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Insights from the Index

Q2 2018 U.S. Bank Freight Payment Index

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The U.S. Bank National Shipment Index grew for the sixth straight quarter, highlighting a solid trucking industry and national economy. A slightly lower increase than recent quarters, however, can be attributed to the driver shortage and electronic logging devices.

As the economy remains strong, industry capacity is constrained and spending increases. U.S. Bank expects that spending growth will begin to moderate.

Dive into the details in the latest U.S. Bank Freight Payment Index, which includes commentary by Bob Costello, Chief Economist and Senior Vice President for the American Trucking Associations (ATA).

Download and subscribe to the Index:

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Q2 Freight Payment Index 2018
Q1 Freight Payment Index 2018
Q4 Freight Payment Index 2017
Q3 Freight Payment Index 2017
Q2 Freight Payment Index 2017

Efficiency, Even in the Last Mile


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Small parcel shipping is growing in both volume and complexity. But with deeper visibility and insight into the last mile, you can better manage the process to reduce manual efforts, easily determine the least expensive shipping option, and get the shipping data you need to best negotiate discounts with carriers.

The small parcel solution within U.S. Bank Freight Payment provides an automated processing and payment solution that conducts contract audits, tracks and reports delivery performance, and provides detailed reports highlighting savings opportunities.

Discover how we can help you proactively manage small parcel and identify opportunities to gain efficiency and reduce costs.


Data, in your lane

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By Rick Erickson

Managing an effective supply chain is fast-paced and demanding. Future thinking is essential and can be complex. What if the answers were already at your disposal?

The way you do and have done business can provide insight into how your processes can be more efficient and can even alert you to upcoming challenges. Building on insight from American Shipper’s The Data-Rich Path Through Transportation Volatility special report, we recommend these four steps for getting started.

1. Focus on what’s important to you.
Every business is different, and your shipping needs have their own set of unique challenges. Tackling them all at once isn’t realistic, so the first step is deciding which measures you’d like to improve on. One of the external forces that you’ve likely dealt with is capacity fluctuation. Carriers cannot always provide capacity, and this will likely be an increased threat in the future. Having insight from data can change the way you procure freight by giving you a complete view of your transportation network. Instead of “pounding the phones,” you’ll be able to predict when and why carriers are taking less of your freight.

2. Leverage single sources that provide multiple key
data points.

There is such a thing as too much data. In fact, receiving an abundance of information from multiple sources is overwhelming and can do more hurt than good. It’s easier to manage fewer services with the right data. Focus on one area of data at a time, and get it right.

3. Look to your existing freight data.
As mentioned in the American Shipper report, the freight audit and payment process is much more than the last step in closing the loop on a transaction. Valuable and useful data is at your fingertips. Freight bills contain pertinent insight into your carrier relationships. Examining this information will help you better understand your spend across different variables and can even inform future supply chain decision-making.

4. Be sure sources are vetted and accurate.
It’s important to note that not all freight data is reliable. Without applying proper business rules, audits and data conditioning, you can’t be certain that your sources are accurate.

Wading through too much data isn’t something you have to or should do alone. If you’re not quite ready for the deep dive, consulting might be an appropriate next step. U.S. Bank can help answer your questions and analyze your current wealth of information. If you are strategic about this approach, it’s worth it in the long run.

Contact us at intouchwithus@usbank.com or 866.274.5898 to start using data to your advantage.

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Click here to download the report.

CAT-13859001 (06/17)

Data by the truckload

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By Rick Erickson

In the special report The Data-Rich Path Through Transportation Volatility by American Shipper, one theme rings true: Shippers need data. But do shippers want data? Fortunately, the industry has moved far beyond viewing data as inaccessible or intimidating. Today’s shippers are increasingly savvy and continually looking for ways to optimize their transportation networks. The following focus areas can help them determine which data to analyze and how to adapt their processes.

