loaded current — not the version from contract signing.
- Service selection is automated against weight, dimensions, zone and SLA.
- Manifest and tracking flow on APIs — not email or portal scrape.
- Accessorials (fuel, residential, oversize, redelivery) are reconciled per shipment.
- Freight invoices are audited line by line against rated charges.
02Typical execution flow
| Stage | Activity | System |
|---|---|---|
| Plan | Mode / carrier / route selection | TMS |
| Tender | Offer to carrier(s) | TMS / EDI |
| Manifest | Carrier file with shipment list | Carrier API |
| Label | Compliant parcel or LTL labels | WMS / TMS |
| Dispatch | Trailer load and seal | WMS / YMS |
| Track | Status events to customer | Carrier API |
| Settle | Audit and pay | Freight audit |
03Execution and controls
- Refresh rate cards every cycle — fuel surcharges and accessorials move quarterly or faster.
- Validate cube and weight at the pack station — not estimated from item master alone.
- Reconcile every accessorial against the contracted schedule before payment.
- Track on-time performance per lane and carrier — averages mask the problem carriers.
- Pre-tender LTL and FTL loads when consolidation opportunities exist.
04Common mistakes
- Rate shopping disabled because one carrier is the 'preferred' one — paying premium across the board.
- Manifest by email — late, error-prone and unauditable.
- DIM weight ignored — paying for air on every oversize carton.
- Accessorials accepted at face value — annual recovery opportunity left on the table.
- Single-carrier strategy — entire dispatch operation hostage to one outage or rate hike.
05Cross-industry examples
- E-commerce parcel — multi-carrier, rate-shop on every order, DIM weight dominates economics.
- B2B distribution — LTL with consolidation and zone-skip strategies.
- Cold chain — temperature-controlled lanes and reefer-specific carriers.
- Hazardous goods — DG-trained carriers with mode-specific surcharges.
- Heavy industry — FTL with backhaul programmes against return lanes.
06How V5 Ultimate handles Freight Audit & Pay
Frequently asked questions
Q.When is LTL cheaper than parcel?+
Generally above ~70 kg or 5+ cartons going to the same address — break points vary by carrier and lane.
Q.Why does DIM weight matter?+
Because carriers charge the greater of actual or dimensional weight; oversize light cartons can cost double their actual freight.
Q.What recovery rate is typical from freight audit?+
1–5% of total freight spend is a common recovery rate from invoice error, duplicate billing and accessorial mismatch.
Q.Is single-carrier ever better?+
Yes — at very low volume, the simplification can outweigh rate-shop savings; at scale, multi-carrier is strictly better.
Q.What is a zone-skip strategy?+
Consolidating parcels by destination zone into LTL line-haul, then injecting deep into the carrier network — bypassing origin-zone sortation cost.
Primary sources
Further reading
V5 Ultimate ships with the Freight Audit & Pay controls already wired in — audit trail, e-signatures, validation evidence. Free trial, no credit card, onboard in days, not months.