8 Signs Your Transportation Spend Management Needs Updating

Is your transportation spend management costing you more than it should? Here are 8 clear signs that your system needs an update - and how modern tools can save you time and money:

1. Outdated Data Analysis Tools: Old systems waste 45% of analysts' time on manual data prep. Modern platforms save millions with real-time, predictive insights.

2. Poor Cost Tracking: Fragmented systems lead to hidden expenses and invoicing errors. Centralized platforms provide full visibility and reduce errors.

3. Manual Processes: Manual invoice processing costs $15 per invoice and takes 25 days. Automation cuts costs by 84% and saves time.

4. Missed Contract Savings: Poor contract management can lose 40% of potential value. Digital tools ensure compliance and centralize agreements.

5. Weak Carrier Monitoring: Damaged shipments cost businesses $1B annually. Carrier rating systems improve performance tracking and reduce costs.

6. Outdated Freight Auditing: 80% of invoices have errors. Automated auditing catches 95% of mistakes and saves millions.

7. Basic Reporting Tools: Old systems lack real-time insights. Advanced analytics predict trends and optimize operations.

8. Disconnected Systems: Separate ERP, TMS, and WMS systems cause inefficiencies. Integrated solutions save time and reduce freight costs.

Quick Tip: Upgrading to modern tools like AI-powered analytics, automated invoicing, and centralized platforms can save 5-15% on annual freight costs.

1. Basic Data Analysis Tools

Problems with Old Systems

Old data tools create challenges in managing transportation spending. For instance, data scientists spend nearly half their time - about 45% - just preparing data [4]. These outdated systems often depend on manual entry, split data across different sources, delay crucial insights, and isolate information, all while struggling to handle large data volumes. These inefficiencies highlight the need for updated solutions.

Modern Analytics Solutions

New analytics platforms address these issues by offering real-time and predictive insights. Take these examples:

• UPS's ORION platform has saved between $100–$200 million [6].

• A fashion retailer managed to save $50 million in logistics costs [5].

• NileDutch cut empty container costs by over 12% [6].

• A pet supply company used machine learning to reduce shipping anomalies [5].

The shift to modern tools is gaining traction. Around 80% of third-party logistics providers and 77% of shippers are actively investing in predictive analytics and IoT data [6]. By 2025, it's expected that half of global product-focused enterprises will adopt real-time transportation visibility solutions [3].

These platforms bring several advantages, including:

• Automated data normalization across carriers and transportation modes.

• Real-time tracking of costs and anomaly detection.

• Predictive analytics to manage expenses more effectively.

• Interactive dashboards for better decision-making.

• Machine learning tools to uncover cost-saving opportunities.

Companies sticking to outdated data tools risk falling behind. By upgrading to advanced analytics, businesses can make quicker, smarter decisions that improve efficiency and cut transportation expenses. These modern systems directly tackle the inefficiencies and hidden costs caused by older methods.

2. Poor Supply Chain Cost Tracking

Disconnected Data Systems

When supply chain systems don't communicate effectively, it creates major financial challenges. Fragmented systems often leave procurement teams without a clear view of vendor and carrier activities, leading to inefficiencies. In fact, poor data quality costs companies over $600 billion each year [2].

These disjointed systems can result in hidden expenses, invoicing errors (ranging from 1-4% of invoice value), and slow processing times [9]. Without proper visibility across the supply chain, these issues can spiral out of control.

"Siloed data, lack of standards, and lack of skills... are at the root of poor data quality, [a problem which] suggests that data and analytics roles are being starved of the resources needed to fix them." - NC State University study [2]

Fixing this starts with simplifying and unifying systems - this is where single-platform solutions come into play.

Single-Platform Solutions

Single-platform solutions offer a consolidated way to oversee transportation expenses. Stewart Dunsmore, Senior VP of Supply Chain Services & Technology at nVision Global, emphasizes the importance of visibility: "Visibility with summary and line-item detail allocation is critical to understanding where every freight dollar goes" [8].

These platforms provide several key benefits:

• Integrated systems that connect data from customers, suppliers, and carriers [8]

• Real-time tracking and reporting to monitor costs as they occur [8]

• Automated workflows to reduce manual errors and improve efficiency [10]

With global trade hitting $28 trillion in 2021, these tools are essential for managing complex international operations. They simplify customs, duties, and tariff processes across regions [8][10].

