🇺🇸United States

Systemic overbilling and duplicate freight payments not billed back as recoveries

4 verified sources

Definition

Shippers routinely overpay freight invoices due to rating errors, incorrect fuel surcharges, misapplied accessorials, and duplicate invoices, but only a fraction of these overcharges are ever recovered. Industry audit providers report typical initial recovery opportunities of 3–8% of total freight spend when a serious audit is first implemented, indicating this leakage was occurring and going unbilled back to carriers for years.

Key Findings

  • Financial Impact: 3–8% of total annual freight spend (e.g., $3M–$8M per year on a $100M freight budget)
  • Frequency: Daily
  • Root Cause: Lack of systematic pre‑ and post‑audit controls, underinvestment in audit tools, and treating recovery as an afterthought cause overcharges and duplicate payments to flow through AP without being disputed or credited. Manual and sampling-based checks miss small but pervasive errors such as misapplied discount lanes, incorrect fuel caps, and duplicate invoice numbers across high volumes of shipments.

Why This Matters

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

Affected Stakeholders

Transportation Manager, Logistics Director, Freight Audit Manager, Accounts Payable Manager, CFO, Controller

Deep Analysis (Premium)

Financial Impact

$100,000–$300,000 annually (3–8% of $12.5M–$37.5M government freight spend) • $100,000–$300,000 annually (3–8% of $12.5M–$37.5M government spend; recovery hampered by bureaucracy) • $10K–$50K annually (3–8% of $1M–$5M typical small business freight spend); high percentage impact relative to margin

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Current Workarounds

Billing specialist runs Excel VLOOKUP to check rates against contract; manual weight verification for heavy shipments; email correspondence with carrier for disputed charges; claims filed on PDF forms after delays • Centralized freight payment processing with manual spot-checks; post-payment disputes filed via email; rate verification against master contracts (PDF/spreadsheet); claims tracked in shared drives • Contract rate verification in Excel + email escalations for obvious errors + claims filed through formal procurement process (slow) + paper trail for audit trail

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Methodology & Sources

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

Evidence Sources:

Related Business Risks

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

Service failures (damages, delays) not translated into credits or compensation

Often 0.5–2% of freight spend annually depending on damage and delay rates

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