Abundance of carrier shortages
As the report notes, external forces such as capacity fluctuation and broker consolidation are making the need for data even more crucial. When their usual carriers can’t keep up with demand, shippers tend to “pound the phones,” calling around until they can find a carrier with capacity. This common practice is highly inefficient. Improved planning through proactive data analysis can help.

Hunting and (too much) gathering
Once shippers decide to implement a meaningful data analysis plan, there’s no shortage of data. In fact, there’s often too much—leaving many shippers feeling like they’ve gone from zero to 100 almost overnight. Whether it’s orders, shipments, tracking and shipping status reports, or freight invoices, shippers have easy access. And they’re not just generating the data themselves: It also comes from disparate sources such as transportation management systems, carriers, third-party payment providers, logistics systems and other visibility tools.

Yet data for the sake of data is worthless. To conduct truly meaningful analyses that can drive strategy, shippers need to start by digging through the quantity to find the quality data.

Finding a solution to the time crunch
To effectively plan for the future and optimize their networks, shippers need help navigating through too much data from too many sources. And right now, they simply don’t have the time or the resources. Shippers are aware that this needs to be done, but they might not be prioritizing it.

How can you get started while maintaining busy schedules and heavy workloads? Next month we examine the solutions to these data problems, and help you find the best option for your organization.

Or contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation today.

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Click here to download the report.

CAT-13771895 (05/17)

The data-rich path through
transportation volatility

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Technology is supposed to make it easy to obtain critical data, but it can also make it easy to get buried in an avalanche of too much information. Don’t let “TMD” (too much data) paralyze your business decision-making process.

Learn steps to sift through information overload and find actionable data critical to moving your business forward in this special report from American Shipper.


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Find out how you can protect your DPO in this webinar.

Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

CR-13216814 (03/17)

BP knows freight payment isn't like other payables

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3 questions to ask yourself about the freight payment process

“There's a saying in the payment industry,” notes the 2016 American Shipper Transportation Payment Study. “Freight payment isn't like other payables.” It's a saying many shippers have heard. But what does it really mean?

Justin Colley, Category Manager of Warehousing and Road Transport at BP, uses a scenario to explain: “You can have two invoices from the same provider from the same origin and destination on the same day that have different total costs. And both are legitimate.” That scenario doesn't tend to occur with other payables—and it's one an accounts payable team typically can't address without bringing in leadership from the logistics department.

This level of complexity explains why companies must take a different approach for freight payment and audit than for other payables. To discover what that approach should look like, ask yourself these three questions.

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1. Can software handle all your freight needs—without straining your IT department?
While many companies try a one-size-fits-all approach to payment software, it’s unlikely that standard software including ERP can handle all modes of freight. That means freight payment, if done in house, can require extensive IT involvement, which is a key reason some companies cite for outsourcing.

2. Is your current approach giving you the visibility you need?
“If shippers don’t have valid insight, they can’t make valid decisions,” notes Bobby Holland, Director of Freight Payment Consulting at U.S. Bank. Data analysis and benchmarking can provide this visibility, allowing shippers to identify outliers in performance and cost. Yet most companies don’t have the technology and expertise in house to effectively collect, cleanse and analyze data. That’s one key reason they turn to outside vendors.

Since using U.S. Bank Freight Payment, Colley says, his company has benefited from a really detailed view of what freight costs it’s paying for: line haul, fuel, demurrage and toll charges. “What we view at BP as contractual costs versus controllable costs.” And while contractual costs are set, these insights enable BP to ask questions about controllable costs. For example, are there operational changes they could make to cut demurrage charges? Is every carrier billing equally for demurrage, or is one carrier in particular ending up with wait times?

3. Which department is responsible for freight payment, and is it the best choice?
As companies begin to think of freight payment as a strategic business process, not just a task, they should reconsider which department is responsible for it. Because freight is a payable unlike any other, the answer may not be accounts payable. Instead, the logistics department (or supply chain, in some companies) is likely in the best position to truly understand the complex nature of freight payment. They're also in the best position to take action, based on the results of data analysis and benchmarking, to improve carrier relationships and identify efficiencies. Yet Rick Erickson, Global Director of Freight Payment Solutions at U.S. Bank, notes, “All of the different functions need to be involved regardless of who's the overall owner of the process.”

