In the world of logistics, freight bills serve as the backbone of financial transactions. A freight bill, also known as a freight invoice, is a commercial document issued by a carrier to a shipper or consignee, to collect payment for the transportation of cargo.
These documents outline the charges incurred for transporting goods and also include vital shipping information. In some cases, the sender (shipper or exporter) bears the cost and in others, the recipient (consignee or importer) is responsible for payment.
This article will cover all there is to know about freight bills, what charges it typically contains, and the difference between freight bills, freight invoices, and bills of lading. So, without further ado, let’s begin!
What Information Is Found on a Freight Bill?
Freight invoices may differ among carriers, but there are crucial elements that every freight invoice should have. These include the following:
A freight bill is essentially an invoice and therefore is assigned a specific numerical code called the invoice number. This code is often used as a reference number.
Invoice Issue Date
This is the date on which the freight bill was generated.
Invoice Due Date
This is the date the invoice must be settled before or on. If the freight bill is not paid by the due date, the shipper or consignee may be charged late fees.
Carriers utilize a specific number to arrange and monitor the transportation of freight shipments. This number is commonly known as a “progressive number” or PRO number, which merges the carrier’s Standard Carrier Alpha Code (SCAC) with a barcode or tracking number.
Transport Document Number
This number is used to identify the transportation documents with what the transportation provider has in their system. This is typically the bill of lading, sea waybill, rail waybill, air waybill, or any other transport document number.
Mode of Transport
This refers to the mode of transportation employed, which may include ocean, air, or land (road/rail).
This includes the contact details of the transportation provider, such as the shipper’s name, address, and business registration number.
This includes the contact details of the individual or company to whom the cargo is being shipped, such as name, address, and company registration number.
The details of the cargo being shipped by the transportation provider to the consignee. The details describe the cargo in terms of quantity, weight, and value.
Flight, Vessel, or Truck Details
This includes the details of the mode of transportation being used to transport cargo. For example the vessel name and voyage number of a sea freight shipment or the license plate number of the truck.
Container Details (If Applicable)
This includes the details of the intermodal shipping container (for land or sea freight), which is typically indicated by the container number and seal number.
These are the terms of payment (credit terms) that are agreed upon between the transportation provider and the consignee (for example Net-60).
Terms & Conditions
Any additional terms and conditions between the invoiced party and the carriers are indicated in this section. This could be special handling requirements, additional payment details, and other information.
What Charges Do Freight Bills Typically Contain?
Have you ever wondered about the different fees and charges included in a freight bill? A freight bill can contain various types of charges, depending on the type of transportation and value-added services that were rendered. We’ve explained some of the more common charges below:
Freight charges are the costs associated with the transportation of goods from one location to another. These charges can include the cost of transporting the goods by different modes of transport such as trucking, air freight, and others.
However, these charges can vary depending on the type of goods being transported, the distance of transportation, and the mode of transport used.
Lumper fees are an important aspect of cargo transportation, as these fees are charged for loading and unloading services provided by a trucking company. These fees are not included in the standard shipping rates and are charged separately to ensure the cargo is properly handled.
The lumper fees are typically the responsibility of the consignee or shipper, and they can range in amount depending on various factors such as the weight of the cargo, the type of service required, and the region where the service is being provided.
Pallet fees refer to the charges that are incurred while purchasing, renting, exchanging, repairing, or storing pallets. These fees can vary depending on the type of pallets being used and the services being provided.
One of the most critical aspects of international shipping is ensuring that the goods being transported are free from pests and insects. Fumigation is often necessary to achieve this, and fumigation fees are an essential part of the overall shipping costs.
These fees are charged to cover the cost of the chemicals used, as well as the labor required to carry out the fumigation process. Fumigation fees may vary depending on the shipment size, the type of goods being transported, and the regulations in place in the countries of origin and destination.
Detention & Demurrage Fees
Detention and demurrage fees are charged for utilizing containers beyond the free time period. There are also truck and trailer detention fees, which are typically charged when loading or unloading activities exceeding two hours.
Storage charges can occur when your shipment is held at a port or terminal due to customs clearance, documentation issues, or other reasons beyond your control.
International shipments may be subject to additional fees, including customs and duty fees. Certain types of cargo may be taxed, which the carrier has outlaid on your behalf, which is reflected in the freight bill.
Currency conversion fees on an invoice refer to the charges incurred when converting the total amount of the invoice from one currency to another. These fees arise when certain charges are in two or more currencies.
When it comes to cargo transportation, businesses need to be aware of the additional charges (also known as accessorial charges) that may arise. These charges can include admin fees, handling fees, and other surcharges.
Who Issues a Freight Bill & Who Pays for It?
When it comes to logistics management, it’s important to understand the basics of freight bills and their role in the transportation industry. One key point to note is that the party providing the transportation issues the freight bill.
This includes carriers such as trucking companies, shipping lines, freight forwarders, and airlines. On the other hand, the party that engages the transport company, typically the shipper or consignee, typically pays for the freight bill.
This payment is typically settled in cash, check, bank transfers, or other forms of electronic payment, making the entire process quick, seamless, and transparent.
What’s the Difference Between a Freight Bill and a Bill of Lading?
Understanding the difference between a freight bill and a bill of lading is crucial in logistics. While both documents play an important role, they serve different purposes.
A freight bill is a commercial document generated by the carrier or freight forwarder to provide a detailed description of the transportation details, billing amount, and any payment terms involved.
This document serves as an invoice and is used to facilitate payment for the transportation services rendered. On the other hand, a bill of lading is a legally binding document that is issued by the carrier.
It serves as a contract of carriage and provides detailed information about the cargo being transported, such as the ports of discharge and destination, voyage number, and more.
This document forms the basis of the transportation contract between the shipper and the carrier and ensures that the cargo is transported according to the agreed freight terms and all other underlying details.
What’s the Difference Between a Freight Bill and a Freight Invoice?
In the logistics industry, using the terms freight bill and freight invoice interchangeably is common. Both of these terms refer to a commercial document that outlines the charges for shipping goods from one location to another.
It is worth noting that these documents may also be referred to as shipping invoices or carrier invoices. Essentially, a freight bill or invoice records the transaction between the shipper and the carrier.
This document includes important information such as the shipper’s and receiver’s names and addresses, the shipment’s weight and dimensions, the mode of transportation, and the charges associated with the shipment.
Co-Founder & Writer
About the Author
Gerrit is a certified international supply chain management professional with 15 years of industry experience, having worked for one of the largest global freight forwarders.
As the co-founder of freightcourse, he’s committed to his passion for serving as a source of education and information on various supply chain topics.