Commentary: Focus on process, not audits

   In the 2013 edition of American Shipper’s annual Transportation Payment Benchmark Study, released in March, we asked respondents if they were seeing consistent improvement in audits from their freight payment system.
   About half of shipper respondents said yes, but less than 20 percent said their rate of catching errors was improving significantly year-on-year. It spoke to one of the inherent issues with moving to an automated system — after the immediate gains, is it possible to keep the momentum going?
   Growth is difficult to keep going in all walks of business. China wasn’t going to grow its GDP by 15 percent a year forever. Container trade wasn’t going to grow by double-digits forever. And so it is that the initial euphoria of progress that comes with successful systems integration doesn’t last forever.
   But in August, I got some useful context for what our research told us. Savings from better freight auditing practices are easy to focus on, but they aren’t the deciding factor for whether a system is providing a consistent return on investment.
   “Process savings are the true ROI in freight payment,” Craig Cameron, vice president of sales and marketing at payment vendor A3 Freight Payment, said during a webinar in August. “Audit savings may dwindle over time, but process savings are the ongoing savings. If you take freight payment back in-house, you incur the full costs of those processes.”
   So there you go. Be mindful that it’s a great goal to catch more errors (or better yet, eradicate the errors in the presentment phase altogether), but don’t fixate on that as the only ROI metric in freight payment and audit. Outsourcing the process is a far more reliable measure of year-on-year savings. (Eric Johnson)