Paying By the Line

Paying By the Line

What could go wrong in paying for the shipment of a single ocean container?

Plenty, according to Stuart Tarmy, INTTRA’s senior director of electronic invoice presentment and payment. A single 20-foot container that was recently shipped from the Port of Rotterdam in the Netherlands to the Port of Casablanca in Morocco, containing miscellaneous manufactured articles, included 10 line items on the accompanying invoice. Each is potentially the source of a freight payment dispute.

The invoice was for $7,786. With a value-added tax of $425, the total cost of the shipment was $8,211.

The first line item was the basic freight rate charge, which can be subject to dispute if rates change while the shipment is in transit. There was a bunker surcharge, the added payment that floats with the fluctuating price of fuel. There was an empty equipment imbalance and handover charge; an ocean carrier international ship and port facility charge; a port security surcharge; a documentation fee, including bill of lading charges; a handling charge; a port passage charge; a tax charge; a separate VAT charge and exchange rate charges.

The shipment could have contained even more potential errors because ocean shipments can have as many as 15 line items, Tarmy said.

In addition to line items, potential sources of disputes include complex pricing structures arising from customized contracts and unanticipated charges such as detention and demurrage, and even fumigation fees if container contents are spilled.

On the domestic trucking side, the amount of data that has to be captured has greatly increased, said Larry Watts, vice president of freight operations for CTSI. Data from line item invoices is critical for data mining for savings, and each line item is potentially subject to dispute.

Contact David Biederman at inexdb@comcast.net.