Parcel Audit

Parcel audit is the systematic review of shipping invoices from carriers like UPS, FedEx, and USPS to identify billing errors, recover refunds, and ensure you’re paying only what you owe. Studies show 2-5% of shipping invoices contain errors that can be recovered.

Why Parcel Audit Matters

Common Billing Errors

Potential Savings

Monthly shipping spend: $50,000
Error rate: 3%
Monthly recovery: $1,500
Annual recovery: $18,000

What Parcel Audit Reviews

Service Refunds

• Late delivery (guaranteed services)
• Lost packages
• Damaged packages
• Billing errors

Rate Verification

• Correct rate applied
• Negotiated discounts honored
• Proper service charged
• Zone accuracy

Surcharge Audit

• Residential surcharge validity
• Delivery area surcharge accuracy
• Fuel surcharge calculation
• Additional handling appropriateness

Dimensional Weight

• Correct DIM factor
• Accurate measurements
• Weight vs. DIM comparison
• Contract DIM factor applied

Parcel Audit Process

Step-by-Step

1. Collect invoices - All carrier bills
2. Import data - Into audit system
3. Analyze - Compare to contracts/guarantees
4. Identify errors - Flag discrepancies
5. File claims - Submit refund requests
6. Track recovery - Monitor outcomes
7. Report - Provide findings

Timeline

Invoice received: Day 0
Audit completed: Day 1-3
Claims filed: Day 3-7
Refund received: Day 14-45

Service Failure Refunds

What Qualifies

• Guaranteed delivery not met
• No weather or act of God
• Shipment properly tendered
• Claim filed within deadline

Filing Deadlines

Automation Importance

1,000 packages/week
3% late delivery rate = 30 packages
Without automation: Maybe catch 5
With automation: Catch all 30
Recovery difference: 25 × $25 avg = $625/week

Parcel Audit Methods

In-House Audit

Pros:

• Full control
• No third-party fees
• Direct carrier relationship

Cons:

• Time-consuming
• Need expertise
• May miss errors
• Resource intensive

Third-Party Audit Service

Pros:

• Expertise and technology
• Automated processing
• Higher recovery rates
• No upfront cost (usually)

Cons:

• Share of recovery (25-50%)
• Less direct control
• Data sharing required

Hybrid Approach

• Use software tools
• Automate obvious claims
• Expert review complex cases
• Balance cost and recovery

Parcel Audit Software

Popular Solutions

Key Features

• Automated claim filing
• Contract rate verification
• DIM weight audit
• Surcharge analysis
• Reporting dashboards
• Carrier integrations

Recovery Categories

High Recovery Items

1. Late delivery refunds
2. Lost package claims
3. DIM weight overcharges
4. Service type errors
5. Zone calculation errors

Lower Recovery (But Important)

1. Residential surcharge errors
2. Address correction overcharges
3. Fuel surcharge miscalculation
4. Invalid accessorials
5. Duplicate billing

Parcel Audit Best Practices

For Maximum Recovery

1. Audit every invoice
2. File claims immediately
3. Don’t miss deadlines
4. Track all shipments
5. Know your contract terms
6. Monitor carrier performance

Data Needed

• All carrier invoices
• Tracking information
• Contract/rate agreements
• Delivery confirmations
• Shipment details

Measuring Audit Success

Key Metrics

Benchmark Goals

• Recovery rate: 2-5% of spend
• Claim success: 90%+
• Processing: Under 7 days
• ROI: 5-10x audit cost