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5 Common Errors in LTL Freight Costs That a FedEx Audit Can Uncover

On average, transportation accounts for around 10% of shippers’ gross expenses. Many are unaware of just how much they’re overpaying until they request a FedEx audit. According to FreightWaves, 80% of carrier invoices have inconsistencies or errors, a quarter of which warrant rejecting the invoice completely.

Shippers being overcharged accounted for 15%-20% of errors and, on average, pricing discrepancies amounted to paying between 8% and 10% more than they owed. This could easily amount to tens or hundreds of thousands of dollars annually. 

Errors happen across shipping methods. However, LTL shipping is more complex, and many shippers are less familiar with the process, making errors harder to detect. Let’s go over five common costly LTL shipping errors—by shippers and carriers—and discuss how a FedEx audit could catch them, saving you thousands.  

1. NMFC/Freight Class Errors

LTL shipment rates are based on freight class and NMFC number. Freight class is based on “transportability,” or level of difficulty to transport a shipment. The NMFC (National Motor Freight Classification®) number identifies specific commodities in each freight class.

Shipping costs depend on these two numbers. So when they’re incorrect, it matters. Use the NMFC Directory by purchasing a physical copy or subscribing to the searchable digital database to determine the correct number. 

It’s not perfect, though. NMFC numbers are standardized, but not every commodity has its own NMFC number. You may have to use the closest match, possibly leading to mistakes or disagreements with carriers. The directory is periodically updated, so mistakes also occur due to outdated information. If your information is incorrect and the carrier reclasses your shipment, you could also incur an additional fee.

2. Unclaimed Refunds

Many carriers, including FedEx, offer an on-time service guarantee. So late delivery, by even a single minute, can result in a refund. Between 1% and 5% of carriers’ deliveries are late, but few businesses have the desire or resources to track deliveries down to the minute and file for refunds. But without a FedEx audit, you might never uncover late deliveries.

3. Rate Calculation Errors

Many people accept shipping invoices at face value and pay whatever the carrier charges. Despite this confidence, up to 2% of invoices don’t have accurate rates. There are many ways for an invoice to be inaccurate, but let’s go over two prime examples.

Double Billing

Often as a computer error, it’s not uncommon (with a frequency of about 2%) to be charged twice for the same shipment or service. This could result in an average 2% increase in your total shipping costs.

Inaccurate or Unapplied Discounts

Many shippers have negotiated rates and discount agreements with specific carriers. However, this doesn’t help if those rates aren’t applied. It’s an easy mistake to make and just as easy to miss.

4. Suboptimal Contract Terms

Determining carrier contract favorability can be tough. They’re difficult to compare since carriers all use different rate tariffs. Also, their minimums, discounts, and included services vary. Many contracts have high minimums, include unused services, and/or charge fees for services you actually need.

Furthermore, the options can be complex and confusing. It can be hard to tell if it’s better to:

  • Use an older tariff with lower base rates and then get a modest discount, or
  • Use a more recent tariff that may have higher base rates in conjunction with a higher discount.

So many factors make it hard for shippers to pick their best option. A FedEx audit uses the expertise of knowledgeable professionals, advanced proprietary data and information, and state-of-the-art technology to make it simple.

5. Avoidable Fees

Accessorial fees are a big issue for shippers. They can add as much as 35% to your starting cost. In a high-volume business, it can be easy to miss just how often accessorial charges inflate your costs. During a FedEx audit using comprehensive data analytics, though, it’s hard to miss.

What Is a FedEx Audit, and How Can It Help? 

A FedEx audit is a detailed examination of your invoices to validate them, often resulting in clients recouping 8% of their shipping costs. Expert auditors will thoroughly review and validate your charges to ensure you aren’t overpaying. Powerful software can then:

  • Reassess calculations
  • Do a comprehensive review of your data
  • Check for possible discounts, savings, and refunds
  • Analyze patterns for further insights

At Util Auditors, our experts have a long record of success, providing clients with untold savings and countless refunds. We’ll help you stop overpaying and get back every dollar you’re owed at no upfront cost to you. With peak season approaching, it’s especially important to get your pre-holiday FedEx audit done before Santa (and FedEx) start delivering gifts.

Contact Util Auditors today and request a completely risk-free FedEx audit from our experienced specialists to make sure none of these common LTL errors are costing you money.

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