Transportation Payment Benchmark Study: Making Dollars and Sense

American Shipper, in partnership with the Council of Supply Chain Management Professionals (CSCMP) and the Retail Industry Leaders Association (RILA), has benchmarked more than 250 payers (shippers and third party logistics providers) and payees (3PLs and carriers) on their domestic and international transportation invoice and payment practices for all modes.

This report is the final in our series that explores the life cycle of freight transportation spending.

This year’s report ventured in new directions from previous reports in an attempt to ascertain the role of the finance department in the freight payment process, and the usefulness of freight payment data. However, the nuts and bolts of freight payment, particularly the auditing process, remain a central part of this research.

Functions, costs and payment time frame
The core functions that make up domestic and international freight payment changed little from 2011 to 2012, as did the cost for shippers to pay invoices. So did the means by which companies pay their bills.

What did change this year is that shippers, particularly larger shippers, are paying their bills later than in years prior. The number of respondents paying their invoices 30 to 45 days after invoice date increased by roughly half, while the number of those who pay in less than 30 days slipped noticeably.

This year’s report asked shippers about the constituent costs that make up their freight invoice costs and found that those who handled the process in-house largely included the cost of labor associated with the accounts payable process, while those who outsource tend to look strictly at the cost they pay their service provider per invoice.

Large shippers remain more eager to buy a new freight payment system or upgrade their current system than smaller shippers—that makes sense since many of the benefits of freight payment are predicated on scale, with the larger vendors aiming their solutions more squarely at shippers with big volumes.