Effects of the global pandemic, economic recession and overall business volatility occurring in most industries are making it more important for shippers to be at the top of their game. And, to be at the top of their game, shippers must be on top of their data. Using audit technology and parcel expertise is integral to validating practices and uncovering opportunities to optimize performance.
In today’s new never normal and always unpredictable world, shippers are feeling the pressure to eliminate any non-essential expenses. Some companies may be considering cutting or reducing efforts to audit parcel invoices. So, do you really need parcel audit? Is it essential? To answer this, you must ask yourself, do you value customer retention and profitability? You do? Then yes, parcel audit is, indeed, very essential.
Customer service and retention
The customer is always No.1, so let’s start by examining how parcel audit improves customer service and retention.
When more than half of customers are going elsewhere after a poor experience, now is definitely not the time to let your guard down on service audits. The delivery experience is directly related to customer retention. According to Dimensional Research, of customers who report a bad experience, almost all of them (97%) changed their future buying decisions. Further, 58% stopped buying from the company altogether. More than half went to a different company for the product or service. And, perhaps most significantly, 52% told others not to buy the product or service. As everyone in business understands, bad word of mouth can have immeasurable negative impact.
Bad shipping experiences come in many forms. With fewer drivers on the road and higher demand for parcel capacity — largely due to the massive uptick in e-commerce shopping — both loss and damage incidences have increased. The best approach is to manage the entire loss and damage process from identification to resolution and recovery. A parcel audit can save a significant amount of money and help you identify shipping cost details down to the SKU level. This is particularly helpful for companies that are introducing new products and/or shipping with new vendors.
Maybe the shipment was not lost or damaged, but late, delivered to the wrong house or mislabeled from the start. You can’t fix the problem unless you have awareness of the specific issue. In the small package world, it’s hard to gain this awareness without validation from parcel audit.
Whatever caused the problem, the bottom line is that this and other issues could be driving away customers at a time when no company can afford to lose a sale.
A customer who loves your product but loathes the shipping experience has high potential to become a lost customer. This lost customer had the potential to be a repeat customer who spreads free word-of-mouth advertising for you. This lost customer is reason enough to conduct frequent service audits.
Hidden fees, billing errors and on-time payments
Parcel audit offers numerous additional benefits that are even easier to measure than customer satisfaction and retention.
As e-commerce continues to radically change the way business-to-consumer (B2C) and business-to-business (B2B) organizations serve their customers, parcel audits too are evolving to meet the times. As COVID-19 re-shapes our world, the effects on e-commerce will span decades. While we were prepped for steady e-commerce growth, most could not have predicted the rapid acceleration brought on by the pandemic. Shippers have been asked to pivot and deliver on these new expectations.
With increased parcel volumes comes increased complexity. The unprecedented volume is severely augmenting challenges associated with invoice, payment and claims management. This evolving marketplace requires that parcel service providers closely monitor service practices to maintain profitability. You must be mindful of carriers’ efforts to shift pricing practices and strategies around surcharges and accessorials to financially support associated service needs.
Let’s consider a real-world example of a shipper who recently noticed a significant change in per-package shipping costs. After a service audit, the company realized that its cost-per-package increased by about $1.50 due to a billing adjustment error made by the carrier for early-morning deliveries.
Without close charge and invoice analysis, there’s no telling when this shipper would have recognized that it was being overcharged by $1.50 per package. Multiply that number across thousands of shipments per year, and the value of audit becomes crystal clear.
Parcel auditing can also save money by adding value you may already be paying for. For example, if your company is paying for guaranteed service, Saturday pickup or delivery, or other services, a parcel audit makes sure you get them. A parcel audit solution also checks for early AM services, as well as identifying and following up on lost or damaged packages.
Data collected during parcel audit also provides insights into how new surcharges or new carrier rules will impact transportation and the related costs. For example, FedEx recently announced a new late-payment fee effective in 2021. Using a compliance audit, companies can keep close tabs on these types of fees and either avoid them completely (by paying on time) or correcting errors (by flagging erroneous late fees). With so many staffing changes and work-from-home scenarios taking place as we battle a global pandemic, shippers need to be especially careful about paying their carrier invoices correctly and on time.
Rigorous parcel audit services will assess to the penny against client contracts and match program costs with services rendered. Auditing every charge code takes a tremendous amount of administrative effort. This is the only way to see how new surcharges and accessorials introduced by the carriers impact your overall transportation costs. Failing to audit invoices means you leave money on the table.
Using collected data, you can model what-if scenarios to enhance programs for current strategies and future goals. These scenarios can address mode optimization, split shipment assessment, routing analysis, distribution center alignment and site selection analysis, mergers and acquisitions analysis, fulfillment models and regional carrier analysis. The result is a parcel program closely aligned with business goals based on fact-based analytics, robust audits and industry expertise.
The bottom line? Parcel audit services help you keep customers happy, streamline business operations and achieve a competitive edge.
Now that you know about parcel audit, go focus on something else!
When it comes to managing your business, your focus should be on running day-to-day operations, not worrying about billing accuracy or loss claims. By retaining the services of an expert third-party logistics provider with industry leading parcel audit capabilities, you can allocate your internal time and resources more efficiently while resting easy that your parcel program is being continually scrutinized for accuracy, savings and improvement opportunities.