If you are a new shipper in the LTL (Less-than-truckload) world, it may seem like big maize at times, without a starting or ending point. There may seem like an overwhelming amount of information that a shipper needs to know, ranging from learning the NMFC classes, to the specifics, like who is the best carrier to haul your freight, and what price will they charge. This is just a glimpse of the Freight World. Seasoned shippers, who have been in the business for 20 plus years, often find themselves being introduced to things that they didn’t know, or thought they knew, and were totally wrong. The Freight World is a dynamic, fast moving industry that warrants attention to details by Logistic Departments. With this being said, one of the trickiest topics to grasp, especially when a company first starts shipping freight, is Accessorial Charges.
Many shippers don’t really think about the consequences of not doing their due-diligence to research what type of equipment is needed for their shipments. They often think that these charges are “small things” when you look at the big picture. The typical thought process from the shipper is, “I’m not worried about it, because the carrier will take care of it.” This mind-set can be dangerous, because if these charges aren’t calculated at the onset of pricing out a shipment, there is a good chance that the cost of the accessorial might cause the shipper to lose profits. Too many of these can cause a negative effect to the bottom line for a company. Carriers use what’s called a Supplemental Bill. The name speaks for itself, as the shipper or bill to party, will get an additional bill after the shipment with the new accessorial charges, if it’s not included on the original bill. Lesson here, is that they will always bill you these charges. This becomes a cash cow for carriers, and allows them to boost their profit margins significantly. The following are a few of the “small things” that a shipper might run into and if not taken care of correctly can add up into “big costs.” Each of these accessorials, at a minimum depending on which carrier is chosen, starts at $25/$50.00 and goes up.
Appointment Notification Prior to Pick Up or Delivery
Hazardous Materials Fee
Sort and Segregation by Driver
Convention or Trade Show Deliveries
Non Commercial & Job Site Deliveries
Border Crossing Fees
Re-Weigh and Re-Classification
Billing Change (especially when proper BOL not used)
Inside Pick Up or Delivery
In conclusion, the shipper needs to do their JOB on the front end to ensure that unforeseen charges aren’t a surprise to either party. Also, it is highly recommended that before the shipment leaves the warehouse that it is determined who will be responsible for paying these charges.
Earl White has been working in the Transportation & Logistic Industry for over 15 years. He got his start in the Operations side of the business in 1991 and worked his way into a Sales position at the start of 2000. He has worked for many of the Top Logistic companies in the Industry, ranging from Fedex to Roadrunner Transportation. He holds a Masters Degree in Business and is currently working towards a Supply Chain Degree. He is a business owner, who helps to reduce his clients Supply Chain costs and educate them on how to work smarter, not harder in their Shipping Department.