🇺🇸United States

Unrecovered Premium Freight Not Charged Back to Customers or Suppliers

3 verified sources

Definition

Premium freight is often incurred to protect OEM production but not consistently billed back when contracts allow, leading to silent revenue leakage. Quality and logistics forums stress the importance of tracking and documenting premium freight charges and investigating root causes to determine who should bear the cost, implying that without robust tracking many of these charges remain unallocated and unbilled.[5]

Key Findings

  • Financial Impact: $250K–$1M per year in unrecovered premium freight for a tier‑1 with multiple OEM programs (10–30% of premium shipments theoretically billable but not invoiced)
  • Frequency: Weekly
  • Root Cause: Premium freight is booked under time pressure and coded generically in ERP, with limited linkage to customer contracts, supplier charge‑back terms, or specific delivery failures. The lack of a structured repository tying each premium shipment to responsible party and reason code means finance cannot systematically invoice OEMs for customer‑caused expedites or charge back non‑performing suppliers.[1][5][7]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Motor Vehicle Parts Manufacturing.

Affected Stakeholders

Finance controllers, Accounts receivable teams, Supplier quality managers, Key account managers, Logistics managers

Deep Analysis (Premium)

Financial Impact

$250K–$1M per year in silent revenue leakage from unbilled premium freight. • $250K–$1M per year in unrecovered premium freight (10–30% of shipments billable but not invoiced) • $250K–$1M per year in unrecovered premium freight across multiple programs

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Current Workarounds

Excel logs and email chains to track premium freight, with manual review for chargeback eligibility. • Manual tracking in Excel spreadsheets or shared documents to log charges, with ad-hoc emails for billing attempts. • Manual tracking in Excel spreadsheets shared via email or WhatsApp to document and attempt chargebacks.

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Uncontrolled Premium Freight Driving 25–30% Excess Logistics Spend

$2M–$5M per year for a typical tier‑1 parts manufacturer (based on case studies showing 25% savings on multi‑million‑dollar premium freight spend)

Non‑Optimal Mode/Source/Carrier Choices Hidden in Premium Freight

$500K–$3M per year in avoidable premium deltas for mid‑to‑large manufacturers (portion of total premium freight that is purely due to sub‑optimal decisions rather than true emergencies)

Chronic Fire‑Fighting With Premium Freight Consumes Logistics Capacity

Equivalent of 1–3 FTEs per plant in lost productive time plus opportunity cost of not optimizing base freight (often $200K–$600K per plant per year)

Slow Freight Accounting and Disputed Premium Invoices Delay Cash

$100K–$500K in working‑capital impact from extended DSO on disputed freight invoices for a mid‑size manufacturer

Premium Freight Triggered by Quality Escapes and Rework

$200K–$1M per year in incremental premium freight directly attributable to quality issues for a supplier with chronic escapes or handling damage

Freight Charge Discrepancies and Potential Abuse in Premium Shipments

$50K–$300K per year in overcharges and gray‑area abuse for a network with heavy premium freight usage

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