Logistics is like an orchestra: Every element in a logistics chain plays its part in achieving the ultimate goal. And that goal is delivering volumes to their destination.
Between the origin and the destination, a lot of professionals handle a lot of documents. When was the last time you received a package at your house? Did you notice that it came with an invoice? Well, that's not the only invoice there is in a logistics chain.
What Is a Carrier Invoice?
Shippers—or carrier's clients—dispatch cargo with vehicles from their own fleet or a carrier's. If the shipper relies on a carrier, then the carrier must issue an invoice to the shipper. That's the carrier invoice. Other names for carrier invoice are "freight invoice" and "freight bill." Sometimes, carriers issue those invoices directly to buyers.
This post will walk you through the carrier invoice—what its fields are and where to find templates you can use.
Who Uses a Carrier Invoice?
A carrier is a transportation service provider. Therefore, it must charge its clients—shippers—for that service by sending a carrier invoice. To clarify, a shipper may be a...
Any of those clients can order a freight shipment to a carrier. The process goes like this:
- A client issues and sends a freight order to the carrier.
- Once that order is complete according to its transportation requirements, the carrier sends the carrier invoice to its client.
Likewise, a transportation management system (TMS) or any software application that manages logistics document workflows may allow...
- A shipper to order freight shipments to carriers
- A carrier to receive freight orders
- A carrier to send carrier invoices to its client
- A shipper to receive carrier invoices
Some companies have made their TMS system entirely digital.
Next, let's go deeper into the structure of a carrier invoice.
What Fields Does a Carrier Invoice Contain?
A carrier invoice contains many fields. Don't forget that the carrier is the one issuing this invoice.
This is the carrier's client—or shipper—which this post defined earlier. This means that the client will receive the carrier invoice.
This one is obvious—it's the carrier's name!
Although obvious, there's one crucial thing about the invoice number: It must be unique! Usually, the software system you use automatically generates this number.
A carrier may transport cargo by air, land, sea, or rail. The transportation mode identifies one of those means. Usually, the transportation mode is a code.
A tracking number is a unique number that a package gets before shipping.
This is the number of the account that a shipper has in a carrier's billing system. The carrier issues the number and assigns it to a single shipper. The account contains information on payments issued to the shipper.
The carrier identifies the shipper in the carrier's billing system with this number, which is unique.
The freight terms refer to the shipment's payment terms. For instance, those terms are in the bill of lading (BOL).
Incoterms stands for International Commerce Terms. The International Chamber of Commerce (ICC) developed the 11 rules that make up the Incoterms. And the Incoterms define the responsibilities of sellers and buyers in the international sale of products. Each rule outlines the tasks, costs, and risks of sellers and buyers in those transactions. Seven rules target any transportation mode—generally, air, land, sea, or rail—and four rules focus on sea, land, or inland waterway transport.
For example, the Incoterm CIP (carriage and insurance paid to) means that the seller delivers the cargo to a carrier at an agreed location. The seller is responsible for paying the freight and insurance charges. The risk of damage or loss of cargo is the buyer's since the carrier receives the cargo for transport.
This is a set of fields containing information about the vehicle used to carry cargo. Let's assume it's a truck. Information about the truck comprises its type (truck), its number, and, if applicable, its name.
This is the number of the route that the vehicle will follow for the shipment. Besides optimizing routes, a TMS may generate route numbers for you.
- Ship date: the date the shipment occurred
- Carrier invoice date: the date the carrier issued the invoice
- Delivery date: the date the carrier delivered the order to the destination
This field refers to the currency in which the shipper must pay the invoice—dollars, euros, and so forth.
Information on Origin and Destination
For both the origin and the destination, the following information must be in the carrier invoice:
- Address: street number and name of the origin and destination. It's common to find a second address field to specify additional information, such as a suite number.
- ZIP Code
- Type of unit, such as pallet or barrel
- Quantity: number of units to pick up or drop off
- Weight of the cargo to pick up or drop off. Sometimes, the weight is an estimation based on the length, width, and height of a package. The units of measure for weight—such as pounds or kilograms—must be specified.
- Volume of the cargo to pick up or drop off. The units of measure for volume—such as cubic feet or cubic meters—must be specified.
For instance, when the carrier is picking up or dropping off equipment in well sites, the carrier invoice contains latitudes and longitudes. That's because no physical address exists for those places.
In the case of a multistop route, the carrier invoice must contain information on each stop.
When the transportation mode is either air or sea, the information on the origin or destination is a little bit different. It also includes these fields:
- Location ID: standard identifier for the port or airport terminal worldwide
- Location name: the port or terminal name
For ports, the additional fields are:
- Container type, such as dry storage container or tank
- Quantity of containers
- Container numbers
The commodity code refers to product numbers in the Harmonized Commodity Description and Coding System. Carriers classify products internationally with these six-digit numbers. For example, 090210 indicates that the product is green tea. Most countries around the world have adopted the Harmonized System.
Freight Class Code
The National Motor Freight Traffic Association (NMFTA) has defined freight classes in an effort to standardize freight pricing across different carriers. In the United States, each type of product has a freight class. For instance, freight class 70 designates car accessories and car parts, food items, and automobile engines weighing 15 to 22.5 pounds per cubic foot. Carriers base the prices they charge shippers on the National Motor Freight Classification (NMFC).
Freight Charge Code
You already know what a transportation mode is, right? So, carriers don't charge solely based on the transportation mode and the number of units they transport. For example, in sea freights, carriers apply a surcharge to cargo that goes through the Panama Canal. And for that surcharge, the carrier defines a code that goes in the carrier invoice—the freight charge code.
Freight Rate Qualifier
The freight rate qualifier determines the way to interpret the rate value. In the United States, carriers typically use Electronic Data Interchange (EDI) codes, such as FL (flat-rate), as freight rate qualifiers. Other examples of rate qualifiers determine that the rate value is hourly or for a fixed cost per mile.
Freight Rate Value
This is the rate that the carrier applies to the freight shipment depending on the rate qualifier. For instance, $2 per mile is a rate value for the fixed cost per mile rate qualifier.
This is another obvious field! It's the amount that the carrier charges the shipper for the freight shipment.
Now let's look at some other fields—some common on carrier invoices, others less so.
Examples of Other Fields You May Find in a Carrier Invoice
- Payment method, such as check, cash on delivery, or prepaid.
- VAT amount.
- Purchase order number. This identifies the order of products from a buyer to a supplier, manufacturer, or producer and originates the transportation of those products.
- BOL number. A BOL is a shipper's list containing, among other information, the number of units they're dispatching and their weight.
- Billing address.
Where Can You Find Carrier Invoice Templates?
You can search for carrier invoice templates online. Editable templates are better. Here's an example of a website where you can find editable carrier invoices: FreshBooks.com. InvoicingTemplate.com also offers one, as do PDFfiller and InvoiceTemplates.com.
Then, you may combine information from different templates you find to build your own. Or you may complete a template you find appropriate to build your own from. Beware of the legal requirements for carrier invoices in your country.
This post was written by Sofia Azevedo. Sofia has most recently taught college-level courses in IT, ICT, information systems, and computer engineering. She is fond of software development methods and processes. She started her career at Philips Research Europe and Nokia Siemens Networks as a software engineer. Sofia has also been a product owner, working in the development of software for domains such as telecom, marketing, and logistics.