RATE & PAY (R&P) A Freight Payment Panacea?

Rate & Pay is a generic term for customer "self-invoicing": of
freight charges. Traditionally, carriers generated a freight bill
(invoice) for transportation related charges, and the customer
reviewed and paid it. With Rate & Pay the customer tells the
carrier what will be paid and remits payment based on an
electronic bill of lading.
Rate & Pay can work well if the shipments are outbound, pervade
or standardized regular movements, but can present problems
if inbound collect or third party billing. Rate & Pay minimizes the
traditional paper trail and relies heavily on an electronic database,
which we know is only as accurate as the input and as complete as
the program that controls it. With Rate & Pay it is more difficult to
reconstruct and document what was done. Useful? Undoubtedly.
A Panacea? Probably not in most cases.

LOSS & DAMAGE LIABILITY

The ICC Termination Act contains one provision that traffic managers
should ignore only at their peril. The law allows motor carriers to
limit liability, but requires them to notifiy a customer only when
asked. "Shippers today have got to negotiate up front with every
carrier and get it in writting," advises William Augello esq., and
founding director of the transportation and Logistics Council (TLC).
"Use your own bill of lading to avoid being bounced around by
carriers w/unfiled pricing sheets, schedules and tariffs incorporated
by reference." The bill of lading should include language specifying
that the shipper is bound only to what he agrees to in writting.
"Shippers must request a copy of whatever they agree to with the
carriers," advises Augello. "There can be no more saying that a
contract is subject to a classification or rules tariff. Make the
request in writing. If the carrier doesn't provide the
documents,then it won't be able to enforce them."
Carriers say the ICC Termination Act restores the rights of carriers
to limit liability simply by placing a clause to that effect in their tarrifs.
However the new law does say that any limits on liability must be
"reasonable," which should prevent carriers from charging excessively
high premiums for assuming full-value liability. Augello says,
"Companies are simply not doing the due diligence required to
manage their logistics operations properly. There is a greater need
than ever to have people on staff educated in the legal aspects of
transportation and logistics.”

NO MORE FREIGHT BILLS ?

What do freight-bill auditing and payment firms do for their
clients? Basically, these companies simplify the shipper's task
of paying carriers. They take over the processing and paying of
freight bills and collecting the data so that, in essence, the shipper
has nothing to do with freight bills. Typically, a freight bill payment
company performs the following activities: Professional
transportation auditors check the bills submitted by the carrier
before approving payment. This pre-payment audit ensures that
the carrier has applied the correct rate and discount to the invoice,
as well as the proper classification. It also double-checks to make
sure that the invoice has not already been paid. Where an overcharge
is determined, the audit company either collects the bill and pays
short or contacts the carrier for a corrected invoice. Because
current regualtions only give shippers six months to recover
overpayments, pre-auditing of freight bills and elimination of
overpayments is now more advantageous than ever to the shipper.
In addition to handling all data entry related to the invoice transaction,
the service assigns the account numbers that the client wants in its
general accounting ledger.
The actual arrangements vary from company to company, but in a
typical case the freight-bill service notifies the shipper of the amount
needed to pay its carriers. The client then wires the necessary funds to
cover the freight bill payments to the service provided, which in turn
issues checks for payment to carriers.
The provider issues reports on freight activity to allow shipper
executives to get a better handle on shipping needs and demands.
On top of that, many providers now have software that allows clients
to load data into their computers for further analysis. The cost of this
service depends on the specific requirements of each shipper, with
many possible variations. However, charges are ususally levied on
a "perbill" basis, with specialized accounting or reporting requirements
usually adding to the basic price. In general, however, the reductions
in the freight bills made by discovering and eliminating overcharges
before they are paid usually exceeds the cost of the services. As a
result, a professional pre-audit of the freight bills will normally save
the shipper much more than the total monthly cost of the service.

Post Implementation Audit - Post Freight Audit Analysis

We are a customer-oriented, service-driven company, providing a full complement of rail, motor, air, ocean and small package freight-bill auditing services.

Since 1977, Freight Revenue Recovery of Miami, Inc., has specialized in the railroad and motor-freight auditing field. Our exposure to the many changes in the freight industry during this period means that your freight bills will be scrutinized by experts.

All freight charges, whether inbound or outbound, prepaid or COD, could be entitled to overcharge refunds. Regardless of who initiated the shipment, if your company pays for the freight, you are entitled to claim for overcharge refunds.

Our pre-audit, freight-bill payment service eliminates the cost of handling, entering and paying your freight bills, and utilizes the experience of our transportation professionals to eliminate the overcharges before they are paid.

Our post-audit service is on a contingency basis; there is no additional cost to you. Overcharge refunds go directly to your company's bottom line as an addition to pre-tax profits.

NOTE: EDI and computerization have not eliminated billing errors. They have just made the errors harder to find. A professional audit of your freight bills is an excellent way to measure the efficiency of your own freight-bill payment system.

Contact us today!

