At the end of every billing period, carriers send shippers lengthy, detailed invoices, summarizing every package sent and delivered. In an earlier era, supply chain managers may have compared these invoices to their own logs to make sure they’d be accurately billed.
In today’s frenzied e-commerce market with package volumes rising every year, that’s almost impossible. And carriers don’t make it easier.
Contemporary shipping invoices are often more than 100 pages long and organized by codes. That’s intentional. It’s not in carriers’ interest to have shippers double-checking their bills. But it’s essential that retailers and manufacturers review their invoices for billing errors. Those who don’t may be leaving money on the table.
If your carriers’ invoices still look like hieroglyphics, start by looking for these five common billing errors. They’re common mistakes, but ones that shippers ought to ensure they catch and correct.
Related: Cut Your Shipping Spend by Thousands With Your Parcel Audit Checklist
1. Residential or Commercial Charge Errors
One common carrier mistake is marking packages intended for doorsteps as commercial deliveries, and marking packages meant for offices as residential deliveries.
It’s easy to see how this might happen. Most delivery trucks carry both residential and commercial packages, especially in small towns with lots of houses-turned-offices or cities full of mixed-use buildings. But this is an error that can add $3 or $4 per package to each shipment.
The good news: shippers with robust data about their shipments can easily tell which of their customers are residential and which are commercial. Spotting these errors should be pretty straightforward.
2. Invalid Address Correction Charges
Most carriers, including both FedEx and UPS tack on surcharges for invalid addresses that have to be corrected. Though these are relatively rare, they can be large. FedEx charges $15 for every corrected address.
It’s important that shippers note what an invalid address means. The surcharge can only be applied if the mistaken address affects drivers’ ability to deliver the packages — otherwise, it can’t be charged.
Shippers aren’t in delivery trucks with FedEx drivers. It’s not possible to know if each “invalid” address was undeliverable. But if you believe that your carrier is in the wrong, consider challenging these fees as they can add up fast.
3. Improper Dimensional Weight Adjustment
Carriers are still relatively new to pricing packages by dimensional weight. That makes this calculation a potential source of errors.
There are two types of error possible here: first, the carrier calculates dimensional weight incorrectly and second, the carrier uses dimensional weight when they should’ve used actual weight.
If you ship standardized parcels, every time rates change, re-do your dimensional weight calculations so you know exactly how much each package should cost. That information will allow you to easily spot these errors on invoices.
4. Manifested But Not Shipped
UPS bases its charges on labels created, not on packages delivered. That means shippers may occasionally be charged for packages whose labels have been printed, but that have not been delivered.
If your company uses UPS’s services, check your bills to ensure that those manifested packages were delivered.
If you use another carrier, check their policy. At what point in the shipping process do they log packages for billing? If it’s anytime earlier than delivery, you may also want to verify that every package you were billed for reached its destination.
5. Late Deliveries
Most carriers offer full or partial refunds on packages that are delivered even a minute outside the delivery window they promise. Every day, between 3 and 5 percent of packages arrive late. Refunds for late deliveries can save shippers thousands of dollars if they can spot and claim them.
Claiming these refunds can be cumbersome. Shippers usually have to submit specific documentation on a tight timeline and shepherd their claims through complex multi-step processes.
Further, these “money-back guarantees” may come with blackout dates and exceptions. Review your service contract to see if there are any periods when you’ve waived your right to request refunds.
What to Do When Your Carrier Makes a Billing Mistake
Carriers generally offer refunds for late and missed deliveries, incorrectly applied surcharges, and other billing errors. But that doesn’t mean they always end up giving them. The responsibility for spotting invoice errors and claiming refunds lies squarely with shippers.
Shippers can start by reviewing their contracts to find out which mistakes their carriers will pay for. Then, they need to study up on the claim-filing process.
At Reveel, we recommend talking to your carrier’s customer service team sooner rather than later. Find out what the claims process involves, what the carrier’s deadlines are and if there are any forms you should keep on hand. That way when the time comes to file a claim, you can do so with far less stress.
In fact, Reveel takes a lot of this work off of our clients’ shoulders.
Invoice auditing is arduous, time-consuming work, that most companies simply don’t have time to do. Reveel’s consultants can help your company implement our Reporting and Analytics tools. We provide a 45-point inspection of all shipments, ensure they match invoices and catch these errors seamlessly.
Then, Reveel can check whether these errors have valid claims, file them on behalf of our clients and follow up to make sure the carrier sends refund payments.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.
