Time to read: 8 min.
If you’re reading this blog, you probably know how it feels to receive additional charges on a shipping invoice. These charges affect your budget and it becomes a huge headache. Take heart! You’re not the only one feeling this squeeze.
When you receive an extra charge on an LTL Shipment, the most common reasons might be either a re-weight, a detention charge, a delivery attempt, a limited access or residential pick-up or delivery. These charges are called Accessorials, defined as additional required service upcharges billed on any less than truckload (LTL) shipment.
No one wants to be billed for extra costs, especially when they are out of your control. I mean, no one can predict a long backup of trucks leaving your warehouse because one of your forklifts was damaged. That’s why is so important to understand the reasons why trucking companies bill for accessorial charges and the most common charges issued, in order to be prepared and to better project your logistics costs.
WHY ARE THERE EXTRA CHARGES WHEN SHIPPING LTL?
If you are asking yourself “Why are there extra costs in my shipping invoice?”, it would help you to know that most carriers handle an LTL shipment very differently than a truckload shipment. Generally, a truckload shipment is picked up and delivered by one driver in one trailer and in one trip. However, an LTL shipment will most likely be handled and driven by multiple drivers and in multiple trucks.
In order to optimize resources, LTL carriers combine shipments from various customers along a similar delivery route or in the same geographic area. If your shipment takes up the most space or requires more handling or special equipment and therefore slows down other shipments, more expenses are added to your shipping invoice, not only for the extra handling but for the lost time.
WHAT ARE THE MOST COMMON EXTRA COSTS IN LTL?
Understanding what the most common extra charges are is extremely important so that you can forecast your logistics expenses accurately. Here is a list of the most common extra fees and LTL Accessorials, along with a few insights into each one of them that might be of interest.
- Weight and Inspection Fee
This fee is added when a carrier inspects or reweighs a shipment anddiscovers a difference in the weight or freight class noted on the BOL. The shipping industry is heading to moredensity-based tariffs and dimensioners are allowing carriers to double check weight and dimensions much easier with the help of new technology.
- BOL Correction
When an incorrect BOL is used, either at the point of pick-up or before pick-up, a correction on the BOL must be made and a fee is charged. For this reason, you should plan in advance and make sure the pick-up location is informed and has the correct BOL.
- Hazardous Material Fee
As implied, this extra fee is added to any LTL shipment that contains hazardous chemicals or substances. For these shipments it is critically important to have all of your documents in order to avoid delays at terminals. Any delay will end up adding more dollars to your freight bill. As a tip, always have on hand the correct documentation (i.e. Dangerous Goods Declaration DGD, IMO) when quoting so that you don’t find any surprises once your shipment is out of your control.
- Detention Fee
The current truck driver shortage has become a critical issue in the industry. It has become increasingly harder for trucking companies to hire truck drivers. For this reason, carriers have become stricter in billing detention fees when driver exceeds a free time period. That fee can vary depending on the company, but it is usually applied after 30 minutes.
- Appointment Fees
LTL shipments should be scheduled with a two – hour window minimum before it is expected to be picked up. The warehouse crew will follow the first come, first serve rule. Sometimes warehouses require pickup or delivery appointments and its mandatory for the drivers to do everything possible to arrive on time, carriers have a surcharge when these appointments are required.
- Redelivery Fees
Redelivery charges occur when the driver attempts to deliver a shipment but is not able to successfully deliver. Failed delivery attempts usually happen when the drop off location is closed, or a delivery appointment was required and was not set. It also occurs when the driver must leave the delivery location because the waiting time was reached, and he must make other deliveries.
- Reconsignment Fee
Plans can change and shipping is not the exception; a reconsignment fee is billed when a shipment that is in transit is re-directed from one delivery location to another. This surcharge can vary depending on how far one location is from the other.
- Limited Access Fee
If your shipment needs to be picked up or delivered to locations that are hard to reach and/or require smaller trucks, a limited access fee may be charged. These hard to reach locations could be schools, prisons, military bases, convention centers, construction sites, airports, ocean docks, wharfs, or piers. If you address this detail when quoting, you can limit your expense.
- Lift Gate Delivery/Pick-up Fee:
If your shipment is being picked up or delivered to a location without a dock, a lift gate fee is charged. A lift gate would allow the driver to lift and lower your shipment from the ground to the truck and vice versa. It’s a best practice to avoid this headache and extra expense by addressing this issue when quoting.
- Residential Delivery/Pick-Up Fee:
Deliveries or pick-ups at residential areas are also considered a special expense since LTL is assumed to be dock-to-dock shipping. Residential pick-up or delivery most likely requires trucks with lift gates to load or unload the shipment.
- Tradeshow pick-up/delivery:
A special expense is charged when your shipment is delivered or picked up from an event like a convention, exhibition, or tradeshow. When quoting this type of service, be sure to inform your carrier in advance because exhibiting companies will usually have specific receiving or delivery hours. If these hours affect the wait time of the carrier, you will end up paying for it with extra charges on your invoice. Carriers usually bill this charge as an accessorial.
- Excess Length Fee:
An excess length fee will vary depending on your carrier. As a general rule, this fee is applied to any shipment over 8 feet in length. It is important to be aware of the correct dimensions of the shipment so that you receive an accurate quote and there will be less surprises with your shipping invoice.
SO HOW CAN I SAVE MY COMPANY FROM UNEXPECTED FEES?
A smart shipper should be constantly looking for cost-effective solutions to manage their logistics needs. Establishing procedures to decrease extra costs in the shipping process has become a priority for most companies.
The most common procedure for getting an LTL freight quote is part of the issue. Most often, the initial price quoted by a carrier or 3PL for an LTL shipment is a base line price. A base line price reflects only the cost of shipping the freight from point A to point B. There are no potential accessorial fees added. Again shippers should know why it’s important to be as transparent as possible when quoting so that your provider can put together a quote for you that will uncover any potential accessorial fees. Inform your provider about all pick-up and drop-off specific locations, loading and unloading situations, important timeframes for pick-up and delivery, and any other special requirements you may have.
IF I CAN’T PREVENT EXTRA EXPENSES, HOW CAN I MINIMIZE THEM?
You may not be able to dodge every extra expense, but you can mitigate the risk and manage some of these costs. When you are charged for accessorials, examine the root cause of the charge to see if you can see any patterns. If you are being consistently charged for the same thing, you may be able to prevent those expenses by changing to other mode of shipping that isn’t affected in the same way.
WHAT CAN I DO TO MAKE SURE I GET THE CORRECT RATE FOR MY LTL SHIPMENT?
The following checklist will help you receive accurate rates for your LTL shipments and avoid the headache of extra fees. It’s really easy. Just send all of this information to your provider when quoting:
- Number of handling units
- Total weight of the shipment (and weight by pallet if possible)
- Dimensions (L x W x H) per handling unit
- Confirm if freight is stackable or not
- Origin and delivery zip code
- Any known accessorial fees or special needs for pick-up or delivery
The more you understand the complexity of the industry, the more accurately you can forecast your costs. Bringing in an expert company to handle your LTL shipments can help make your job easier.
By contacting GLT, you’ll leverage the experience, state-of-the-art technology and dedicated customer service team to handle your loads from start to finish so you can ship with confidence every time.