Freight Revenue Recovery of Miami, Inc.
Telephone: (305) 233-7730
Toll-Free: (800) 831-0122
Email: AuditOne@freightrevenue.com

A Penny Saved Is A Dollar Earned (In Future Savings)

It may seem a bit farfetched to consider that you can
convert a penny of savings into a dollar of earnings.
After all, that means that your savings are multiplied a
Hundredfold. Well, look at it this way. You send your freight
bills out for post audit and among the overcharges that the
auditor http://www.freightrevenue.com recovers is $200.00
because a shipment was rated by weight, even though the
contract allows a mileage rate for shipments of that size and
the mileage rate is $200.00 lower than the LTL rate.
However, since you have a 50% contingency fee arrangement
with the audit company, your net savings are only $100.00.
You normally make this shipment once a week, and because
your contract with your carrier has a year to go, you can
save $200.00 for each of the next 50 shipments during the
life of the contract if you rate them by mileage. This will add
up to $10,000.00 of savings over the life of the contract.
(And you don’t have to share these future savings with
the audit company.) So your initial $100.00 net savings will
ultimately earn your company $10,000.00 in future savings,
which is the hundred-fold multiplier that we mentioned at
the outset of this article. We think that Ben Franklin would
have been pretty pleased with that result. Wouldn’t you?

Have Duplicate Payments Been Eliminated?

One would think that with all the marvels of the electronic

age duplicate payments of freight bills would no longer be a

problem. Unfortunately, the exact opposite is true-the

prevalence of duplicate (and multiple) billing and payment

is greater than it has ever been. Although computers have been

programmed to catch the repetition of pro numbers, bills of lading,

origin, & destination by date, mileages and other factors, many

carriers submit correct follow-up bills with slight variations, such

as adding suffix letters to pro numbers. Sometimes these variations

cause the computer to miss the duplication and pass the item through

as a new entry. Or carriers re-bill on a "Statement" form with a

different number series than their invoices, and the bill is paid twice.

And if several statements are submitted as follow-ups to an individual

bill, that bill could wind up being paid three, four or more times.

(We actually saw a $528 freight bill paid five times within a

two week period.) The bottom line is that there are some judgments

and/or conclusions that are beyond our ability to program into computers.

In order to minimize the possibility of duplicating payments, the

computer's information must ultimately be analyzed and evaluated by

trained professionals. http://www.freightrevenue.com

Have You Received Your UPS Refund?

It's called "The 2 Billion Dollar Secret".

The question is, how much of that 2 billion dollars rightfully belongs to your company? Here's how it works:

Small package carriers such as UPS, FedEx, and RPS have a Money-Back Guarantee in the event of service failure. (Their guarantee is spelled out on their web site, or on the back of their shipping document). According to industry experts, these small package carriers have service failure levels that equate to over 2 billion dollars per year in overcharges.

Has UPS or FedEx ever sent you a refund? Probably not! And why not? Because they place the burden on you to track your shipments, investigate arrival dates, verify delivery and apply "standard service days" for every parcel you ship. Plus, they only allow you 15 to 30 days from the scheduled delivery date to file your claims. It is obvious that in spite of their so-called guarantee, they make it as difficult as possible for you to file and collect your claims.

If this is an area that you have not yet addressed, please get in touch with us. Not only can we assist with your small package rate negotiations, but our special customized small package software program can help you recover the overcharge refunds you deserve.

Truth is Stranger Than Fiction

Our largest small parcel claim involved an 18-pound shipment from Ontario, California to Sparks, Nevada. Our client was billed, and their third party payment service paid, $25,027.91.

Question: How much should this shipment have cost? What can you do to find out if you are losing money to small package carriers?

Answer: The correct charge should have been $27.91! Not only was the client overcharged $25,000.00, but it took us six months of intense calls and correspondence to get the small package carrier to refund our client's money.

The fact of the matter is that in addition to non-deliveries, service failures, and extension errors, small package carriers make numerous other mistakes. For example, one of our recent claims was for a hazardous materials surcharge. Instead of applying a $50,00 hazardous materials charge to each package in the shipment, resulting in an overcharge collectin of hundreds of dollars for our client.

FREE NO OBLIGATION OFFER

It's easy to find out if you are losing money to your small parcel carriers. We will give you a FREE, NO OBLIGATION, audit of your small parcel shipments. Follow our quick and easy set-up instructions, and via an export of your UPS Parcel file, e-mail us a one-week history of your shipments.

We will thoroughly research your bills to investigate arrival dates, verify delivery, and apply standard service days for each shipment. Upon completion of your audit, we will supply you with a complete detailed report of our findings. (This free offer is for a limited time only, so please contact us as soon as possible).

"FREE" Freight Shipping

As most shipper know, within each LTL carrier's rate group there is a weight (referred to as "weight break") where it is cheaper to rate the shipment at the lowest weight provided for in the next- heaviest weight group at the rate assigned to that weight group. In other words, you can add weight to a shipment until you reach the lowest weight in the next-heaviest weight group, and not pay an extra cent for any of that added weight.

Weight breaks vary, not only according to distance, but by weight groups as well. In addition, they can vary from carrier to carrier. In one example of a class 70 shipment from Massachusetts to Los Angeles, the weight break on shipments weighing between 5,000 and 9.999 pounds is 8.296. Once you hit that weight, you can throw in an extra 1,734 pounds with no increase in the freight charges.

By making your sales and purchasing people aware of the deficit-weight aspect of motor carrier LTL pricing, you could open up opportunities for them to sell (or order) in greater quantities than they might otherwise do, with no added freight charge. It's a powerful incentive.