Rate Variance: Receiving the REAL Refunds You Deserve

by LJM Group

With the recent and unprecedented rapid growth of e-commerce, the concept of traditional parcel audit has transformed itself from a simple insurance policy — focused only on minimizing losses and validating a Carrier’s billing errors — into an effective analytical tool that can verify business rule implementations and seek out the internal causes of inefficiencies.

What most people envision when they think of a parcel audit is the following: a package has been given to a Carrier, and an agreed cost is incurred in exchange for a specific deliverable service. However, a discrepancy issue may arise when the charged amount does not match what the audit determines it should be, because the Carrier did not fulfill their terms of the Agreement.

Comprehending Your Contract

A successful audit starts by understanding your previously negotiated Carrier contract and expecting to find that the terms and conditions within have been adhered to by the Carrier. While this is not always the case, it is crucial to eliminate any surprises within your invoices (otherwise known as charges not anticipated) by identifying key terms from your Agreement. To better assess the cost-benefit relationship to your business, ask yourself the following questions:

1. Am I seeing the relevant discounts or incentives due reflected in my pricing?
2. Am I seeing only valid adjustments?

If the answer is NO to either of the above questions, potential savings opportunities may exist.

Rate Variance Auditing

In order to perform a comprehensive valuation, there are several auditing points to account for — Rate Variance Auditing being one of the most critical. At LJM Group, we make certain that your Carrier rates, incentives, and accessorial charges are compliant with your negotiated contract.

The intent of Rate Variance Auditing is to confirm that a shipper is billed per the original established rates in their Agreement and published Carrier tariff. This aspect is statistically the least likely to result in consistent savings, yet it can ensue in the largest claims if an error is made on an invoice.

Additional features of our Rate Variance Auditing structure coincide with Billing Adjustments, Late Shipments, and Compliance.

Entrusting in our Small Parcel Invoice Auditing Services will ensure that the Carriers uphold their end of their contract, and no refunds due to you go unnoticed, resulting in improved cost controls, increased efficiency, and more accurate transportation data. Terms are ever-changing, forcing companies to strategically progress, implement, and continuously enhance a freight audit process that better analyzes parcel spend, identifies significant savings, and delivers a competitive advantage for any business. LJM Group champions the parcel arena.

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