subject: The Strangely Complex Job Of A Freight Auditor [print this page] To audit is in and of itself a rather straightforward task. One need only to examine records, check for accuracy and inaccuracies, make necessary adjustments and verify the final results. Given a finite set of facts, objects, numbers and records, to successfully make an audit should not prove radically difficult or insurmountable. It should be a concrete task based on static elements. Yet the job of a freight auditor is no such thing. Such an auditor deals in a series of profound uncertainties, changing facts, unfounded projections and numerous factors influenced by anything from global politics to international weather patterns.
What exactly makes a freight auditor's job so complex?
Though determining freight rate is at its simplest a calculation of amount against distance (how much coal over how many miles, for example), in today's world any such determination of final cost is strictly beholden to oil prices. Since freight is inherently about transport, and the primary force driving transport is the combustion engine, it is intrinsically tied to the cost of that commodity that powers these engines. Were the price of oil to be fixed and unchanging, this would lead to no further complications, but that is not the case. Oil prices are constantly changing.
Of course, there are calculations that can account for changing factors, and methods to account for differences over time. But oil prices are not increasing or decreasing at a fixed rate of change, either. Rather, the spikes and falls can be rather erratic. And freight rate calculations are often made well in advance of shipment, since the cost is so high, and as such calculations can be wildly in error, and carry a heavy financial burden when mismanaged. As such, the job of a freight rate auditor is directly affected by those factors which influence the price of oil. And what factors influence the effect of oil? At the basest level, it's supply and demand like any other product, but politically charged international regulatory bodies, complex economic investments in oil futures (promises to buy at predicted rates), geographic disturbances, and changing diplomatic relationships between nations with control of reserves, all can have enormous impact on the price of oil, and ultimately transportation and the resultant freight rates.
As such, the job of a freight auditor is wrapped up not just in concrete numbers and facts, but also in the massive worldwide network of connections between local consumer choices, governmental decisions and the natural environment. When a freight auditor checks the freight rates, the whole world is taken into account.
by: Mark Etinger
welcome to Insurances.net (https://www.insurances.net)