To improve cost tracking, companies should focus on:

• Strengthening collaboration between supply chain and finance teams [7]

• Normalizing and cleaning data for accuracy [2]

• Centralizing information into unified systems [2]

These steps allow businesses to identify cost-saving opportunities and make smarter decisions about suppliers, transportation methods, and contract terms [9][1].

3. Time-Consuming Manual Work

Manual Process Bottlenecks

Manual data entry is a major hurdle in transportation spend management. On average, it takes 10–15 minutes to process a single document, and for complex shipments, this can stretch to an hour. These delays lead to higher costs and operational inefficiencies [11].

Studies show that companies lose significant time and resources due to manual processes. For instance, 40% of B2B orders, 5% of D2C orders, and 20% of inbound deliveries are impacted by inefficiencies. In total, businesses lose about 162 hours every month resolving errors and handling data entry [13]. For smaller 3PLs, around 25% of weekly work hours are spent on tasks like invoicing and auditing across disconnected systems [14]. This is time that could be better allocated to strategic planning or improving customer service.

"Many argue that inaccurate data entry is one of the most expensive mistakes that logistics businesses make" [12].

These inefficiencies highlight the pressing need to automate invoice-related processes.

Invoice Process Automation

Processing invoices manually costs about $15 per invoice and takes 25 days on average. With automation, the cost drops to just $2.36 per invoice, offering a massive reduction in both time and expense [15]. Beyond data entry, automation delivers measurable improvements in several areas:

Real-world examples illustrate these benefits:

"Loop eliminated our AP & AR team's manual workflows. We now retrieve documents, categorize, audit, and approve an invoice within 13 minutes" [16].

"Loop transformed the way we do business, enabling us to capture data and utilize it for better insights on decision-making from how we allocate transportation spend to negotiating carrier contracts. They identified 6% in transportation savings for GILLIG" [16].

Automation does more than cut costs. It minimizes human errors in data entry [15], streamlines workflows for better visibility, ensures compliance with standardized processes, and improves supplier relationships through quicker payments. It also enhances employee satisfaction by reducing tedious administrative tasks. Currently, office workers spend nearly 58% of their time on tasks like filing expenses and processing invoices [15]. By automating these processes, businesses can shift their focus to higher-value, strategic activities.

Key Benefits of Automating Your Transportation Management

4. Missed Contract Savings

Outdated contract management systems can quietly drain transportation budgets, even beyond the inefficiencies of analytics and automation tools.

Challenges with Managing Multiple Contracts

Ineffective contract management can lead to significant losses - up to 40% of potential value, according to research. Alarmingly, 71% of companies admit they can’t locate at least 10% of their contracts [17][19]. Similar to outdated data systems and manual workflows, poor contract oversight can cripple transportation spend management. Here’s how these issues hurt your bottom line:

• Lost Documents: A scattered, decentralized system makes it hard to verify rates.

• Missed Deadlines: Overlooked renewal dates can result in unfavorable automatic contract terms.

• Rate Compliance: Weak tracking allows carriers to charge rates higher than agreed upon.

• Legal Delays: Non-standard contracts often demand extra legal review, adding about 10% more time to the process and potentially costing up to $7 million in delays [17].

Industry insiders acknowledge the scope of the problem:

"Several Gartner clients candidly admit they don't know where all their contracts are." [18]

The Role of Digital Contract Tools

Digital contract tools can solve many of these headaches by centralizing storage, automating renewal alerts, and ensuring compliance with agreed rates. These tools also streamline collaboration and provide analytics to fine-tune carrier agreements. For instance, in Q3 2023, Maersk adopted Dock 365's contract management software. By centralizing over 5,000 contracts and automating renewal reminders, they cut contract-related disputes by 22%, reduced transportation costs by 7%, and improved both rate compliance and carrier selection.

Here are some options to consider based on your business needs:

• Entry-Level Tools: Affordable solutions like SignWell (from $8/month) and PandaDoc (from $19 per user/month) offer basic features [20].

• Mid-Tier Platforms: Tools such as ContractSafe (starting at $375/month) include advanced search options and customizable alerts [20].

