Freight auditing is the task of checking and verifying freight bills and cross-checking them with their corresponding shipments.
Outsourcing freight auditing service means delegating the tasks to a specialized third party. If your company outsources freight auditing services, sometimes you may recognize the need to bring competencies back in-house.
When Should Your Company Bring Freight Auditing Back In-house After Outsourcing?
If you need cost-saving from your freight audit company, then you need proof of efficiency. You will find the common reasons outlined below when a company should bring freight auditing back in-house after outsourcing.
Your company may enter into an outsourcing partnership in the belief that the third party can cost-effectively perform the tasks. If the outsourcing costs increase over time, your company may bring the outsourced activities back in-house. It requires the full collaboration of client and provider, sharing information like trusted partners to make the outsourcing costs effective. Sometimes, even after transparency and information sharing, outsourcing cost savings becomes difficult.
When you enter into an outsourcing partnership, there will be a comprehensive service level agreement that will contain a termination clause providing for the client to exit the contract if the service provider fails to meet the service levels. This is another reason why your company may want to bring freight auditing back in-house after outsourcing.
If the outsourced service is meeting service level expectations, one or more customers of your company become dissatisfied with the outsourced service. The reasons customers disapprove of outsourcing are_ customers expect higher service levels, customer’s supplier policy does not support supplier outsourcing, customer’s perception that third-party is not supporting services. These reasons may cause outsourcing agreements to conflict with customer needs, and your company may feel the necessity to bring outsourcing back in-house.
Another issue that may force your company to bring outsourcing back in-house is the impact of changing pressures in the overseas market. When the marketplace pressures weaken the outsourcing partnership, your company may bring back the in-house control of the previously outsourced activity.
In an outsourcing partnership, both parties should prove themselves trustworthy and communicate effectively. When there is a breakdown of the outsourcing relationship because of poor management by one or both parties, your company may decide to bring the expertise in-house.
If outsourced service fails to align and integrate IT solutions, companies may decide to bring back in-house service.
Sometimes, it so happens that a third-party freight auditing team suffers theft, damage, and spoilage of client’s products. In that situation, your company may realize that they need to return to in-house expertise.
There are many examples of outsourcing partnerships that will add value to the client company’s business. If you need to bring back the outsourced operation in-house, you may consider the experience that will help your company grow. When customer retention, competitiveness, profit, and corporate image are at stake, it would not be a good decision to continue outsourcing.
At ShipERP, we offer a freight audit automation solution to improve efficiency and support data-driven decisions for your company. AuditERP is designed to alleviate your freight bill inconsistencies, especially for SAP environments. It integrates seamlessly with your SAP ERP and ShipERP shipping software, communicating directly with carriers, whether or not they operate on the SAP platform.