How Freight Payment Errors Can Cost Your Business Thousands

In today’s fast-moving economy, freight charges can account for a significant portion of a company’s operational costs. However, studies estimate that up to 25% of shipping invoices contain errors, leading to unnecessary expenses that can add up to hundreds or even thousands of dollars over time.

Identifying and addressing these errors is crucial for businesses looking to optimize shipping costs and improve financial efficiency.

What Are Freight Invoices and Payments?

A freight invoice is a bill for transportation services that compensates carriers for moving goods. These invoices are essential for keeping supply chains running smoothly, and while freight billing has become more efficient with digital advancements, errors still occur.

How Freight Payment Processing Works

According to VTM freight experts, freight invoice providers act as intermediaries between businesses and carriers, handling the processing, verification, and payment of freight bills. Here’s how it typically works:

• The invoice provider pays and processes freight bills directly.
• The client reimburses the provider for approved invoices.
• Outsourcing freight payment can save companies money by reducing the need for in-house accounting teams and allowing staff to focus on business growth.

Common Freight Payment Errors

Errors in freight billing are more common than many businesses realize. Global Trade Magazine reports that approximately 6% of freight payments contain mistakes. These errors can lead to overpayments, incorrect charges, and unnecessary fees.

Some of the most frequent freight invoice mistakes include:

• Incorrect delivery details – Address errors can result in costly redirection fees.
• Duplicate charges – Some invoices may charge for the same shipment more than once.
• Unexpected additional fees – Hidden or miscalculated charges from carriers.
• Incorrect discount rates – Failure to apply negotiated rates or discounts.
• Wrong shipment classification – Misclassification can result in higher freight charges.

Factors That Influence Freight Costs

Several factors affect shipping rates, including:

• Delivery speed – Expedited shipments cost more.
• Distance traveled – Longer distances increase freight costs.
• Shipment weight and size – Heavier or bulkier shipments may incur higher fees.
• Special handling requirements – Transporting hazardous materials or temperature-sensitive goods often results in added costs.

The Impact of Weight on Freight Charges

Weight plays a crucial role in freight pricing. Carriers allocate space and fuel based on shipment weight, meaning any discrepancies can lead to unexpected charges.

• Underreported weights – If the carrier reweighs your shipment and finds it heavier than reported, you may be hit with additional charges.
• Overreported weights – Reporting a higher weight than necessary can lead to unnecessary costs.

To avoid these issues, businesses should verify shipment weights accurately before booking freight services.

How to Minimize Freight Payment Errors

The best way to prevent costly mistakes is to move away from manual invoice audits and adopt freight audit technology.

Benefits of Freight Audit Technology:

• Automates invoice reviews – Quickly scans and detects errors.
• Improves accuracy – Reduces human oversight issues.
• Provides data insights – Helps businesses analyze freight costs and optimize spending.

By leveraging digital solutions, companies can gain a complete and accurate picture of their shipping expenses, leading to smarter decision-making and cost savings.

Final Thoughts

Freight payment errors can silently drain thousands of dollars from your business. Understanding common mistakes, verifying shipment details, and using automated auditing solutions can help your company reduce unnecessary costs and improve operational efficiency.

By staying proactive in monitoring freight invoices, businesses can ensure they only pay for what they actually owe—and nothing more.