Key strategies to avoid invoice surprises
Just when you think the job is complete and you can move on to fulfilling the next order, a freight invoice arrives. After looking at it more closely, you quickly realize the invoice doesn’t match up with the information you presented on the original bill-of-lading (BOL). What happened?
As a part of the SMC³ LTL203: The Basic Fundamentals of LTL Carrier Pricing & Costing course, Chris Thacker, director of traffic at Averitt Express and Tad Blackburn, vice president of administration at Estes Express joined attendees for a virtual seminar to answer this very question and address many of the strategies shippers and carriers can use to prevent it from happening in their operations.
At the most basic level, a final invoice that differs markedly from the original bill-of-lading signals that the carrier ultimately found the shipper’s BOL did not provide accurate freight information.
Often times, this may be more of an error of omission than an actual mistake. According to Blackburn, one of the more common origins of these types of invoice disputes comes from a lack of NMFC (National Motor Freight Classification) included in the original BOL.
“The bill-of-lading is the number one cause of invoice surprises,” he said. “For example, we tend to see that about 8 percent of freight bills do not include the class or adequate information to classify the freight. In these cases, the carrier may have to guess or rely on cross-reference information, which can create discrepancies and lead to additional back and forth conversations between both parties.”
For this reason, the single biggest thing shippers can do to support an efficient and accurate BOL process is to provide as much upfront information as possible.
More specifically, there are a few types of information that shippers should aim to provide to ensure the BOL remains accurate throughout the handling and delivery process. For starters, consider the impact that freight packaging can have on density and shipment dimensions. It is important to remember that packaging needs to be produced in such a way that it can withstand the rigors of transportation. Also, make sure to note specific accessorial fees that the carrier may encounter when handling or delivering your cargo, such as specific delivery requests or challenging destinations and docking situations. Finally, if you use an alias or DBA (Doing Business As), be sure to connect that name to your brand and the company of record on your invoices—this can help ensure that the invoices you receive are in fact yours and not meant for another shipper.
Ultimately, Thacker says, it comes down to creating open lines of communication between the shipper and carrier every step of the way.
“Sales are the conduit,” Thacker said. “They might not have all the answers, but they should know who to call and bring into the conversation. Really, it’s all about what we can do on the front end to be proactive and make it easy on the lives of our transportation partners.”
Electronic Bill-of-Lading tools offer intriguing potential
While traditional physical bills-of-lading still work just fine, Thacker and Blackburn both agree the accuracy benefits of adopting an electronic bill-of-lading (eBOL) solution via a TMS make it an intriguing option as machine learning capabilities continue to evolve.
Ultimately, these eBOL tools allow for fewer sources of error to enter the BOL equation, says Thacker. Groups like the Digital LTL Council are currently collaborating on eBOL solutions through standardization and digitalization across the LTL industry.
“You are taking out one variable, human error, on the entry side,” he said. “Obviously, you still need to have good information, but it can help reduce the potential for lack of information to lead to classification and invoicing issues later on.”
One way these solutions can help is by pre-programming BOLs to require specific information in order to successfully submit—such as classification, basic density and dimensional specifications. This allows carriers to have the basic information they need to handle and transport freight as efficiently as possible. And for the shippers, it means the quote you receive is more likely to also be the price you receive when the final invoice arrives.
Interested in learning more about evolving strategies shippers and carriers can use to make more accurate costing and pricing decisions? Consider registering for SMC³’s LTL Online Education Program.
The 2021 SMC³ Online Education Hybrid Schedule has been released! Check out the hybrid course lineup.