As a shipper, the last thing you want is an unwanted surprise when you get your freight bill. Before the additional fees add up, it pays to know your accessorial charges beforehand

Accessorial charges, sometimes referred to as value-added services, are additional fees that may be added to a shipment’s transportation cost. These charges are applied to cover the cost of extra time, labor, or care required to honour special shipping requests. Accessorial fees vary based on the type of shipment and can quickly add up, making it important for shippers to understand what they are and how they can reduce them.

What Are Accessorial Charges?

Accessorial charges are extra fees that are added to the base price of a service, primarily in industries that involve transportation, logistics, and deliveries. They are typically applied when certain conditions or requirements are not met, or additional services are needed. Essentially, they cover the “accessories” of the primary service. Similarly, these charges are designed to compensate for the extra time, effort, or resources required to complete a job.

Since accessorial charges can significantly impact a shipment’s total cost, it’s essential for shippers to understand them to avoid unexpected expenses. By planning and minimizing these charges, shippers can reduce their transportation costs thus improving their bottom line. In the following sections, we will explore what accessorial charges are, why they are important, and how you as a shipper can reduce them.

Understanding Accessorial Charges

It is essential to note that accessorial charges are not included in the standard shipping rates and are typically added on top of the base cost of the shipment. These fees can vary depending on the carrier and the specific services required, making it critical to review and understand all charges before finalizing a shipment.

Common accessorial charges can include a wide range of fees, such as liftgate services, inside delivery, residential surcharges, and fuel surcharges. Carriers and freight brokers may apply these fees for various reasons, such as extra labor or equipment needed to complete a shipment.

Types of Accessorial Charges

When it comes to shipping, accessorial charges can add up quickly. These additional fees are charged for any services beyond standard pick-up and delivery. To help you better understand what to expect, here are some common types of accessorial charges that you may encounter:

Loading and Unloading Fees

Loading and unloading fees are charged when a shipment requires additional labor or equipment to load or unload. This may include the use of a forklift, loading dock, or extra labor. These fees can vary depending on the carrier and the specific requirements of the shipment.

Delivery Related Charges

Delivery related charges include any additional services required at the delivery location. This may include inside delivery, residential delivery, or liftgate service. Inside delivery is charged when the shipment needs to be delivered beyond the front door, while residential delivery is charged for deliveries made to residential areas. Liftgate service is charged when the delivery location does not have a loading dock or forklift available.

Fuel and Time Related Charges

Fuel and time related charges are fees that are charged based on the distance traveled and the time required to complete the delivery. Fuel surcharges are added to the base rate to cover the cost of fuel, while detention charges are charged when a shipment is delayed at either the pick-up or delivery location. Layover charges may also be charged when a driver is required to wait for an extended period of time.

Special Handling and Equipment Charges

Special handling and equipment charges are fees that are charged when a shipment requires special handling or equipment. This may include hazardous materials, oversized or overlength shipments, or extra services such as reclassification or reweighing. Hazardous materials require special handling and may require additional documentation, while oversized or overlength shipments may require special permits or equipment.

Documentation and Reclassification Charges

Documentation and reclassification charges are fees that are charged when a shipment requires additional documentation or reclassification. This may include the preparation of a bill of lading (BOL) or freight invoice, as well as reclassification and reweighing of the shipment. The National Motor Freight Classification (NMFC) number is used to determine the correct classification for a shipment, and any errors in classification can result in additional fees.

Additional Types of Accessorial Fees

Provided you know the scope of accessorial charges, they can be anticipated and included on the initial bill. Additional reasons for these charges may include:

• Layover Charges
• Re-consignment
• Stop Charges
• TONU (Truck Ordered and Not Used)
• Detention
• Limited Access Pickup or Delivery
• Blind Shipments
• Sort and Segregate

Overall, understanding and being familiar with the various types of accessorial charges can help you better prepare for the total cost of your shipment. By working with a reputable carrier or freight broker, you can ensure that you are aware of any potential fees and can make informed decisions about your shipping needs.

Strategies to Negotiate and Reduce Accessorial Charges

When it comes to reducing accessorial charges, negotiation is key. By working with carriers to establish clear expectations and guidelines, shippers can reduce the number of accessorial charges they incur. Here are some strategies to help shippers negotiate and reduce accessorial charges:

Planning and Communication

One of the most important strategies for reducing accessorial charges is effective planning and communication. Shippers should work closely with their carriers to establish clear expectations for pick-up and delivery times, as well as any special requirements for loading and unloading. By providing carriers with accurate information in advance, shippers can help ensure that shipments are delivered on time and without incident, reducing the need for additional charges.

