🇺🇸United States

Distorted freight spend visibility leading to poor carrier and pricing decisions

3 verified sources

Definition

Because many overcharges and unrecovered amounts remain embedded in paid freight costs, reported spend data overstates true contractual rates and masks carrier billing behavior. Freight audit experts observe that companies often discover they were overpaying more than estimated once they implement robust audits, indicating that prior decisions were made on inaccurate cost baselines.

Key Findings

  • Financial Impact: Mispricing and suboptimal carrier selection can add several percentage points to ongoing freight spend (e.g., $2M–$5M per year on $100M spend)
  • Frequency: Quarterly
  • Root Cause: Incomplete or low-quality freight audit and recovery processes mean finance and procurement rely on inflated historical cost data when negotiating contracts, setting customer freight terms, or choosing carriers. Without clear separation of contractual vs. error-driven costs and minimal insight into systemic carrier misbilling patterns, organizations under-negotiate and maintain carriers that quietly overcharge.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Freight and Package Transportation.

Affected Stakeholders

CFO, Transportation/Logistics Director, Procurement (Transportation) Manager, Pricing Manager, Sales Leadership

Deep Analysis (Premium)

Financial Impact

$1.5M-$4M annually (5-8% recovery opportunity missed on $20M-$80M spend) • $100K-$500K annually (fuel surcharge errors on $10M-$50M wholesale freight) • $100K-$600K annually (compliance overhead + unrecovered overcharges on $5M-$30M government freight)

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Current Workarounds

Batch invoice review done manually by billing staff; claims filed selectively based on obvious errors only • Batch processing of invoices in Excel; formula-based rate matching; exception lists reviewed manually; claims filed on obvious errors only • Excel spreadsheets with manual carrier rate comparison; spot checks of invoices; reliance on reported rates from procurement

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Systemic overbilling and duplicate freight payments not billed back as recoveries

3–8% of total annual freight spend (e.g., $3M–$8M per year on a $100M freight budget)

Identified overcharges never recovered from carriers (payment recovery crisis)

Often 50%+ of identified overcharges, representing millions in unrecovered claims for large shippers over a year

Guaranteed service and late-delivery refunds not claimed

Typically 1–3% of parcel/freight spend on guaranteed services per year for high-service networks

International freight overcharges from currency and tax miscalculations

Often 1–2% of international freight and duty spend annually

Chronic shipping overspend from uncaught rating, accessorial, and fuel errors

5–8% of total freight spend per year in many networks

Escalating audit labor costs due to manual dispute and recovery handling

Hundreds of thousands in additional audit FTE or BPO fees annually for large shippers

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