Freight audit pillar

Ocean Freight Audit: A Plain-English Guide for Ocean & International Shippers

Published June 3, 2026

An ocean freight audit reads the steamship line's invoice against the service contract and the published tariff — not against itself. It catches the things AP never sees: surcharge stacking where the contract names only one, currency converted on the wrong day, terminal handling billed at the carrier's prevailing rate when the contract locks it, and demurrage that started before the consignee was notified. Median recovery: 3–7% of annual ocean spend — the highest error rate of any mode. Your first audit with Eller Audit is free.

What's actually on an ocean freight bill

An ocean invoice is the longest in freight. A single Forty-Foot Equivalent Unit (FEU) on a transpacific lane can carry a base linehaul rate of $1,800–$4,500 plus eight or more separately-billed surcharges, each computed from its own index, on its own schedule, and converted from its own currency. Each one is a place an error can hide.

• Linehaul (ocean freight). The base move charge, billed per container with the basis being a Twenty-Foot Equivalent Unit (TEU) or an FEU. This is what the service contract negotiates.
• Bunker Adjustment Factor (BAF). The fuel surcharge, typically 15–30% of linehaul cost. Tied to a bunker fuel index — most commonly Platts Bunkerwire low-sulfur fuel oil — updated monthly.
• Currency Adjustment Factor (CAF). A surcharge that offsets exchange-rate movement between the contract currency and the carrier's billing currency. Quoted as a percentage of linehaul.
• Low Sulphur Surcharge (LSS). A separate fuel-cleanliness charge tied to IMO 2020 sulfur rules. Some carriers fold LSS into BAF; some bill it separately. If both appear on the same invoice, read the contract before paying.
• Terminal Handling Charge (THC) origin and destination. Two separate line items, one per port, billed at the carrier's prevailing terminal rate unless the contract locks them.
• Documentation and processing fees. Bill of Lading (B/L) fee, telex release, switch B/L, manifest correction. Small per-event charges that accumulate.
• Automated Manifest System (AMS) and Importer Security Filing (ISF). US Customs-mandated filings billed by the carrier or forwarder per shipment. AMS roughly $25–$45; ISF roughly $35–$50.
• Drayage, origin and destination. The truck move between port and warehouse. Often billed by a sub-carrier the shipper never named.
• Detention & Demurrage (D&D). Per-day charges when a container sits beyond free time. Standard US ports: 4–5 free days, then $150–$400 per container per day.
• Peak season surcharge (PSS). Lane-specific seasonal premium, typically $200–$1,000 per container during a published peak window.
• Port congestion surcharge. Carrier-declared charges tied to specific ports during congestion events. The contract should specify when these are permitted.
• General Rate Increase (GRI). Periodic linehaul-rate adjustments published by the carrier. The contract should fix the GRI rule.

An ocean audit reads each of these against three documents: the service contract on file with the FMC under 46 USC 40502, the carrier's currently-effective tariff, and the terminal arrival log that establishes when free time started and ended. Missing any one of the three, you can't tell whether the bill is right.

Where ocean bills go wrong — the six common failure modes

After reviewing several hundred ocean service contracts, the same six failure modes account for most of the recoverable overcharges. None of them are exotic. Each appears on routine bills, on routine lanes, from every major carrier.

• Surcharge stacking. The contract names BAF as the fuel mechanism. The bill carries BAF plus LSS plus a separately-named “fuel recovery” line. Stacking adds 4–9% to linehaul that the contract never authorized.
• THC billed at the prevailing tariff. The contract locks THC at a contracted rate per container. The carrier bills the tariff-published rate, which can be $40–$120 higher per container. On 5,000 FEUs a year, the variance can run $200K–$600K alone.
• Currency conversion at the wrong FX rate or the wrong day. The contract specifies a source (typically the OANDA mid-market rate or a named bank rate) and a day (typically B/L date). The bill uses the carrier's internal rate on the invoice date, which lags by days and adds 1–3% to USD-equivalent total.
• Demurrage started before consignee notification. Under 46 USC 41102 and the 2022 Ocean Shipping Reform Act (OSRA-22), the free-time clock cannot start until the consignee receives notice the container is available. Carriers routinely start the clock at vessel discharge regardless of when (or whether) notice went out.
• Peak season surcharge applied outside the contracted peak window. The contract defines peak season as a specific date range. The bill shows PSS on a container that loaded before the window opened or after it closed.
• Drayage from a sub-carrier the shipper didn't approve. The bill carries a drayage line at a rate the shipper never agreed to, performed by a trucker the shipper never named. The contract should specify whether the steamship line, the shipper, or a third-party logistics provider arranges the truck leg.

Worked example: mid-market importer, $355K–$795K recoverable per year on $28M ocean spend

A US mid-market importer moves 12,500 TEUs per year through East and West Coast ports under a multi-lane service contract with two steamship lines. Annual ocean spend: $28M.

Surcharge stacking exposure: BAF/CAF/LSS double-billing and unauthorized fuel-recovery lines affect roughly 6–9% of containers at an average $55 per-container overcharge. That is $185K–$385K of disputable surcharge stacking per year. Recovery rate 65–80% with contract + tariff side-by-side — $120K–$305K recovered per year.

