Hidden Profits: Shipping Industry's Struggle with Invoice Accuracy
Abstract
Invoicing inaccuracies have plagued the air freight and ocean industries for many years. Inherent factors, including complex and volatile pricing, and the need for carriers, NVOs, and forwarders to cut costs, continue to perpetuate this problem. Invoices are often overcharged or under-billed. Customers identify overcharged invoices and either short-pay or file an overcharge claim, but under-billed invoices are often neglected and the result is hundreds of millions of dollars in lost profits to suppliers. Recouping these hidden profits is the foundation of ARG’s Cargo Revenue Recovery service—and the benefits are impressive. Some major carriers have experienced a 5% gain in gross profits without incurring any incremental cost.
Invoicing inaccuracies have plagued the air freight and ocean industries for many years. Inherent factors, including complex and volatile pricing, and the need for carriers, NVOs, and forwarders to cut costs, continue to perpetuate this problem. Invoices are often overcharged or under-billed. Customers identify overcharged invoices and either short-pay or file an overcharge claim, but under-billed invoices are often neglected and the result is hundreds of millions of dollars in lost profits to suppliers. Recouping these hidden profits is the foundation of ARG’s Cargo Revenue Recovery service—and the benefits are impressive. Some major carriers have experienced a 5% gain in gross profits without incurring any incremental cost.
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Customers complain when they are overcharged, but do they say anything when they are under-billed? Most are glad to pocket the extra profit, and don’t speak up.