We welcome the opportunity to discuss just how unlike other payables freight payment is—and how your company can best leverage the opportunities that can come from an effective process. Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

View the full American Shipper report here.

Click here to listen to the accompanying Making Payment a Part of the Logistics Process webinar.

MMWR-105883 (01/17)

A strategic approach to payments.

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Find out how to apply knowledge to future procurement cycles.
With Rick Erickson

In its 2016 Transportation Payment Study, American Shipper notes, “The idea that there's a strategy to paying bills might seem odd to some companies, but anyone involved in payment of freight bills should know differently. When and how bills are paid, how they're audited, how the data from invoices is used to inform future procurement cycles. These are all areas that impact the shipper-carrier relationship.”

Rick Erickson, Global Director of Freight Payment Solutions at U.S. Bank, explains what a strategic approach looks like by breaking it down into six key steps.

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Make the decision to partner.
There are many ways to make freight payments part of the overall logistics process including leveraging in-house solutions or buying technology. A growing number of shippers, however, have realized the operational efficiency and value a freight payment and audit vendor can bring to the payment process. An outside vendor can reduce data entry, increase accuracy and free up resources so your team can think more strategically about your supply chain.

Commit to 100% pre-payment audit.
Regardless of the approach that a shipper takes, the audit piece—validating the rates, contract adherence, etc.—is an important component to the process, and the vast majority of shippers see this as an integral part of freight payment. Justin Colley, Category Manager of Warehousing and Road Transport at BP, recently explained that, along with partnering with a freight audit and payment company, having contracted rates was a big part of simplifying the audit process for BP: “It makes audit easier for a third party to accomplish rather than having a buyer or logistics manager sign off on every payment. We enabled ourselves to outsource.”

Experience the benefits of collaboration.
Regardless of which department is ultimately responsible for freight payment, it is more than “just making payments.” The most successful shippers are those that foster collaboration. By ensuring that logistics, technology, transportation, treasury, finance, supply chain and accounting have a voice when discussing freight payment and audit needs, all stakeholders can reap benefits that positively impact individual teams and the broader organization ranging from reduced costs, richer supply chain data and enhanced cash flow to name just a few. Collaboration should extend to carriers as well. Providing real-time payment status and online communication tools for immediate exception resolution helps foster the shipper/carrier relationship.

Enhance the shipper/carrier relationship.
Carriers appreciate predictable and reliable payments. Todd Wilson, director of cash management for YRC Worldwide says it this way. “Carriers who deliver timely freight shipments deserve to be paid in a timely fashion as well,” said Wilson. “We are a company with many expenses. We need to fuel our trucks and pay our folks. When shippers fail to make a payment for services we've rendered, that really impacts us, and if they meet their contracted terms, that only helps us to meet our own obligations.” An effective freight audit and payment solution can help ensure payments are made on time, which is an essential part of maintaining good carrier relationships.

Leverage big data for business intelligence.
Business intelligence is one of the primary value drivers for shippers in a freight payment solution. While some shippers are looking at payment as just a task, on the other end of the spectrum shippers are taking advantage of all the information that's gathered through the process and really leveraging the technology. Leveraging data analysis tools from your freight payment and audit partner can help you quickly determine cost savings opportunities.

Support strategic decision making.
Shippers are going beyond KPIs and reporting on what happened last week, last month or last quarter to forecast and predict how their initiatives will impact their supply chain in the future. With more sophisticated predictive and prescriptive analytics tools, shippers can more quickly measure this impact and support strategic decision making through:

  • • Modeling – using historical trending pattern analysis to predict future outcomes,
  • • Clustering – to identify high density lanes for consolidation opportunities,
  • • “What if” scenarios – to predict the possible consequences based on different choices of action, and
  • • Insight – the best course of action for a pre-specified outcome and the ability to determine the likelihood of the outcome occurring

Taking the next step.
Shippers interested in taking a more strategic approach to freight payment should start by making the decision to partner. This all-important first step opens organizations to many improvement opportunities. According to Erickson, “Many times, this comes from an assessment of audit capabilities and effectiveness. You can uncover operational efficiencies and savings, enhance carrier relationships, and gain better insight into your supply chain with a strong freight payment and audit partner that utilizes a consultative approach, best practices, and understands your specific needs.”