Accurate Information

Another key strategy for reducing accessorial charges is providing carriers with accurate information about the shipment. This includes the weight and dimensions of the shipment, as well as any special handling requirements. By providing carriers with accurate information, shippers can help ensure that the shipment is loaded and transported safely and efficiently, reducing the risk of damage or delays that can result in additional charges.

Advance Notification

Shippers should also provide carriers with advance notification of any changes to the shipment, such as a change in delivery address or a delay in pick-up. By providing carriers with advance notification, shippers can help ensure that the shipment is delivered on time and without incident, reducing the need for additional charges.

Negotiation

Finally, negotiation is key to reducing accessorial charges. Shippers should work closely with their carriers to negotiate rates and establish clear guidelines for when accessorial charges will be assessed. By establishing clear guidelines and negotiating rates in advance, shippers can help ensure that they are not surprised by unexpected charges and can budget accordingly.

In conclusion, shippers can reduce accessorial charges by effective planning and communication, providing carriers with accurate information, providing advance notification of any changes to the shipment, and negotiating rates and guidelines with carriers. By following these strategies, shippers can help ensure that their shipments are delivered on time and within budget.

Role of Logistics in Managing Accessorial Charges

Logistics plays a crucial role in managing accessorial charges. Accessorial charges refer to additional services that a carrier provides beyond the standard shipping services.

Logistics companies are responsible for managing accessorial charges by negotiating with carriers to ensure that the charges are reasonable and fair. They also work with shippers to identify potential accessorial charges and develop strategies to minimize them. By doing so, logistics companies can help shippers save money and improve their bottom line.

In addition to negotiating with carriers, logistics companies also use technology to manage accessorial charges. They use transportation management systems (TMS) to track shipments and monitor carrier performance. This technology allows them to identify potential accessorial charges and take action to prevent them from occurring. For example, if a shipment is delayed due to weather conditions, the logistics company can work with the carrier to avoid detention charges by rescheduling the delivery time.

Third-party logistics (3PL) providers are particularly adept at managing accessorial charges. They have the expertise and resources to negotiate with carriers and manage the entire shipping process. 3PL providers can also provide shippers with access to a network of carriers, which can help them find the best carrier for their specific needs.

In the logistics industry, managing accessorial charges is essential to maintaining profitability. By working with carriers and using technology to manage these charges, logistics companies can help shippers save money and improve their bottom line. Effective management of accessorial charges requires a combination of negotiation skills, technology, and expertise, all of which logistics companies possess.

Frequently Asked Questions

What are some common accessorial charges in the trucking industry?

Accessorial charges are additional fees that carriers and brokers charge for services beyond standard pick-up and delivery. Some common accessorial charges in the trucking industry include detention fees, liftgate fees, inside delivery fees, and re-delivery fees.

What is the difference between an accessorial charge and a surcharge?

An accessorial charge is a fee for a specific service that is not included in the base rate, while a surcharge is an additional fee added to the base rate to cover fuel, security, or other costs. Accessorial charges are typically more specific and relate to services provided, while surcharges are more general and relate to overall costs.

How do accessorial charges affect shipping costs?

Accessorial charges can significantly impact shipping costs, especially for less-than-truckload (LTL) shipments. Truckload accessorial charges are often added to the base rate and can vary depending on the type of service required. Shippers should be aware of these charges and factor them into their shipping costs.

Can accessorial charges be negotiated or waived?

Accessorial charges can sometimes be negotiated or waived, especially if a shipper has a long-standing relationship with a carrier or broker. However, it is important to note that not all charges can be waived, and carriers and brokers may have different policies regarding negotiation.

What is the typical range of accessorial charges for LTL shipments?

The typical range of accessorial charges for LTL shipments can vary depending on the carrier or broker and the specific service required. However, some common charges include detention fees ranging from $25 to $100 per hour, liftgate fees ranging from $50 to $100, and inside delivery fees ranging from $50 to $100.

Are accessorial charges the same for all carriers and brokers?

Accessorial charges are not the same for all carriers and brokers. Different carriers and brokers may have different policies and fees for specific services. Shippers should be aware of these differences and factor them into their shipping costs when comparing carriers and brokers.

Have you looked at your shipping processes in order to save money and control overhead? As a small business owner, there’s a chance you may be spending too much and not getting nearly enough in return.

Smart shipping management requires a basic understanding of industry terminology. The small investment in the time it takes to familiarize yourself with industry-specific jargon will pay dividends by reducing miscommunication.

If your company doesn’t have its own shipping department, you should be aware of shipping terms and conditions, especially before conducting direct imports. No one expects you to learn all the intricacies, but knowing the basics will keep you out of the dark, and out of trouble.

Therefor, here’s a quick reference sheet you can refer to to acquaint yourself with what may be some unfamiliar shipping terminology.

