Credit Crisis Leads to Better Control on Freight Costs
November 27th, 2008
The global financial crisis will lead to radical changes in the structure of financial controls in the supply chain, with 100% control from transport order to payment on carriers’ invoices. This is the prediction following a survey of multinational shippers by freight invoice control company ControlPay. This comprised seeking the views of logistics companies on the impact of the latest phase of the credit crisis on the industry and its effect on corporate behaviour.
Better Cost Focus. Respondents believe the crisis will lead to a stronger and better focus on the cost structure of supply chains. As a result, there will be stronger control of the transportation costs. Respondents believe this will lead to cost savings on total freight spending from 2-8%, since control is often randomly performed, or even not at all. Karel Kinds, CEO of ControlPay, says the credit crisis has triggered a new phase in invoice audit for multinationals.
Financial Opportunity. What started as an opportunity for better control on freight costs, has been transformed, into a much more serious financial opportunity to create a permanent better visibility and control on total freight costs. “We already see that intensive efforts are being made toreform the freight invoice control; many are questioning the chances of their business models, focus on the business and sourcing out the invoice audit to the professionals.”
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