04 Jun Understand and Control Your Accessorial Costs
Many company owners don’t realize that the greatest unforeseen cost in shipping are accessorial charges.
Most come as a surprise when the freight bill arrives. These are charges that carriers apply to the freight bill for services beyond normal freight costs. They are generally applied after the shipment has been delivered. These costs are difficult to forecast. The best way to avoid these additional costs is to understand what they are and what you must do to avoid them.
Common Truckload Costs
- Detention /Layover/ Demurrage
- Driver Assist / Count / Clean / Sort & Segregate
- Hazardous Materials
- Limited Access Fee
- Truck Ordered not Used
Common LTL Costs
- Advanced Notification
- BOL Correction
- Oversize / Overlength
- Reclassification /Reweigh
Common Intermodal Costs
- Detention/ Demurrage / Per Diem
Since many of these extra fees are self-explanatory, most can be avoided by establishing a process that starts when the order is entered into your system.
Understanding conditions where the shipment will be unloaded is helpful:
- Does the site have a standard dock?
- What type of equipment is used for unloading?
- Are Lumpers used to unload? How are the Lumpers paid?
- What are the receiving hours?
- Are appointment times required?
Shipping department procedures are important and should be reviewed. Packaging is important and impacts pricing. The way boxes are placed on a pallet and the way boxes are labeled are important to many customers. Shippers must be careful to follow their customers guidelines. Shipments might be refused or require rework. All at additional cost.
Shipping departments must use the correct classification on the Bill of Lading and enter the correct weight. Most LTL carriers have scanners to validate the size and weight of shipments. If a delivery cannot be made for some reason, the shipment could be subject to charges for storage, re-delivery, or return. Accessorial charges create a revenue opportunity for carriers and they have become very good at spotting those opportunities.