How IMCs Can Streamline the Freight Billing Process
If you’re an Intermodal Marketing Company (IMC), you can’t get paid unless you provide shippers with bills of lading and other back-up documentation from drayage carriers that validate the accuracy of charges. But getting that documentation is often a time-consuming, manual process that lengthens your cash flow cycle and undermines profitability.
What’s needed to optimize the freight billing process is real-time access to shipping documents immediately after container pick-up and delivery. Such solutions exist, and should be adopted to quickly and efficiently complete the billing process.
What we see more often is drivers executing loads and holding on to paperwork for days until they scan and email it in or physically bring it to dispatch. It’s an antiquated way of working that can easily be replaced by more efficient, tech forward processes, but this manual approach remains well-entrenched within the intermodal freight industry.
The punishing price of manual freight billing processes
Let’s say your payment terms with carriers are 30 days and you’ve got the same arrangement with your shipping customers. An outmoded freight billing process could really mess with your balance sheet and limit the available cash to run your business. Example:
Driver gets paid weekly and finds it more efficient to hold onto paperwork for 6 days and submit it all at once prior to pay day.
Dispatch takes a couple of days to examine and validate the paperwork.
The billing team takes a few more days to process the invoice.
The US Postal Service takes another few days to deliver mailed invoices.
When all is said and done, the shipper might receive the bill a full 10-14 days after the load is completed. When you tack on the 30-day payment terms, it could result in a sharp imbalance between cash in and cash out.
Another downside in having to hunt down shipping documents is the often-overlooked cost of handling these documents and processing the bills. One large broker we know has carriers mail in paperwork daily and employs 18 clerks to process the paperwork for 1,700 daily loads. Sure, the billing moves along quickly, even in a manual mode, but at what cost?
Optimizing the freight billing process with immediate electronic documents
The answer to a faster, more streamlined intermodal freight billing process is to create electronic versions of shipping documents and make them immediately available. IMCs that use the DrayNow Marketplace to source intermodal freight capacity access BOLs and other documents in real time on a central portal.
The documents are there because DrayNow’s process guarantees it.
Carriers who drive for DrayNow electronically upload paperwork at each milestone, which is then validated in the platform. Drivers need rail billing data to enter a railyard with a loaded container, and this data is supplied to them through their phone-based app. But unless the proper documents are scanned, that information is withheld. A driver cannot advance within the DrayNow app and complete his run until he uploads the relevant documents.
The same process applies to accessorial charges as with BOLs. Drivers must provide a proof-of-service document. For instance, if lumper services are required, they must photograph and upload the receipt to confirm the validity of the charge.
In the end, no one on the IMC’s team would have to chase paperwork to get billing out the door. It’s all available on the DrayNow portal immediately as pick-ups and deliveries occur. To automate the intermodal freight process further, it’s even possible, with some system integration work, for electronic documents from DrayNow’s system to automatically transfer into an IMC’s internal system.
Same-day invoicing is possible
Once a load is executed, IMC billing can go out as soon as the same day. In current industry practices, it’s not unusual for the freight billing process to stretch out 7-10 days as IMC’s chase carriers for paperwork. This increases your cash cycle and limits your cash on hand.
You can fix this problem, but it takes partners like DrayNow who combine reliable intermodal drayage service with instant access to shipping documents.
Frankly, that’s not a requirement for carriers today. But it will be, and soon.
It’s best to get ahead of the curve and allow your business to operate at peak efficiency, right now.