July 29 2013 05:43 PM

Carrier Invoice Data provides more than simply the opportunity to pay carriers or measure cost. Those UPS and FedEx invoices provide Business Intelligence that will drive savings and process improvement opportunities.

However, that data won’t just appear in the form of actionable Business Intelligence unless a company works to identify the opportunities.

Where are the largest opportunities for savings and improved efficiency? Accessorial charges and surcharges are not simply a fact of life for parcel shipping. Those charges can be controlled, managed and reduced in many cases. First, measure your costs by category. Break down the invoice data by charge code description. Then once you have categorized the data, look for areas of savings opportunity.

For example, Address Correction Charges represent an opportunity to manage and improved processes related to validating customer address information. In addition, partners and vendors can and should be held accountable for those charges incurred as a result of information provided by that partner. 

Another large opportunity is found by analyzing “repeat” Address Corrections Charges. If an address is deemed invalid and corrected by the carrier, the corrected address is provided to the shipper. Use those addresses to update customer information and avoid costly “repeat” address corrections.

“Chargebacks” represent another commonly found opportunity. What processes does your company have in place to ensure that carrier charges for third party or collect shipments are billed to the correct account? When an error occurs, a “Chargeback” will be applied to the carrier invoice. These invoices should be analyzed weekly to identify “Chargebacks” and work with the carrier to have them billed to the correct account. 

Another Business Intelligence Opportunity is service level optimization where clients ship packages based on time in transit routing guides to avoid paying for a 2 or 3 day express delivery when ground shipping is guaranteed to arrive in the same amount of time. 

Many companies will also look for consolidation opportunities by sorting shipments by delivery address to look for patterns of delivery over days or weeks.

Categories and opportunities for savings analysis are endless. I have listed a half dozen opportunities and admittedly, I have just scratched the surface. Analyzing service distribution and delivery density might be the most important data points for your company while driving process improvement to capture manifest errors might be a priority for another. Where to start and where to go from there are questions whose answers are driven by each unique opportunity. The key is to use the data to identify the opportunities and build plans from there based on priorities.

Without a doubt, actionable business intelligence can be accessed from carrier invoices. However, I will caution that carrier provided reporting is by its very nature designed to facilitate remittance of payment, not analysis. A motivated individual with Excel skills can manipulate this data via carrier csv format invoices. The question then becomes one of opportunity cost and analytic skill sets that will allow a user to extrapolate meaningful analysis and reach conclusions from which actionable data can be extracted.

One option is to work with third parties to drive that analysis. The partnership between the shipper, the carrier and the analyst (third party or internal) can then be built upon meaningful, data driven process improvement initiatives. Those initiatives and the Actionable Business Intelligence that drive them can be the strategic advantage needed to succeed in a global competitive economy.

Jeff Lindmark helped start VeriShip in 2005, after a sister company experienced challenges in chasing refunds for late deliveries and billing errors. VeriShip’s proprietary software solution also provides strategic analysis and business intelligence to drive process improvement and cost saving across a client’s entire shipping process. Jeff can be reached at Jeff.Lindmark@VeriShip.com or 800.903.3073.