Shipping, Freight, and Logistics Terms

1. Accessorial Charge

   Additional fees charged for add-on services or equipment required for the delivery of your cargo.

2. Backhaul

   When a driver transports cargo during the return trip of a commercial vehicle, is known as a backhaul. This helps the cargo vehicle maximize their trips.

3. Bill of Lading

   A document issued by a carrier to a shipper, signed by the captain, agent, or owner of a vessel. Furnishing written evidence of receipt of the goods (cargo), the conditions on which transportation is made (contract of carriage), and the engagement to deliver goods at the prescribed port of destination to the lawful holder of the bill of lading.

4. Customs Broker

   An individual or firm licensed by, in this case by U.S. Customs & Border Protection, to act for importers in handling the sequence of custom formalities and other details essential to the legal and speedy exporting and importing of goods.

5. Carrier

   A legal entity or entitled individual in the business of transporting passengers or goods for hire. Shipping lines, airlines, trucking companies, and railroad companies are all carriers.

6. Container

   A single rigid, sealed, reusable metal box in which merchandise is shipped by vessel, truck or rail. Ocean shipping containers are generally 20, 40, 45 feet long. Ocean freight container types include: standard, high cube, hardtop, open top, flat, platform, insulated, refrigerated, etc.

7. Detention

   The process of holding a carrier’s driver and/or truck trailer beyond a certain stated period of “free time”, often resulting in the assessment of detention charges. The delay in clearing goods through customs resulting in storage and other charges. The prevention, by government authority, of a vessel and/or cargo leaving port.

8. Cartage and Drayage

   Cartage is the movement of goods for short distances, usually by truck. It is also referred to the charge to pick up, move and deliver good short distances.
   Drayage is the charge made for hauling freight or carts, drays or trucks.

9. Freight Forwarder

   A person engaged in the business of assembling, collection, consolidating, shipping and distributing less-than-carload or less-than-truckload freight. Additionally, a person acting as agent in the trans-shipping of freight to or from foreign countries and the clearing of freight through customs. Often including full preparation of documents, arranging for shipping, warehousing, delivery and export clearance.

10. Hazmat

    Short for “hazardous materials”, which essentially is any material that could cause potential harm to anything or anyone it comes into contact with. Special endorsements are needed from all parties involved to legally transport hazardous materials.

11. Incoterms

    Short for International Commercial Terms, which are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC). Incoterm define basic shipping terms.

12. Intermodal

    Cargo that is shipped using multiple forms of transportation, such as rail transport and cargo trucks.

13. Lane

    A regular route of transportation taken most often by commercial transporters.

14. LTL (Less Than Truckload)

    A shipment weighing less than the weight required for the application of the truckload rate. These smaller shipments are often combined to create full truckloads.

15. Lift gate

    A mechanism on the back of cargo trucks that allows the driver to load and unload goods more easily. A lift gate is usually required for shipments picked up or delivered to a destination with no shipping dock.

16. Parcel Service Failure

    When you order an item from a retailer, you’re effectively creating a contract between the two of you, even if it’s not written down. If your parcel is late you may opt to contact the courier first, even though it’s the retailer you will need to deal with in order to get compensation. Alternatively, there is a parcel failure refund service, which identifies late or lost deliveries and guarantees your shipment will arrive or be refunded to you no matter what happens.

17. Reefer

    A temperature controlled container that keeps cargo such as food at the proper temperature throughout the transportation process.

18. Shipper’s Agent

    A shipper’s agent is not a carrier, freight forwarder or broker. Shipper’s agents generally arrange for truckload or container load shipment transportation. Shipper’s agents commonly provide services related to warehousing or loading and unloading.

19. Tariff

    A Tariff is a document setting forth applicable rules, rates and charges (often in the form of additional taxation) to move goods. A tariff sets forth a contract for the shipper, the consignee, and the carrier

20. Tender

    A fixed price offered to move cargo.

21. Third-Party Logistics (3PL)

    A term used when distribution services are outsourced through a third-party. Brimich Logistics may be considered a third-party global logistics company.

22. Transportation Management System

    Often abbreviated to TMS, this is specific software that allows freight forwarders to easily analyze and automate transportation operations. It’s especially beneficial for companies handling large amounts of commercial cargo.

23. Truckload (TL)

    Large-volume shipment from a single customer that weighs more than 10,000 pounds or takes up a complete trailer space so no other shipment can be loaded.

The Benefits of Working With a Freight Broker

For a small business, a freight broker can eliminate a lot of the anxiety surrounding freight shipping.  Therefor it’s helpful to have a good handle on basic terminology.

Speaking the same language will ensure clear communication and hopefully as mentioned, prevent misunderstandings.