• Enterprise Solutions: Comprehensive systems like ContractWorks (around $700/month) and DocuSign CLM provide full lifecycle management with advanced automation [20].

To maximize savings, focus on tools that match your business’s size and needs. Look for features like automated alerts for pricing changes, performance tracking, and seamless integration with your transportation management systems [21]. These can make a measurable difference in your contract efficiency and overall transportation spend.

5. Weak Carrier Monitoring

Once you've updated your analytics and contract processes, the next step is improving how you monitor carrier performance.

Tracking carrier performance poorly can take a toll on your finances. Damaged shipments alone cost U.S. businesses $1 billion each year [23]. Without proper monitoring, expenses increase, and service quality suffers.

Missing Performance Data

Many companies fail to keep tabs on critical carrier metrics, making it harder to choose reliable partners or improve performance. Here are some key metrics often overlooked:

Without solid data, businesses risk relying on underperforming carriers. A data-driven approach is crucial to avoid hidden costs and get the most out of your transportation budget.

Carrier Rating Systems

Modern carrier rating systems can help streamline operations and cut costs through:

• Tracking Performance Metrics
  Transportation costs typically make up about 10% of a product's total cost [23]. Digital tools like EDI or API processing can reduce expenses by 81% and speed up processes by 77% [23].

• Making Data-Driven Decisions
  Real-time insights allow businesses to benchmark carrier performance, improve negotiations, and quickly address problems. Platforms like Mello’s carrier analytics provide actionable data, helping companies build a more reliable and efficient transportation network.

For example, in Q3 2024, an enterprise shipper switched to Shipium's carrier management platform and cut parcel spending by 10% compared to their old system [22].

Adopting data-driven carrier management doesn’t just save money - it creates a stronger, more reliable transportation network. Better monitoring tools are just as important as advanced analytics when it comes to finding and seizing cost-saving opportunities.

6. Outdated Freight Auditing

Freight auditing is draining businesses of millions due to unnoticed charges. With 80% of carrier invoices containing discrepancies and overcharges typically ranging from 8–10% above correct amounts [26], older auditing methods are falling short in handling today’s shipping challenges.

Common Billing Errors

Manual freight audits often fail to catch billing mistakes, which can significantly inflate costs. Here's a closer look at some of the most frequent errors:

These mistakes add up quickly. For example, the liner shipping industry alone incurs $34.4 billion annually in invoice processing inefficiencies [26]. Without modern auditing tools, these costs directly impact profitability.

Automated Audit Tools

AI and automation have transformed freight auditing, catching errors that manual reviews often miss.

"Freight billing audit is the process of examining, adjusting and verifying freight invoices for accuracy. Freight billing invoice audits protect shippers from overpaying. They are also useful tools to help optimize their shipping processes by cutting down on other inefficiencies."
– Cara McFarlane, Sales enablement solution marketing manager, Hyland [26]

Automated auditing is already delivering impressive results. A multinational retailer introduced AI-powered auditing in 2024 and recovered $1.8 million in overcharges within a year, improving freight spend management by 12% [27].

Here’s why automated systems are a game-changer:

• Real-time verification: Errors are flagged instantly, preventing payment of incorrect invoices.

• Higher accuracy: AI solutions achieve 95% accuracy compared to 70% with manual methods [27].

• Cost savings: Automation can slash operational costs by up to 80% [27].

• Easy integration: Platforms like Mello connect directly with transportation management systems for seamless use.

With nearly 79% of companies experiencing supply chain disruptions that have cost at least 4% of their revenue over the last three years [25], automated audit tools are now a must-have for managing transportation expenses effectively. These tools not only reduce overcharges but also pave the way for better overall spending control.

7. Basic Reporting Tools

Basic reporting tools often fall short when it comes to cutting transportation costs. With 75% of supply chain leaders citing demand and cost unpredictability as their top challenge [28], traditional systems simply don’t align with today’s demands.

Current Report Limitations

Older reporting methods depend heavily on historical data and outdated workflows, making it hard to plan ahead. Some common issues include:

• Heavy reliance on manual data entry

• Focus on past performance instead of future trends

• Limited visibility across fragmented data sources

• Delayed decisions due to lack of real-time insights

Take this example: A major food retailer faced unnecessary costs by overusing Next Day Air shipping. Their basic reporting system didn’t provide the visibility needed to optimize fulfillment. After teaming up with Intelligent Audit, they pinpointed better shipping strategies and cut premium shipping costs [29].

