FAP Supports Internal and External Compliance

The global supply chain is dynamic by nature, but the last half-decade has been marked by major disruptions that have increased the complexities surrounding compliance. COVID-19 was a major catalyst, but many new regulations directly result from increased pressure – from both consumers and regulators – for more transparency and accountability.

Technology within the space has been rapidly evolving over the course of the past few years, aiding in the process of maintaining transparency and helping enterprises remain compliant while also reducing costs.

As the regulatory process becomes more complex, the need for additional tools, like a freight audit and payment solution, continues to grow. Through AI-powered technology, connecting and interpreting data simplifies the process, making it easier to meet or exceed national and state regulatory requirements, industrial standards, trade agreements, corporate policies, and more.

At Trax, we believe that technology plays a critical role in the constantly evolving compliance landscape. By leveraging data, organizations have access to real-time information, making it easier to remain compliant and grow their business.

Compliance Challenges

The global supply chain is both complex and complicated, especially for organizations that still rely on manpower to manage all of their processes. While each organization will have its own unique challenges, we’ve highlighted some of the most common challenges manufacturers currently face.

Lack of visibility

Despite swimming in an ocean of data, lack of visibility is one of the biggest challenges within supply chain management. For most organizations, the management process is mostly disjointed. Markets, vendors, and customer segments are siloed, resulting in a process that isn’t uniform across the organization. By nature, this approach leads to slower reaction times when regulations change due to multi-level data dependency.


It is easy to blame COVID-19 for the larger push in transparency within the supply chain, but both customers and regulators have been increasing pressure over the last decade. The continued push for more eco-friendly products and processes has directly impacted regulations. Supply chain laws are becoming more common, with enhanced requirements for companies that include production, distribution, waste management practices, etc.

Rapid pace of innovation

Innovation within the supply chain is generally viewed as positive, but it also directly impacts regulatory changes. Global manufacturing processes mean that organizations must remain compliant in an ever-changing environment or risk being audited or fined. As we will dive into a little later, FAP technology can evolve in real-time compared to a strategy that requires an increase in manpower.

Internal Compliance in Supply Chain Operations

When examining compliance, there are ultimately two sides of the coin – internal and external. We’ll start with internal, because centralized internal controls are the first step in addressing the constantly shifting external regulatory environment.

The Role Freight Audit Plays

Regardless of how an organization manages compliance, having an Internal Control Process, or ICP, is an essential component. ICPs aren’t a new concept within supply chain management, as most organizations have structured protocols and procedures to address regulatory compliance.

Generally, ICPs can be broken down into the following components:

  1. Organizational structure
  2. Transaction verification
  3. Distribution controls
  4. Audit
  5. Reporting and rectification
  6. Training
  7. Transaction reporting

Traditionally, independent teams within an organization have managed each of these steps. By splitting up the workload, efficiency improves. The introduction of a freight audit and payment system streamlines each component of the process and ties everything together through a single source of information. 

This can be particularly powerful for multinational organizations that have outsourced pieces of their process to brokers or other companies to help with compliance components. With an FAP in place, accurate data results in increased transparency, helping to reduce risk and lower operational costs.

At the end of the day, improving internal efficiencies will naturally make it easier for organizations to address external compliance demands and deficiencies. 

External Compliance in Supply Chain Operations

Over the past few years, external demands have significantly increased, and it is a trend that shows no sign of slowing anytime soon. Keeping up with the constantly fluctuating regulations requires tools that can constantly monitor and report changes that impact each piece of the supply chain.

The Role Freight Audit Plays

Traditional freight audit processes require a vast amount of time and resources. Additionally, it meant relying on multiple sources that may or may not provide incomplete information. As a result, compliance deficiencies were a constant challenge for supply chain companies.

Modern freight audit tools are designed to understand the various regulatory frameworks that impact the supply chain industry. From a risk management perspective, FAP tools can alert organizations in real-time when a compliance concern arises, allowing them to take corrective action immediately. 

The single source of information improves how companies can measure, track, and report, making it easier to prove compliance to inspectors and regulators.

Supply Chain Risk Management

The supply chain is a risk-intensive industry. The number of factors impacting the flow of goods is constantly changing, making it more difficult for organizations with a manual audit process to manage and mitigate risk.

Organizations are constantly managing challenges with suppliers, distributors, resellers, and other third parties, all of which have the potential to impact production and operation compliance.

It may be that your organization is already using a variety of cloud-based pieces of technology to help with supply chain management. If these pieces are not integrated into a single platform, it can create digital barriers that impact your ability to reduce risk. 

Centralized data leads to improved visibility, allowing companies to easily identify risks, including those surrounding compliance. Vendors or suppliers that pose a compliance risk can be pinpointed and replaced if necessary, preventing potential hiccups related to regulatory issues.

FAP With Trax for Compliance… and More

Whether you are looking to improve your internal controls or address external compliance concerns, freight audit and payment technology should be an essential part of your supply chain management strategy. FAP’s ability to simplify the complex compliance components that are hallmarks of the supply chain allows you to become substantially more efficient, keeping your operations flowing smoothly while also reducing operational costs.

Trax is a global leader in freight audit and payment processing. Our AI-powered software can help you streamline how you manage transportation spend, compliance, and more. Connect with our team to learn more about our solutions and see firsthand how a FAP system can impact your business’s bottom line.

Trax Technologies

Trax Technologies

Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.