Freight Contract Management Controls
What good is a contract that isn’t enforced? Cass provides solid contract management controls – whether your shipment is a small package or an ocean container. Organizations that spend considerable time and effort during the procurement phase to negotiate favorable rates and terms must put effective controls in place to ensure that – when the actual invoices arrive – the amount that is paid accurately reflects your negotiated rates. The Cass freight audit and payment system incorporates these critical controls to systematically enforce your contracts. Cass contract management controls will ensure:
- you pay the right amount, based on your contract and tariff rates
- payments are timed to meet agreed-upon terms, which can vary by carrier
- you have visibility to invoices received where no contract rate is on file
- you have visibility to the use of non-contracted carriers
Manage the Complexity of Freight Contracts and Invoices
Because freight contracts reflect complex rate structures, freight payment applications must be developed with precise business rules so that the right rate is applied. For example, different freight rates apply based upon:
- Different transportation modes
- Interline moves – when multiple carriers are involved
- Different equipment types
- Specified mileage calculator - ALK’s PC*Miler, Rand McNally MileMaker or PTV
- Single or team driver
- Service levels
- Hours – including holidays and days of the week
- Other customer-specific contract terms
Once the correct base rate(s) have been applied, the system also must account for additional accessorial charges. Freight carriers list dozens of accessorial charges that may be applied, such as fuel surcharges, unloading, special packing/sorting, split delivery, tank cleaning, hazardous materials and other charges. These accessorial charges are spelled out in carrier tariffs or service guides and are incorporated into the contract by reference. Some charges are situational, such as unplanned detention fees that are charged if the shipment arrives and must be detained before it can be unloaded. Accessorial charges add significant costs making it important these costs be monitored and controlled.
Systematic Freight Audits Provide Tight Controls
During the system implementation phase, the Cass account team extracts rate information from your organization’s contracts and tariffs, and loads it into the Cass Ratemaker® software engine to produce accurate, customer-specific rate tables. The Ratemaker engine is second to none and has the flexibility to accurately generate rates, based on even the most complex rate structure.
Cass leverages extensive expertise in its understanding of all transportation modes and billing terms, including Incoterms that will affect rating.
With its freight rating engine and automated audit functionality, the Cass freight audit and payment application, provides tight contract compliance controls. That’s because the Cass application’s business rules apply the actual contract rates, and invoices are processed systematically, using the software. This helps “close the loop,” ensuring the contracted rates are correct and systematically applied during invoice audit and payment.
Payment Will be Timed According to Your Contract Terms
Cass has the ability to age freight invoices and provides this service as a standard to all customers. We allow you to pay your carriers based on your precise terms. The Cass system provides for payment cycles from two to any number of days, down to specified differences by individual carriers. This process allows our customers to maximize use of their funds by pushing payment to the maximum number of days allowed based on your contracted terms.
Specialized Systems Address Parcel
Cass clients include some of the world’s largest parcel shippers. To address the specialized needs of parcel invoices, over the years we have continued to refine our parcel system controls to ensure that parcel invoices are audited and paid as your contract specifies, and that you actually get the discounts that you qualify for. Learn more about Cass parcel management.