What happens between the dollar and the euro on your invoice

A logistics invoice can be checked line by line. Freight, fuel surcharge, terminal charge, documentation fee — every line has an amount, and every one of them can be compared with the quote.

The currency margin does not appear in that check. Not because it is small, but because it is not a line at all. It is built into the rate at which every other line was converted.

The calculation

You need three things, and all three are on the invoice: the amount in the foreign currency, the amount in euros and the date.

Divide the foreign-currency amount by the euro amount. That gives you the rate that was actually applied.

Example: an invoice of 12,400 USD, charged as 11,587 EUR. 12,400 / 11,587 = 1.0702. That is the rate you were given.

Then find the European Central Bank reference rate for that day. It is published publicly and free of charge, with history. Say it was 1.0865 that day.

At the reference rate, 12,400 USD would have been 11,413 EUR. You were charged 11,587 EUR. The difference is 174 EUR, which is about 1.5%.

What that number means

First — what it does not mean. It does not mean that anyone acted dishonestly. The ECB reference rate is not the rate at which banks trade, and nobody can convert currency with no margin at all. A certain margin is normal and unavoidable.

The question is how much, and whether your contract provides for it.

Where it breaks

Most carriage and freight forwarding contracts contain no exchange-rate provision at all. That means the rate is set by whichever party issues the invoice, and there is no breach in it.

Some contracts do contain a provision allowing the carrier to apply its own rate. The same outcome, only written down.

And some contracts name the source of the rate — usually the ECB rate on the invoice date. Only in that case is the difference a breach of contract, and only in that case can you claim it.

So the first step is not the calculation, it is opening the contract. If there is no provision, the calculation is still worth doing — but its result is not a claim, it is information on what the absence of that provision costs you.

What it comes to over a year

On a single invoice, 174 EUR is not an amount worth writing a letter about.

But a margin is a percentage, and a percentage works on volume. A company that converts 2 million EUR worth of invoices a year pays 30,000 EUR at a margin of 1.5%. At 3% — 60,000 EUR.

And, unlike most logistics errors, there is nothing here to correct once and for all. The rate changes every day, and every invoice is a new conversion.

What not to do

Do not send this calculation to the carrier before you have opened the contract. If the contract says that the carrier sets the rate, you will get a short and correct reply, and you will lose your position on the other questions in the same invoice.

The right order: the contract, then the calculation, then — only if there are grounds — the letter.