Want to discuss how to make your approach to payment more strategic? Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

View the full American Shipper report here.

Click here to listen to the accompanying Making Payment a Part of the Logistics Process webinar.

MMWR-103724 (12/16)

Gaining visibility through data

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In the 2016 American Shipper Transportation Payment Study, 81% of shippers said they expect a freight payment and audit vendor to deliver additional services. Reporting/business intelligence tools, rate benchmarking and data cleansing top the list—and with good reason.

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Source: 2016 American Shipper Transportation Payment Study

Shippers are increasingly learning that to uncover efficiencies and forecast effectively they need visibility into their supply chains—including their payment process. And getting that visibility requires both the right data and the ability to analyze it. It's not an overnight solution, notes Justin Colley, Category Manager of Warehousing and Road Transport at BP. But once you're analyzing the data correctly, “You can become very formulaic and systematic about how you approach controlling costs.”

Reporting/Business Intelligence Tools. According to the report, 69% of shippers point toward reporting and business intelligence as a top desire. “Business intelligence is one of the primary value drivers for shippers in a freight payment solution,” explains Rick Erickson, Global Director of Freight Payment Solutions at U.S. Bank. “Being able to use the technology to get a view of your supply chain through all of the data that's collected—from the freight invoices through the process, matching with bills of lading—can lead to uncovering additional efficiencies and cost saving opportunities.”

Benchmarking. Benchmarking freight costs against similar shippers can be an interesting way to ensure that your costs are in line. In addition to benchmarking your rates, the American Shipper study highlights the need to benchmark your payment processes as well. Erickson notes, “Benchmarking doesn't always have to be formal research. It can include conversations with peers, networking and even feedback from carriers.” While shipper events and conferences are great places for these conversations to take place, the report shows such conversations are rarely happening. In fact, only 14% of shippers said they frequently discuss best practices with outside organizations. When shippers make benchmarking—both formal and informal—part of their everyday processes, they can identify cost reduction opportunities and also determine if they're leveraging their systems appropriately.

Data Cleansing. While any company that processes payments electronically should have extensive data, if that data hasn't been cleansed it won't lead to trustworthy, actionable results. Simply put, imagine how much a cost-per-mile metric would be skewed if mileage details were missing from a group of shipments. An effective data cleansing process takes care of those anomalies, looking for outliers and duplicates, filling in incomplete data when possible and removing inaccurate data.

Erickson sees these three topics as essential to the conversation for any shipper that's hoping to get costs in line and maintain solid carrier relationships. And he believes shippers are right to expect these value-added services from their freight audit and payment vendors. He urges, “If you've implemented a freight audit and payment technology solution, that's great. But what else can you do in terms of business rules, cost allocation, reporting analytics and benchmarking rates?”

We welcome the opportunity to explore just what else you can do—and how U.S. Bank can help you do it. Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

View the full American Shipper report here.

Click here to listen to the accompanying Making Payment a Part of the Logistics Process webinar.

MMWR-102534 (11/16)

Electronic invoicing: What new European Union directives mean for you

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Electronic invoicing has been mandated for public procurement by 2018 in the European Union. However, many companies have been slow to adapt due to the complexities of EU member states having different legal, financial and administrative rules.

Read this white paper to see how you can mitigate the risks and reap the benefits of e-invoicing sooner than required.

CR-13309890 (03/17)

Leverage your freight spend to improve working capital

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Click here to download The Importance of Working Capital in the Supply Chain report by the Aberdeen Group.

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How can you leverage freight spend to optimize your capital spend? Learn some significant business tips in this infographic.

