Accounts Deceivable: Inaccurate billing is costing carriers millions

Is there a way out?

So, what are the options for carriers and forwarders to get out from under billing-error death spiral? Palladino, for one, suggested less reliance on one-stop-shop technological solutions. “What we’re seeing is a major issue with data capture on the front end. That could be with internal staff, or it could be through the booking process. Sometimes the customer puts in incorrect information. Inevitably, what happens is, they don’t have the insight to see that this bad data then flows through the entire process.”

For carriers that ship mostly domestic freight, one solution is to bypass the automated systems altogether and go back to direct-billing forwarders. One U.S-based carrier that flies only domestic freight, said it had “cargo finance teams” that immediately identify discrepancies and contact the sales managers. “That way, most disputes are easily resolved,” he said. The solutions for those that haul much more international airfreight are not as easy, as there are more variable spot rates that can be entered improperly, and at the last minute, the domestic carrier added.

To make a real change in billing problems, carriers and forwarders must “change a lot of the process flows,” Palladino said. “We must put processes in place that would require a manual effort to really hone in on the data-integrity issues on the front end – verify the shippers are putting in the correct information during booking. That requires a bit of legwork.”

This year, Palladino said ARG has launched a new initiative called “pre-auds,” in which ARG audits all transactions before they even go out the door. “That’s one way of making the whole process transparent to the customer,” Palladino said. “That could really bring down that CASS adjustment rate.”

More than anything else, the North American carrier executive stressed that there are rarely any one-off problems that can be solved permanently. “We run into multiple billing issues every month,” he said. “You have to have that dedicated focus, day in and day out, to make a difference.”

The executive from within the CNS structure was also optimistic that digitization and new initiatives to promote inter-supply-chain communication will gradually reduce the incidence of billing errors. In the United States, for example, the Department of Homeland Security is expected to expand its Air Cargo Advance Screening (ACAS) Pilot Program. ACAS requires shipment information to be submitted to U.S. Customs and Boarder Protection (CBP) prior to an aircraft’s departure for the United States. Once billing inaccuracies begin to threaten the ability of shipments to enter the U.S., carriers will definitely be incentivized to improve their data.

Achieving perfect billing accuracy is a long, painstaking process to which few carriers must devote resources, the North American executive said. “When it’s an industrywide problem,” he added, “it’s hard to stand here and fix it alone, as a single airline.”