Modern tools are stepping in to address these gaps.

Cost Prediction Tools

Today’s platforms transform raw data into actionable insights. As one Senior Director of Logistics put it:

"As we navigate a historically volatile market, we are rethinking how we do business. Procure IQ's advanced analytics can help us navigate uncertainty and has been invaluable in helping us develop a new, more efficient and cost-effective transportation-buying process, for everything from fresh food to kitchen equipment." [29]

Here’s what these advanced tools bring to the table:

• Real-time visibility: 94% of 3PLs now provide EDI capabilities for instant data access [31].

• Predictive analytics: Used by 49% of top 3PLs to anticipate trends [31].

• Machine learning: Automatically flags unusual cost spikes [5].

• Custom dashboards: Allow for detailed analysis of cost drivers [30].

For example, a luxury fashion retailer partnered with Intelligent Audit and uncovered $50 million in potential logistics savings by leveraging data-driven insights and better expense management [29].

For businesses still using outdated systems, modern platforms like Mello offer a way to centralize logistics data, automate analytics, and turn raw numbers into actionable strategies.

8. Separate Business Systems

System gaps are a clear sign that it’s time for an upgrade in today’s logistics landscape. Relying on separate transportation, ERP, and warehouse systems often leads to unnecessary costs and inefficiencies.

Problems with Unconnected Systems

Research shows that data silos and manual workflows increase freight costs and hurt the customer experience [33]. Some common issues include:

• Delayed responses to shipping problems and capacity limits due to a lack of real-time integration.

• Lengthy setup times: ERP implementations can cost about $9,000 per user and take 14–21 months, while standalone TMS setups require 3–6 months [32].

For example, Green Rabbit integrated NetSuite ERP into its operations, eliminating manual data entry and delays. This allowed the company to process tens of thousands of orders daily [35].

Bringing these systems together can improve operational efficiency and help control costs.

Benefits of Connected Systems

Modern integrated solutions link WMS and ERP systems, offering real-time insights into inventory and order statuses. Key advantages include:

• Faster ROI: Nearly 89% of companies using a TMS recover their investment within 6 to 18 months [32]. A customer working with nVision Global saved over $34 million by adopting integrated logistics solutions [32].

• Automation: Connected systems streamline order processing by linking ERP, WMS, and TMS through API calls, removing the need for manual input [34].

• Smarter Decisions: Centralized logistics data and automated analytics make it easier to spot cost-saving opportunities.

For businesses still using separate systems, API connections or middleware can bridge the gaps, turning disjointed processes into a smooth operation [35]. This step complements earlier strategies to improve spend management.

Steps to Update Transportation Spend Management

Updating your transportation spend management is no longer optional, especially given the challenges of outdated systems and inefficiencies. With the right approach, you can modernize processes, cut costs, and stay competitive. For instance, companies using Transportation Management Systems (TMS) report saving 5-15% on annual freight costs [38].

Here’s how to get started:

• Adopt Advanced Technology
  Invest in a robust TMS tailored to your needs. Options like Descartes MacroPoint (rated 4.7/5 from 409 reviews) or Project 44 (rated 4.6/5 from 494 reviews) can streamline operations. The TMS market is on the rise, projected to hit $2.11 billion by 2024 [37].

• Centralize Your Data
  Consolidating transportation data helps you make smarter decisions. As Tracey Smith, president of Numerical Insights, explains:

  "If you need to look for cost savings and you've taken all the low-hanging fruit and renegotiated all your contracts, rogue spend is an area where you can get into your tail spend and try to find cost savings" [36].

• Leverage Automation
  Automate tasks like invoice reconciliation, claims management, carrier tracking, and cost analysis. Automation not only saves time but also pays off quickly - over 40% of companies see returns on TMS investments within 6-12 months, while another 25% break even within 18 months [38].

• Collaborate with Experts
  Work with third-party logistics providers to fast-track improvements. Platforms like Mello offer solutions for data centralization, automated workflows, and actionable cost insights.

Finally, ensure your team is on board. Clear communication and thorough training are essential for successful implementation and long-term benefits.