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Are you in a position to leverage supply chain freight spend to improve your working capital advantage? Review this checklist from the Aberdeen Group to see where you stand.

MMWR-97232 (9/16)

How to improve working capital by leveraging your freight spend

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By Bryan Ball, Vice President and Principal Analyst,
Aberdeen Group

Aberdeen's recent report, The Importance of Working Capital in the Supply Chain, found that many companies fail to take advantage of one readily available source for improving working capital in their supply chain: freight spend.

More than 80% of the Best-in-Class companies (top 20%) outsource their freight audit and payment process. Best-in-Class companies outsource 2.7 times as many shipment invoices. They pay 31% less ($9.81 versus $14.15) to process those invoices versus processing internally, so there is obvious benefit to using a freight audit and pay service provider. The real surprise is the high percentage of All Others (remaining 80% of the companies) who choose not to outsource their freight audit—which is less than 50%. Of that percentage, even fewer use a third party for the settlement process, which is where the trade finance solution comes into play. For those who have chosen to not outsource their freight audit and pay, a lack of awareness may be the reason for their decision.

The benefit of using an automated freight audit and payment solution with trade finance not only increases working capital but also can solve many other challenges for the shipper and carrier. The net results and benefits being:

  • Carriers, who need cash to fund operations, get paid faster (within five days)
  • There is greater working capital for the shipper, who may be facing mandates to extend out their credit terms with suppliers, which can be as long as 90 days without renegotiating rates
  • Streamlines processes
  • Eliminates costs due to billing errors, late payments, collections and reconciliations
  • Offers 100% prepayment audits
  • In addition to the financial benefit, trade finance takes the stress out of the relationship between shippers and carriers over payment issues, and allows them to focus on the business

The following example shows how the numbers might work.
Shipper assumptions—average cost of capital at 10%–100% participation in the trade finance solution

  • Assumes current DPO is 25 days on 30-day terms
  • $100,000,000—30-day terms
  • 60-day terms—$607,000—increased working capital
  • 90-day terms—$1,127,000—increased working capital

With freight spend ranging from 3% to 12% of revenue for most product-based companies, this approach could significantly improve working capital, but most organizations do not leverage their freight audit and pay a solution partner to provide trade financing for their total freight spend. Lack of awareness of the opportunity, and lack of visibility into the actual size of the freight spend itself, are the two main reasons for the call-to-action. We encourage companies to act now to increase their company's working capital by leveraging freight spend and partnering with a freight audit and payment provider with trade finance capability.

MMWR 94597 (8/16)

Why working capital matters

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By Bryan Ball, Vice President and Principal Analyst,
Aberdeen Group

Many shippers saw their freight costs increase over the last year. Some of this increase can be readily identified as stemming from event-driven incidents such as port slowdowns or extreme weather and resulting premiums. What are more difficult to pin down are costs stemming from the structural changes associated with B2B and B2C convergence, a trend we have documented in Aberdeen's research report, B2B and B2C Convergence: A Call to Action (July 2014).

The shifts that convergence has brought to logistics flows (detailed in Table 1) can be summarized as follows:

Shipping to or through a traditional distribution center.
Currently 60% of companies utilize this model. Two years ago that figure was 75%–85% —a definite decline.

Shipping direct to customer.
Currently 61% of companies utilize this model. Two years ago it was fewer than 50%. This represents a significant increase and we expect this trend to continue.

Table 1: Logistics Flows Spanning B2B and B2C Activities

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Source: Aberdeen Group, January 2016

The net effect of these changes is:

  • An increase in the percentage of parcel shipments to support customer expectations for all shippers at the manufacturer, wholesaler and even retail level, since the latter must provide “pick-up in store” service.
  • The issue here is that parcel shipping is 3 to 5 times greater than the cost of shipping in some form of bulk freight (carton, box, pallet, etc.). In other words, to support omni-channel workflows, freight costs are structurally increasing for nearly all shippers.
  • In many cases, the shippers (manufacturers, wholesale distributors and “brick and mortar” retailers) have to absorb the freight cost to compete with online retailers, or they risk losing the order.

