Freight Audit

Freight audit is the systematic process of reviewing, verifying, and validating carrier invoices to ensure that charges are accurate, consistent with contracted rates, and reflective of the actual services delivered. In the transportation industry, billing errors are surprisingly common, with studies indicating that 3 to 7 percent of freight invoices contain errors, making freight audit an essential financial control for any shipper with significant transportation spend.

A comprehensive freight audit examines multiple elements of each invoice including the base rate applied, the weight and dimensions used for rating, the origin and destination charges, all accessorial charges such as detention, fuel surcharges, and liftgate fees, and any discounts or allowances specified in the contract. For refrigerated shipments, the audit also verifies that the correct reefer fuel surcharge was applied and that any temperature-related accessorials are consistent with the actual service provided.

Audit Methods

• Pre-audit: Reviewing invoices before payment to catch errors and resolve disputes before money changes hands.
• Post-audit: Reviewing invoices after payment to identify overpayments and recover overcharges through carrier credits or refund requests.
• Automated audit: Using software to compare invoices against contracted rates, flagging discrepancies for human review.

The cost savings from freight audit programs consistently exceed the cost of the audit itself. For shippers spending $1 million or more annually on refrigerated transportation, a freight audit program typically recovers 2 to 5 percent of total spend in billing corrections. Beyond direct cost recovery, the audit process improves carrier accountability, ensures contract compliance, and generates data that supports better rate negotiations.