Insider Blog

Reduce Invoice Surprises

Ideally, invoicing shouldn’t be complicated. The carrier charges the shipper for the freight, the carrier gets paid, and life moves on. But in practice, all the complexities associated with LTL inevitably bleed into the invoicing process. It’s almost a matter of course that LTL will come with incorrect or avoidable charges. The third session in SMC³ LTL Online Education’s 2023 LTL203: LTL Freight Pricing live seminar hybrid series focused on the challenges of reconciling invoices in the world of LTL. Joined by Tad Blackburn, VP of administration at Estes Express Lines, and Niki Bolton, the chief strategic operations officer and senior truck auditor at AMTR, the session gave a well-rounded view of invoicing issues—looking at them from the perspectives of both carriers and shippers.

An invoice isn’t just a document. It’s a process. Both speakers noted that invoicing usually begins at the bill of lading, but sometimes even before—at account setup. To ensure the accuracy of invoicing, it’s important that the bill of lading be as clear and concise as possible. Blackburn and Bolton both emphasized the importance of having a bill of lading that doesn’t just simply amount to an itemized list. It’s also important that the class of a particular shipment is clearly noted.

“How you’re represented in a bill of lading is how a carrier should have you represented in their system,” said Blackburn. “The more information you have on that piece of paper, the more you’ve increased the potential for errors—sometimes exponentially … information must be clearly presented.”

It was noted that sometimes terms are not clearly stated on a bill, which can lead to confusion or errors in the invoicing process. Moreover, when freight bills are entered into a system, they’re often typed very quickly, which can lead to errors. Information that doesn’t migrate seamlessly from the world of paper to digital platform can become a major roadblock. The amount of information to provide on a bill can also cause confusion. Too much and you risk inundating the carrier with details. Too little and there won’t be enough to properly categorize the freight.

“Shippers need to realize that there’s a balance between having too much versus too little information,” said Bolton. “Both can work against you. We’ve seen cases of incomplete addresses … how can the delivery be completed? Remember: Information is supposed to help you and the carrier.”

“You see some word descriptions, and it will just say ‘freight’,” added Blackburn. “That’s literally what they put as the product. That helps nobody, and it makes it extremely difficult.”

Including third-party shipments introduces a new layer of confusion, as shippers will often use their own bill of lading rather than the one provided to them by the third party. Typically, the required information is different between two bills of lading, and this makes it difficult for the third party to recognize the shipment and match it up with what is in their system. This can lead to delayed payments and confused carriers.

Certain technologies have made the invoicing process far easier, such as dimensioners. Dimensioners provide a much greater sense of the amount of trailer space a shipment is taking. The increase of density items, as well as the widening umbrella on how commodities are described, have made dimensioners extremely useful to carriers. For shippers, dimensioners can help at a macro level. For example, if you have certain products that overhang your pallets and are getting crushed during shipment, a dimensioner gives you the information necessary to know why this is happening and adjust accordingly. Fortunately, dimensioner technology is coming down in cost, allowing many more shippers to purchase it—and this trend will likely continue.

“Shippers are really looking at ways to eliminate air voids in handling units, as well as any pyramiding or overhang,” said Blackburn. “And I know from a carrier side, if something gets lost, we can go back to the dimensioner photo and say, ‘okay, here is what that shipment looked like originally.’”

“[Dimensioners] help streamline the process,” added Bolton. “Data is key. The carrier can utilize it again, push it back to the shipper, and everybody can come to the table with more realistic expectations, which I think helps in transparency … [Shippers and carriers are] not trying to work against each other. We’ve got to come together and help each other out so we can both be successful in what we’re doing.”

Blackburn and Bolton also detailed the advantages of the much-heralded digital bill of lading, which will help facilitate invoicing by cutting out the process of converting handwritten information to digital information. The advent of the electronic bill of lading will eliminate keystroke errors and allow the information in the shippers’ systems to appear exactly as it does in the carriers’.

“The electronic bill of lading is just going to continue to grow and the barriers to entry of that technology are going to become much lower,” predicted Blackburn.

The non-standardization of bills of lading can sometimes create situations where two BOLs exist with two different pro numbers and two different rates and pricing standards for an invoice.

“[In these cases] we have got two invoices, two bills of lading, and a lot of confusion,” said Bolton. “That’s not helpful to anybody. So it will be useful to be able to keep it to just one bill of lading, which is complete and concise with all the information needed.”

But the panelists warned that technology is not always a savior, pointing out that advances in tech have sometimes led to fewer phone conversations with clients and colleagues—leading to a less dynamic exchange of information and limited relationship building. They also warned that tech does not relieve carriers or shippers of their responsibility to know and understand their industry.

“It doesn’t mean that you don’t need to know the history of things, how charges have unfolded over the years, why they exist, or why a carrier needs to be paid for a lift gate delivery … you can’t fall into that trap,” said Bolton.

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Categories: 3PL, API, Carrier Relations, Data, Education, Freight, Logistics, Logistics Service Providers, LTL, Product, Supply Chain, Technology, Transportation, Truckload, Uncategorized