Top 5 Challenges For 3PL and SCM Companies Validating Courier Bills Manually

Top 5 Challenges for 3PL & SCM Companies Validating Courier Bills Manually

Transportation providers, such as couriers and co-loaders, are important business partners for 3PL and SCM firms. It’s vital to keep track of these providers and maintain good business relationships. As a result, fast validation of vendor bills is essential for prompt payment of vendors.

The purpose of vendor bill or courier bill validation is simple: pay only what you owe in freight expenses, nothing more. Simultaneously, appropriate payment guidance for any deduction should be sent to vendors so that relationships are not stressed and the finest service from vendors is leveraged for the long run. Manual bill validation can result in a variety of issues, all of which can have a negative impact on your productivity. Traditional concerns include time-consuming, resulting in money loss, occasionally dull, resulting in human error, and payment processing delays.

The top five challenges that 3PLs would face if they manually validated freight bills are as follows:

  • Mapping of Complex Zones
  • Detecting Weight Mismatch
  • Variable Fuel Surcharge
  • Additional Charges that Change Over Time
  • Validating Dockets in Multiple Bills

Continue reading to find solutions to your difficulties…

Complex Zone Mapping

The first step in confirming a courier bill is to make sure the fee per kilogram is correct. Because couriers can’t map every potential combination of India’s 20,000 pincodes, they’ll divide locations into zones. Table 1 shows a generic example of North and South, whereas Table 2 shows a mixture of State and area. Because of the rivalry and high load factors in metros, metro cities may be classed as different zones in some situations. As a result, there is not a standard format, and each courier has their own based on their load factor and presence.

Sample Rate Matrix Table 1
Sample Rate Matrix Table 2

You must now check the source pincode and identify the corresponding zone in the courier rate contract while validating the freight charge. Similarly, find the rate in the matrix for the destination pincode. Any minor error in determining the correct zone will go unnoticed. If a consignment is going from Hyderabad to Mumbai, for example, the zone should be AP & TG to MH, which costs Rs.11 per kg. If Mumbai is mistakenly labelled as “West,” the fee per kilogram is Rs.12.

Now, utilizing an XL sheet to design zones for 1000s of dockets for tens of Couriers is not only time-consuming, but also highly error-prone, with the potential to lose money. This might be prevented if we had a system in place where each courier rate contract is loaded into the software, along with all cargo details. The software then maps the source and destination pincodes into the appropriate zones, calculates the fee per kilogram, and compares it to the bill.

Detecting Weight Mismatch

In the freight bill, couriers will state Charged Weight. Actual weight or volumetric weight, whichever is greater, is charged. As the name implies, real weight is determined by weighing in a weighing machine. The following formula is commonly used to compute volumetric weight:

Volumetric weight = ( Length x Breadth X Height  / 27000 ) x Factor.

Depending on the agreement, this number could range from 6 to 10. As a result, we’ll require the real weight and measurements of the shipments – Length, Breadth, and Height – to check if the weight on the bill is true. If there are many boxes, the actual weight and dimensions of each box must be known. Only if we have all of these facts for each shipment will we be able to properly verify whether or not the weight on the freight bill is right.

Typically, these details must be recorded before couriers are dispatched. The warehouse staff, on the other hand, does not measure weight and size in order to send orders on the same day and meet SLA. As a result, if there is a weight disparity, 3PL will be unable to defend. While irregular weights are discovered, a little rise in the number of KGs each shipment is frequently overlooked. If the weight discrepancy each docket is between 10 and 20 kg, it will cost Rs. 100 per docket. You will easily lose Rs. 1 lakh if you have 1000 dockets.

3PL should be able to capture the weight with minimal disruption to the dispatch process to fix this. Because the same product will be provided frequently, entering the actual weight and measurements into the system is simple. Furthermore, software may gather invoice facts and automatically determine real weight, volumetric weight, and chargeable weight.

Variable Fuel Surcharges

It is a surcharge levied by the courier to compensate the variable cost of fuel. It is frequently added to the shipper’s freight bill and is computed as a percentage of the base rate. The proportion of base rate fluctuates as a result of this, and this has a detrimental impact.

The original Fuel Surcharge in the agreement would be around 10%, but there will be a variable provision indicating that for every 3 Rupees increase in Diesel price, the surcharge will be increased by 1%, resulting in a surcharge of 13%.

