Accessorial charges can increase your freight charges by as much as 35 %. Shippers turn a blind eye to them until they appear on their statement, and just pay them under the assumption that there’s nothing more that can be done to control these less frequent budget busting expenses that crop up during deliveries to clients. For those not in the know, “accessorials” as they are referred to in the industry, are charges that are incurred by shippers for additional services that are provided over and above the standard dock to dock, driver no touch, delivery standard. Tail gate delivery, heat no freeze, driver assist, waiting time, are just a few accessorial fees that carriers regularly charge extra for. Here are a few ways that you can take control of and manage these costs in the future.
THESE CHARGES CAN BE MANAGED AND ALLEVIATED
Several of these expenses relate directly to the manner in which shippers organize and manage their shipping facilities. For instance, there is an allotted free time to load and unload shipments. Typically, full loads are provided 2 hours to load and 2 hours to unload, whereas less than truckload or LTL is provide 30 minutes. A well-organized warehouse will find that this time allotment sufficient to load and unload. However, several ill managed facilities can surpass this allowance, providing the carrier with justification to charge additional waiting time incurred by the hour. If your shipper is incurring additional waiting time on your shipments, you should take a close look at what your procedures are, and correct where necessary in order to control these charges in the future.
THESE ADDITIONAL COSTS CAN BE NEGOTIABLE
Typically, one can negotiate such items as the amount of free time allotted to load and unload, the extra cost for an extra stop along a route, or the terms of payment of your invoices depending on your credit worthiness. Today, fuel surcharges are a large component of the overall transportation cost, but are negotiable. The fuel surcharge will usually have two components, the true additional costs of fuel, and a profit margin. This extra margin is what you can negotiate in your favor.
Being a shipper of freight, you should identify the accessorials you frequently use and are charged, and concentrate on negotiating them with your carrier during your yearly freight discussion. Other issues to be on the lookout for are charges like lumper fees that usually relate to the food industry. Lumpers are simply individuals that provide extra help on the dock of food service firms, in order to break down skids of merchandise, and to re-palletize them to the industry standard (usually 48 inches in height). This fee should be a straight pass through without adding any extra charges.
CARRIER ACCESSORIAL CHARGES ARE NOT CREATED EQUALLY
In certain segments of the transportation industry such as the courier industry, the accessorial charges are somewhat standardized. However, in the trucking sector there usually is a wide variance between firms for these fees. The idea here is to carefully scrutinize each charge, and compare them to other firms, in order to arm yourself with enough ammunition that can serve you well during your negotiation phase with your carrier. By not scrutinizing your accessorial charges with vigor, you may be offsetting the great savings incurred with a rate reduction, by the additional costs incurred in accessorial fees.
WHAT IS MANAGED CAN BE MEASURED
This is an area that many firms miss. Many businesses gather immense amounts of data on their freight costs, however they just do not drill down enough into the detail required to help identify areas of opportunity to focus on. For those who collect this data, this is an area of great importance that should not be neglected. By assessing your expenses over time in definite areas, and managing these areas in a regular fashion, one will eventually be able to reduce or even eliminate additional costs that used to be incurred.