SPECIAL ADVERTISING SECTION

FREIGHT PAYMENT

By Matt Smith

Providing increasingly sophisticated services to clients , US freight auditing and payment ( FAP ) providers are enabling the FAP industry to nearly triple in size in less than a decade , according to a report published by Verified Market Research in February .

With services such as direct software integration , inventory data cleansing and standardization , and in-depth cost analyses , FAP companies ’ offerings are going beyond standard operating procedures in order to bring sought-after insight and value to their clients .

The bullish growth outlook contrasts with a slowdown in US freight volumes since August 2022 , as corporations outsource more non-core functions to FAP specialists to reduce costs and boost efficiency .

Clients of domestic FAP companies span various industries , including manufacturing , automotive , retail , technology , and food and beverage . They audit each freight bill , verifying aspects such as mileage , weight , goods classification and applicable tariffs or rates while also identifying and correcting billing errors .

Approved invoices are then paid on behalf of clients , allowing them to largely eliminate accounts payable processing from their in-house functions .

The freight auditing and payment industry will be worth $ 1.85 billion annually in 2030 , up from $ 696 million in 2022 . According to the Verified

Market Research report , North America provided 45 % of global freight auditing and payment industry revenue in 2022 .

Nonetheless , FAP providers ’ clients are having to do more with less due to an uncertain outlook for the US economy . The US has not slipped into recession as many experts had forecast , but real GDP growth dropped from 3.4 % in the fourth quarter of 2023 to 1.3 % in the first quarter of 2024 .

Wage increases have failed to keep pace with the escalating costs of living faced by many Americans , leading to a sustained decline in retail sales when adjusted for inflation .

Among the most affected sectors are manufacturing and real estate-related industries — Federal Reserve data shows a decline in US existing home sales over eight of the past 11 months through April 2024 , and new home sales have also slumped .

“ That means less furniture , less fixtures , less carpeting , less windows , less doors for new homes , so there ’ s a softening in that marketplace ,” said Allan Miner , president of CT Logistics .

As shippers are forced to reduce their in-house capabilities , the role of freight auditing and payment companies is becoming even more vital .

“ We ’ re providing software services and technology that transcend simply processing and paying invoices ,” said Keith Snavely , senior vice president of global sales at nVision Global . www . joc . com June 17 , 2024 | Journal of Commerce 35