Validator, for example, believes that the agreed-upon fuel cost is billed at 10% of freight. However, due to FSC’s variable Diesel increase linkage, courier invoices may have a 14 percent surcharge. We can’t verify this without knowing the initial FSC percentage, the Diesel price at the time the contract was signed, and the current Diesel rate. It’s significantly more difficult to do this every month and for each courier, and it’s commonly overlooked.

All of these headaches can be avoided if all of these data, such as the initial FSC percent, the Increment clause, and the original Diesel price, are sent into the system, and the software obtains the current Diesel rate and automatically determines the correct FSC percent to be calculated.

Additional Charges that Change Over Time

Additional fees are not charged to every docket. It’s also not particular to physical characteristics of the shipment, such as weight and size, and so isn’t represented transparently in agreement.

Outside Delivery Area (ODA)

When establishing a rate contract, couriers usually share ODA pincodes and associated costs. However, couriers change and exchange ODA pincodes on a regular basis, making validation impossible. After the shipment arrives at the destination hub, charges are sometimes approved over the phone or via email. We can’t entirely fault the courier because these are rural places where the courier lacks a branch and must rely on third-party delivery partners. These delivery partners charge dependent on how often their vehicles are used.

Appointment Delivery

Appointment delivery would be available at modern retailers such as Reliance, Walmart, and malls. First, double-check that the agreed-upon sum is in the contract, and then confirm that the location does, in fact, require appointment delivery.

Priority Delivery

There will be critical requirements from time to time, such as PO expiration for key customers, customer shop launch, new product launch, and so on. Couriers will follow TAT, but as a 3PL, you will recognize the importance and request a special vehicle delivery and agree on a price. This cost will most likely be communicated via phone or email, making verification impossible.

Miscellaneous Prices

Additional charges vary by courier; they may include green taxes for certain locations, holiday charges, development charges, metro charges, and other fees that may or may not be included in the contract. It’s possible that you’ll see it as hidden fees that you’ll miss while signing a contract. As a result, the validator will have no idea what these charges are.

All of these charges, as you can see, are highly dynamic in nature and are dependent on unpredictable events. As a result, consent is given on the spot rather than through a predetermined process involving several stakeholders. It will be difficult to validate if there is no means to capture this dynamic event.

Validating Dockets in Multiple Bills

In some cases, we may be required to validate across numerous courier invoices. Before we move any further, we must first comprehend courier billing cycles. The billing period is normally weekly or monthly, and the courier creates the fee either manually or mechanically at the end of the billing cycle. Shipments scheduled at the conclusion of a billing cycle may or may not be included in the billing period following that. Because of the high demand at the end of the month, the courier may enter the system early the next morning while dispatching on the 31st.

In other cases, the courier will not bill until after the delivery date since some additional charges, like as ODA, are not always clear. As a result, the following cases must be verified over many bills:

  • Duplicate Dockets – Has the docket been billed in both the prior and current bills?
  • Invalid Dockets – Is this a docket that we own?
  • Return Dockets – Were return dockets charged twice?
  • Missing Dockets – This is especially critical because it could result in a shipment being lost. In that case, the value of the debit will be substantially greater than the freight amount.

You might think that manually validating over numerous XL sheets is difficult after reading the above. Important to note that each courier has its unique method of billing, and as humans, we are prone to making mistakes, which can lead to undesirable complications. To eliminate this, courier bills should be entered into the system docket by docket. Then identifying the instances listed above will be as simple as pressing a button.


While Third Party Logistics (3PL) is always looking for ways to cut costs, freight bill payment is one area where a legitimate 10% savings may be made if done correctly. However, several stakeholders, such as the warehouse team, approvers, customer service team, and accounting team, are heavily reliant on information being saved.

Manually accomplishing this is not only difficult, but also prone to error, defeating the aim of cost savings. However, most of the problems may be readily remedied by using software to automate them. The good news is that all of this can be accomplished without significantly altering the current workflow.

How ShypVisor Can Help You?

We at ShypVisor, built a Cloud based Shipment Management Software (SaaS) exclusively for Third Party Logistics (3PL) service providers, Supply Chain Service providers, C&F, Distribution companies. Salient features include Client & Vendor Rate contract management, Bulk order import through XL or API, Multi Courier Tracking, Bulk POD download, Claim management, Raising Client Invoice, Vendor bill validation, WhatsApp notification, Customizable MIS templates and many more. The software automates processes that otherwise require huge time, efforts, and manpower resulting in huge cost savings. There is no huge upfront investment required for the software as you can pay only for what you use on a monthly subscription basis. Get in touch with our experts for a quick tour of our solutions.

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Top 5 Challenges For 3PL and SCM Companies Validating Courier Bills Manually

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