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The term Ocean freight means the practice of shipping of different products via the sea route. One may have a need to obtain the special permission for shipping his products by the sea transport. The major factors which determine whether the person will need a special permission or not are the region or the country it is being shipped to and the amount and type of the product that is going to be shipped. The insurance policy of a carrier does not cover the damage or the loss that is encountered by it during the journey on the ocean. These freight companies, as the law states should have the licence of the Federal Maritime Commission. One should always verify the references of these companies. One should also make sure that the company explains all the terms and conditions of the shipping process in a manner which is non-technical so that the client gets a clear cut idea about all the transactions that he is going to make.
The recent years have seen the rise in the freight cost which is a rising area of great concern. The most important factor which has led to the rise of the Ocean freight rates is the rise in the prices of the oil. The transportation or the shipping cost is directly related to the rise and fall in the prices of the fall. The verification of the freight costs is vulnerable to the process and human errors with the great fluctuations in the prices of fuel and the high complexity of them. This requires the Freight audit so that none of the companies undergo an overpayment for the services that they did not incur. The task of manually calculating the freight rates is a very challenging task especially when the shipments are being done in hundreds of number every month. Some of the companies and organisations perform their Freight audit with their own manpower. On the other hand, the others hand them over to the concerned people who had specialised themselves in the process of audit.
The Freight bill auditing prevents both overpayment and also helps to adhere to the terms of the contract and they also identify the trends of the market. The process of self billing has been adopted by many of the companies. The freight rates are mostly maintained in the multiple spread sheets. At times, the company does the random check of the sampling to see if the billing has been done correctly. The manual efforts which are quite tedious in nature and the expenses that end up are huge in amount and they may be more expensive even than the vendor outsourcing. The freight costs are calculated by the customers themselves. The electronic data interchange is the process by which the bills are received. After the bills enter they are then audited. The auditors verify the mileage and the duplicate payments of the bill. The bills are generally paid after auditing. The payment company who pay the freight bills receive the freight bills of the client through the carriers.