Shippers will likely continue to see increased shipping costs as consumers continue to demand same-day or next-day delivery. In order for shippers to prevent an unfavorable hit to their bottom lines, they must look for every opportunity to unlock working capital. Companies should look at their freight payment process as it may possibly be the only untapped resource left. Freight payment coupled with a trade finance solution optimizes working capital, and it won't hurt critical carrier relationships.

MMWR 92140 (6/16)

Finding the hidden value in your supply chain

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By Bryan Ball, Vice President and Principal Analyst,
Aberdeen Group

All companies strive to optimize their working capital, either by reducing the need for it or by improving its flow from existing operations. Best-in-Class companies excel in this regard, as shown in Figure 1, which compares the cash-to-cash cycle for the Best-in-Class to that of their competition.

Best-in-Class companies have a cash-to-cash cycle that is half as long as that of their competition. This accelerated access to working capital from operations can provide funding for acquisitions or capital equipment, as well as reduce the dependence on borrowing, resulting in fewer interest payments and a positive P&L impact.

When thinking of their supply chain, most companies immediately zero in on inventory reduction as a means for improving working capital, since this reduces the capital employed and is, therefore, always worthy of discussion. However, this approach is not news.

What most companies do not even consider is the untapped opportunity to leverage their freight spend to optimize working capital. The companies that have adopted this approach have seen their working capital improve as a result.

The key is moving beyond the standard freight audit and payment services and leveraging a solution that also includes trade finance. This can increase days payable outstanding (DPO) for both the shipper and the carrier, creating a mutually beneficial relationship. Freight spend itself commonly ranges from 3% to 12% of revenue, making it a large untapped resource for working capital improvement. It is somewhat surprising that so few companies have taken advantage of this opportunity to improve their bottom lines.

MMWR 89228 (5/16)

Freight audit and payment, an untapped source of working capital

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With Rick Erickson

You said recently, “The art of working capital management has declined.” Why isn't it a focus?
The no- to low-interest-rate environment following the 2008 market crash made it easy. Debt wasn't as big of a concern, so many companies let their attention to working capital management slip. Now that the Federal Reserve has started to raise rates and the economy is improving, companies are feeling increased pressure to unlock working capital and keep their cost-to-serve down—two essential elements of building a competitive global supply chain.

Why is working capital management so important?
Margins are tight for shippers and carriers. In a time when two-day and even same-day shipping is common, consumers expect products to arrive quickly. As any logistics professional knows, speed-to-market impacts overall costs. And it's not just freight costs that put pressure on companies; they also need to have increased inventory. To compete in this fast-paced economy, companies must look for every efficiency possible within their supply chain. They can then use that preserved cash to reinvest in their business.

What steps have shippers traditionally taken?
Some shippers put pressure on their carriers to extend payment terms. While this helps shippers meet their working capital goals, it puts them at odds with carriers. In addition to their own working capital goals, carriers are under enormous pressures with increased regulations, driver shortages and ever-increasing demand. Shippers are realizing that meeting customers' demands requires solid relationships with their carriers. So it's clear that the shippers who treat their carriers well will have an advantage.

How can both shippers and carriers improve working capital?
With freight spend 3%–12% for most product-based companies, leveraging this spend to improve working capital through trade finance is a win-win. A freight payment solution with trade finance allows shippers to hold onto their cash beyond the typical 30-day payment terms. Meanwhile, carriers get paid upon invoice approval. Both sides of the partnership can maintain their highest levels of efficiency without carrying a burden for each other. Trade finance enables companies to easily accelerate cash flow by increasing working capital from 30 to up to 90 days without impacting balance sheets.

What examples have you seen of shippers excelling with working capital?
A global food and beverage company leveraged supply chain finance strategies for several years to extend terms to suppliers but excluded transportation providers due to their strict 30-day terms and concerns about capacity. By leveraging U.S. Bank Trade Finance, this industry leader increased working capital to 75 days and gave more favorable terms to carriers including payments within four days of invoice approval.

