Why Your Logistic Audit & Recovery Fails You Every Day

Logistic Audit & Payment Process Provider

The vast majority of these companies fall into two buckets like most business services; they both have strengths and weaknesses.

Legacy Players: Their strength is that they have a good amount of knowledge in the industry. Their weakness is technological advancement and their audit, systems, and business model. They typically resell a TMS along with additional value adds. They offer audit and recovery as a service, but it is not seen as a core business function. You get the most basic recovery, just enough to show that they are doing something.

New High Tech: Their strengths lie in slicing and dicing data and providing it quickly and accurately. Their weakness lies in the fact that they usually have little industry knowledge and, as such, cannot audit and recover past the most basic automated processes. For this reason, their value is in the data and as such provides the best-automated recovery possible with limited knowledge.

Focuses on Something Else

Almost every Freight Audit & Pay (FAP) focuses on something besides the audit and recovery yield.

The solutions these companies bring to the table can bring value to the shipper but ultimately is a sale to bring revenue to the company.

Many of these players are selling an upgraded data platform, unification of shipping data with other company data to drive deeper collaboration.

They, of course, are always pitching the contract optimization services in which they help negotiate agreements on behalf of the shipper. Lastly, they likely are pushing their TMS capabilities to their customers.

These solutions have value and can be part of a comprehensive solution. Ultimately, none of them are focused on the carrier charging you correctly, and almost all do not tackle damage recovery or do so in a way that is just as cumbersome as the carriers’. I would not expect their audit and recovery to improve anytime soon with this lack of focus.

Pricing Models

"Follow the Money" was uttered by a deep-voiced government informant in All the President's Men. That line applies to most logistic audit and recovery firms. The vast majority of these firms make claims about recovery during the sales process. When it comes to the pricing models they put forward, it is seldom based on recovery unless you are a lucky, large customer with Guaranteed Service Refunds.

As shown in the image above, most audit and recovery firms have a model based on the number of shipments, transactions, total spending, or a flat rate. They bring other values like data platforms, data unification, TMS, or other services. I submit that the real reason is that they cannot make a living off of what their audit recovers for you.

As such, their revenue is typically unaffected by their recovery efforts. It's not hard to understand why we can still provide significant value. Lastly, how much time do you spend on items that don't affect your compensation or performance?

Rooted Logistics

At Rooted Logistic Services, the approach is as unique as our experience as a shipper, carrier insider, auditor, technology expert, consultant, and carrier contract negotiator.

We don't want to replace your current firm. Frankly, we don't care what they do or how good they tell you they are. Our blend of experience allows us to find, question, uncover and recover more than most audit companies get as the primary auditor.

We proudly offer our services on a gain-share model, where we are paid when we recover for our customers. This model drives a culture of digging deep, questioning everything, investing in recovery technology, gathering needed information, and providing tools that yield results.

As a shipper, you finally have a partner as focused on your bottom line as you are! Put our experience to work, harvesting more recovery and cutting wasted dollars out of your supply chain. Our promise is that we will yield the results you deserve!