As it grew from $300 million to $900 million in revenue, and as its list of suppliers in Asia and Latin America were increasing and constantly changing, apparel and fragrance manufacturer Perry Ellis International began to feel the strain of trying to manually audit its freight bills. The company was not able to thoroughly analyze the growing numbers of bills and complex carrier contracts, despite hiring a third party auditor, and it realized that significant over-charges were falling through the cracks and were not being identified.

"Our contracts are complicated and contain various charges and tariffs," said Marvin Leto, VP of corporate logistics at Perry Ellis. "We were receiving freight bills and we couldn't be sure that we were being billed accurately." The result was the loss of thousands of dollars per month in carrier overcharges, which was only going to get worse as the company grew further.

Determining that it did not have the manpower and the time to conduct quality audits, the company decided to automate.

It turned to a freight-audit software solution that would enable the company to quickly identify and correct freight overcharges. It adopted the International Transportation Management solution from Management Dynamics in an effort to streamline freight auditing, calculate its bottom line freight costs and improve carrier selection.

As bills of lading are received, the freight audit software does a rate search of each shipment to verify that the proper version of the carrier contract is used, along with any contract amendments. Over-charges are identified and can be resolved with the carrier. "We are now able to audit freight bills as we receive them," Leto said "We can correct mistakes and over-charges in bills before making payments to the carriers. We now know, line-for-line, what we should be paying on each bill of lading, which gives us better control over our bottom line and our carrier relationships," he added.

Leto said the company has been able to identify and resolve about $300,000 in bill-of-lading over-charges, including $220,000 with one carrier alone. Moreover, with the auditing system in place, the company can now audit 100% of its bills, unlike in the past when it could only get to a much smaller percentage.

Leto added that Perry Ellis has not only improved its auditing capabilities, but has helped improve the billing process at its carriers. He said now that carriers are aware that Perry Ellis is pre-auditing freight bills line-by-line, they are more careful when drawing up those bills, because any errors will be identified.

In addition to freight-auditing capabilities, Perry Ellis has improved its routing capabilities by utilizing the transportation management solution to calculate shipment costs and compare multiple routing and service options from ports around the world. Using a search-engine tool, Perry Ellis' logistics team can search across multiple service contracts and identify potential routes and service options based on various criteria, including price. By viewing side-by-side comparisons across multiple carriers, "we can make more informed carrier selections," Leto noted.

Leto added that by optimizing carrier selection, Perry Ellis is able to facilitate its supply chain and speed up the flow of goods to market. In addition, the ability to avoid delays caused by inaccurate billing enables the company to accelerate the transportation and delivery process, thus helping it meet the delivery requirements of its retail customers.

As supply chains become longer and more complex, carrier contracts will naturally become more complicated. Leto said this should prompt companies to consider automation. "There are too many companies doing things manually, because they are comfortable in their current processes and are resistant to change. But, in today's economy, unless you are able to automate the transportation function and speed goods to market, you are not going to be around long."