If a company with $100 million in annual freight costs had access to that money for 90 days instead of 30, it would see a working capital benefit of more than $1 million, assuming a weighted average cost of capital (WACC) of 10%. Regardless of interest rates, increasing your working capital can greatly impact your bottom line.

Want to discuss how an integrated freight management system can help? Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

MMWR 84420 (3/16)

Knowing what to ask

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A Response to the 2015 American Shipper Transportation Payment Benchmark Study
By Rick Erickson

This year's report from American Shipper, which benchmarked nearly 230 shippers and 3PLs, showed several key results worth noting. Among them, we saw that only 18% of shippers discuss best practices in freight payment processing with outside organizations. While that statistic might not jump out at most readers, our team at U.S. Bank took note.

As a company that works hard to help our clients think strategically—and views payments as a strategic function of any company—we wondered just why freight payment isn't a topic of more frequent conversation. And we wondered if that silence plays a big role in what the report called “the seemingly paradoxical situation where freight payers are concerned about the malfeasance from freight pay systems vendors, but also are unsure about how their own vendor handles their funds.”

Just why do so many shippers have concerns with freight payment providers? Well, the answer might be a lack of understanding about how the systems work.

Many providers use a float model, which means they take in shippers' money, co-mingle it with other funds for investments, and then pay carriers. The problem can arise during that middle step. As we saw back in 2013 with a few providers that went bankrupt, if the money disappears before payments are made to carriers, shippers are out money yet their carriers still expect to get paid.

One alternative is a trade finance model. Because we're a bank, we're held to higher standards and our freight payment model never “floats” money. In fact, we actually pay carriers before receiving shippers' money, so there's no risk of your money disappearing before an invoice is paid.

Finance models are just one of the many topics worth exploring as you consider your options for outsourcing freight payments. As you're figuring out what's best for your company, the American Shipper report is a good place to start for insights on what questions you might want to ask—and it's a great way to benchmark your company too. Check it out.

MMWR 70480 (7/15)

Making data work for you

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Technology innovations in transportation

Jeff Pape, senior vice president at U.S. Bank, explores key points you should consider in this podcast with Alessandra Barrett of the Journal of Commerce. Click here to listen to learn about visibility, data security, the most common mistakes made with in-house audits and how to reduce errors in data overall.

We welcome the opportunity to discuss the strategic and financial benefits of data analytics. Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

MMWR 76007 (10/15)

Are you ready for the new interest rate environment?

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Since the economic decline in 2008, many organizations have neglected to focus on working capital management. Now that interest rates are rising, careless management won't be so easily forgiven by the markets.

Learn how to establish and maintain a disciplined approach to working capital management in this article.

Want to discuss how an integrated freight management system can help? Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

MMWR 80045 (1/16)

Thinking beyond process

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When the 2015 American Shipper Transportation Payment Benchmark Study asked shippers which freight payment platforms they use, they discovered that about 10–15% use a purely manual process.

So what are the remaining 85–90% of companies using? The answer varies widely.

Most notable among the options cited is the gap between software-only solutions, such as ERP- and TMS-based systems, and more complete solutions. While ERP and TMS systems help automate freight audit and payment, few offer 100% prepayment audit and none offer trade finance to improve cash flow.

Staffed by transportation experts, U.S. Bank provides the expertise and service your team needs to simplify everyday tasks, from conducting prepayment audits to delivering actionable data reports. And because we're a bank, we face increased fiduciary responsibilities, so you can rest assured we have your best interests in mind—today and for the long term.

Contact us at intouchwithus@usbank.com or 866.274.5898 to learn how you can save time and money with our end-to-end freight audit and payment solution.

MMWR 72228 (8/15)

2015 American Shipper Study

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Click here to download the full 2015 American Shipper Transportation Payment Benchmark Study.

