Your Shipping Invoice Explained

Shipping invoices are great tools for tracking how and where you spend your money. Even better, you can use the information to improve your profit margin - if only you knew what it all meant. You've been meaning to better understand your invoices, but when they come at the same time your inventory arrives or when orders need filling, it's often faster to pay the invoice now and learn later. To help you make sense of your parcel and freight invoices, we've answered frequently asked questions from small businesses. You can use these explanations to gain insight into the effectiveness of your shipping strategy.

Basic details for understanding your shipping invoice

What information is included in a freight invoice?

A standard freight invoice acts as a legal record, including names of consignor and consignee, date of LTL or FTL shipment, origin and destination points, number of packages, and a description of the freight. It will also provide details about the goods being shipped, including their common name and what it's made of, their weight and dimensions.

The description section of your invoice can include other pertinent information, such as specialty features required for the shipment and any assessed fees or surcharges.

What information is included in a parcel invoice?

Delivering your parcel and freight shipments

What is a service level?

What is a zone?

In small package shipping, zones are the geographical areas a shipment travels through to reach its destination. Each carrier assigns its own zones based on distance between ZIP codes and uses those zones as one element when calculating rates: the lower the zone, the shorter the distance and the lower the rate. A shipment with a closer destination (Zone 1 to Zone 2) will have a lower rate than a shipment traveling farther (Zone 1 to Zone 5). To avoid the higher shipping rates of the more distant zones, some businesses establish multiple fulfillment centers that are strategically located in or near their most common destinations.

What is a fuel surcharge and why can it vary between shipments?

What is a single-shipment fee?

Carriers' goals are to fill their trucks in the most efficient ways possible. While valuable to filling cargo capacity, pickups that contain only one pallet or handling unit are more expensive to handle - in effect, adding an additional stop increases the truck's overall cost for usage. For these smaller shipments, carriers often add a single-shipment fee to account for the extra effort (including time and fuel) required to complete the delivery.

What is a multi-lot shipment?

What is a delivery area surcharge?

What is a residential surcharge?

Why accurate shipment weight and dimensions matter

What qualifies as additional handling?

What does it mean when my invoice indicates the carrier audited a parcel shipment?

What is an inspection charge?

What is a reclassification fee?

Less-than-truckload (LTL) freight rates are determined by several factors, one of which is its classification code (see National Motor Freight Classification). Every LTL freight shipment has a classification code based on its weight, dimensions, ease of handling and stowability. If as shipment's classification is incorrect (e.g., the freight weighs more than reported), then the shipment will have to be reclassified. You'll be charged both for the reclassification process and for the higher shipping rate. To avoid these extra costs, make sure to accurately weigh and measure your LTL freight shipment and report the correct information on your bill of lading.

Help protect the value of your freight and parcel shipments

What is a "high cost" surcharge?

What is declared value?

For small package shipments, the declared value of a shipment is the monetary portion the carrier is liable for in case of its loss, delay or damage. It is not equal to the full retail value of the goods being shipped. If the goods are valued at more than $100, you can increase the declared value of your shipment by indicating a higher amount in the shipping document and paying an additional charge or consider adding shipping insurance.

Get your shipping invoices in one place

Now that you have a better understanding of how to read your invoice, use what you've learned to build a better shipping strategy. But that can be easier said than done - especially when you're working with several carriers and multiple parcel and freight documents. Each carrier's invoice comes on different dates with different billing cycles and different formats. Making comparisons between shipping documents can be like trying to complete a jigsaw puzzle with missing pieces.

When you work with a third-party logistics (3PL) company, the puzzle is already put together. You get one consolidated invoice of all your carriers, making for easy comparisons.

At Worldwide Express, we take it even further. Your shipping expert will show you how to leverage the information in your invoice, perhaps by conducting a freight audit, to your advantage and help you create a shipping strategy that's more effective for your bottom line. See how we can help

Your Shipping Invoice Explained

Basic details for understanding your shipping invoice

What information is included in a freight invoice?

What information is included in a parcel invoice?