Demurrage exposure: 12,500 TEUs × 1.5-day average detention × $225/day blended rate = $4.2M of D&D billing. Of that, 6–11% is disputable on notification-timing, port-congestion, or force-majeure grounds under OSRA-22 — $245K–$465K disputable per year. Recovery rate 55–70% with terminal-side timestamps — $135K–$325K recovered per year.

THC variance exposure: the contract locks THC at $235 per FEU; the carrier intermittently bills at the tariff rate of $295–$315. The variance affects 4–7% of containers at $60–$80 each — $95K–$185K disputable per year. Recovery rate 80–90% — one of the cleanest categories to dispute — $76K–$165K recovered per year.

FX and currency exposure: CAF math errors and wrong-day FX conversion affect roughly 25–35% of containers, but at a small per-container variance — on average $11 each. That is $40K–$95K disputable per year. Recovery rate 60–75% — $24K–$70K recovered per year.

Total combined annual recovery on a $28M ocean program at this scale: $355K to $795K per year — 1.3% to 2.8% of total ocean spend, before counting unrecovered findings that take more than one cycle to win. For Fortune 500 ocean programs spending $150M+ per year and moving 50,000+ TEUs, recoverable ocean audit findings routinely run $4M–$9M per year.

How ocean audit differs from rail and truckload

The audit principles are the same across modes — read what the contract says, compare it to what was billed, dispute the gap — but ocean has its own documents, statutes, and dispute windows. The most important difference: the regulator is the Federal Maritime Commission (FMC), not the Surface Transportation Board (STB) or the Federal Motor Carrier Safety Administration (FMCSA).

What your ocean service contract should say — four clauses that earn their keep

After reviewing several hundred ocean service contracts, four clause patterns matter more than any other. They are the lines we read first every time a new contract lands.

Surcharge lock clause (no stacking). “The Carrier shall apply only the Bunker Adjustment Factor (BAF) as the fuel surcharge mechanism for all shipments tendered under this Agreement. No Low Sulphur Surcharge, Emergency Bunker Surcharge, fuel recovery charge, or other fuel-related surcharge shall be billed in addition to or in substitution for BAF without thirty (30) days written notice and Shipper's written acceptance.” Without this, the carrier can layer LSS and EBS on top of BAF and call it standard practice.

Terminal Handling Charge rate lock. “Origin and destination Terminal Handling Charges (THC) shall be billed at the rates set forth in Schedule A of this Agreement for the term of this Agreement. Any change to THC during the contract term requires sixty (60) days written notice and shall not apply to shipments booked prior to the effective date.” THC drifts upward on the published tariff constantly. The lock holds your contract rate.

Demurrage constructive-placement and notification clause. “Free time for demurrage and detention shall not commence until Carrier has provided written notice to Consignee of container availability for pickup at the destination terminal, by EDI 315 or equivalent electronic message, with timestamp of notification serving as the start of free time. Free time shall be tolled during any period of terminal closure, port congestion declared by the carrier, or any other event not attributable to Consignee.” This is the difference between a winnable D&D dispute and an unwinnable one under OSRA-22.

Currency conversion rate-source clause. “Where invoiced charges are denominated in a currency other than United States Dollars, conversion to USD shall be computed using the OANDA mid-market exchange rate effective on the Bill of Lading date for each shipment. Carrier's internal exchange rate shall not apply.” This single clause closes the FX-conversion exposure entirely. Without it, you pay whatever rate the carrier's billing system used on the day the invoice posted.

What we can't tell from the bill alone

Ocean audits run into more ambiguity than rail or truckload. The service contract is confidential between shipper and carrier under 46 USC 40502, the tariff is public but changes constantly, and the bill itself frequently omits the references that would let you reconcile the two. A bill that looks wrong against the tariff may be exactly right against the contract, and vice versa. Reading them as a single document, not two, is the audit's job — and you need the terminal arrival log to close the third side.

A line item that reads “DEM CHG — $1,425.00” with no free-time-start timestamp, no notification record, and no terminal closure log is not enough to dispute and not enough to approve. The bill is the question, not the answer. The answer lives in the EDI 315 container-availability message, the terminal's gate-in / gate-out record, the carrier's published demurrage tariff, and the contract's tolling provisions — assembled together.

Ocean is also the mode where bills arrive latest. A container moves in March, the linehaul invoice posts in April, the destination THC adjusts in May, the drayage invoice arrives in June from a separate vendor, and the demurrage credit memo (if you dispute and win) lands in August. The audit has to reconcile all five against the same shipment, not against each other. That kind of cross-period reconciliation is invisible to AP and obvious to an audit running against the service contract.

How Eller Audit handles ocean

We maintain a current tariff library for every major steamship line calling US ports, paired with the FMC-registered service contract for each shipper. Every invoice is parsed against contract + tariff + the terminal arrival log, and any line with a variance over $25 is reviewed by a human auditor with all three documents in hand. When a line is disputable, we draft the claim citing service contract, controlling tariff, and statute (46 USC 41102 for the overcharge claim, OSRA-22 for detention and demurrage), file it through the carrier's claims portal or directly to the FMC where appropriate, and recover the overage. The engagement is performance-based: you pay a share of what we recover, and nothing on the lines that hold up.

Frequently asked questions

Related reading