Don't settle for anything less

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For many readers of the 2015 American Shipper Transportation Payment Benchmark Study, one statistic was hard to miss: “Barely one in 10 invoices among all these modes [ocean, trucking, air] is accurate.” If your organization isn't auditing all invoices, you're losing money—and it could be a lot. In addition to wasting money, paying inaccurate invoices gives you an unclear picture of the cost of goods and services, which can affect your purchasing and pricing decisions.

Don't settle for widespread errors. Aim for nothing less than 100% audit and 100% accuracy.

With detailed audits on all invoices, U.S. Bank Freight Payment catches errors resulting in cost savings of approximately 2–4% of our customers' monthly transportation spend. And because our audits occur prior to payment, they result in cost avoidance—not the hassle of trying to chase carriers for refunds on money you've already paid.

Of course, pre-payment audits don't just save money. They also save your company a great deal of time because you don't have to go through every invoice manually—and you don't have to wait for carriers to adjust invoices. U.S. Bank Freight Payment facilitates online collaboration with your carriers to quickly resolve invoice exceptions. You and your carriers can quickly make adjustments within the system and upload any additional supporting documents necessary. So you see everything you need in a single spot, reducing your team's time and, ultimately, staffing costs.

Contact us at intouchwithus@usbank.com or 866.274.5898 to learn more about pre-payment audits and invoice accuracy.

MMWR 72204 (8/15)

Knowing when to outsource

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Asked in the 2015 American Shipper Transportation Payment Benchmark Study if “freight payment is a core process and should not be outsourced,” just over half of large shippers and about a third of small/medium shippers disagreed.

As shippers of all sizes have learned with other parts of their businesses, leveraging partnerships for key areas of business can be a safe and efficient solution. And freight audit and payment is one strategic process where partnering may make sense—if it's done right. So why are so many companies choosing not to outsource freight payment?

Control: As is typically the challenge in considering outsourcing, many shippers feel that in outsourcing freight payment they are giving up too much control. But, by leaving the details of freight payment in the hands of a trusted provider, it may offer strategic cash flow advantages and free up time for shippers to focus on strategic supply chain issues.

Improved technology: Today's ERP and TMS systems often have freight payment components. However, the resources and investment required to implement freight payment through a TMS/ERP solution are significant and require staff and ongoing cost to maintain. Also, TMS systems typically do not have enough detail to audit all charges including accessorials.

Lack of visibility and understanding of how freight funds are handled: In 2013 we saw a few freight payment providers go bankrupt; the misappropriation of funds by a few providers cast a dark cloud over the industry.

Many providers use a float model, which means they take in shippers' money, co-mingle it with other funds for investments, and then pay carriers. The problem can arise during that middle step. If the money disappears before payments are made to carriers, shippers are out money, yet their carriers still expect to get paid.

One alternative is a trade finance model. Because we are a bank, U.S. Bank is held to higher standards and our freight payment model uses trade finance. We never “float” money. In fact, we actually pay carriers before receiving shippers' money, so there's no risk of your money disappearing before an invoice is paid.

By not outsourcing freight payment, companies may be missing out on critical cash management tools, such as trade finance, that allow them to improve cash flow while still paying carriers on time. Also, they are missing operational efficiencies and leaving money on the table. For example, U.S. Bank Freight Payment provides 100% prepayment audit. Rest assured, we won't just pass invoices through the system and authorize payment. We ensure every invoice is correct first, so you don't have to go through the hassle of recouping funds for errors discovered weeks or even months later.

An end-to-end freight audit and payment solution consolidates auditing, exception management, researching payments and other time-consuming tasks, eliminating the stress, time and cost associated with handling these processes internally. Partnering with a bank adds another important advantage: It can help optimize working capital and manage risks due to a bank's increased fiduciary responsibilities.

We welcome the opportunity to discuss the strategic and financial benefits to outsourcing your freight audit and payment. Contact us at intouchwithus@usbank.com or 866.274.5898 to start the conversation.

MMWR 73462 (8/15)

Read the other articles in this series:

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