Accessorial charges that are assessed while a shipment is in-transit or upon its delivery can present an important cost management issue for businesses. Since many companies charge their customer for shipping when an order is placed, it is problematic when the actual shipping charges exceed expectations due to accessorial fees. With shipping costs that exceed the associated revenue collected from the customer, these accessorial fees become a certain cause of loss. At a minimum the unanticipated charges will reduce expected profits.
Many shippers are unaware that carriers like UPS and FedEx will discount most accessorial fees. In some cases a carrier may agree to entirely waive a fee. The cost reduction resulting from a discounted (or waived) accessorial fee can be substantial.
BEST PRACTICE SUGGESTIONS:
1. Be aware of the accessorial charges that your carrier has the ability to assess.
2. Identify which accessorial charges your company regularly incurs.
3. Relative to your shipping characteristics, negotiate industry leading accessorial fee discounts (and/or waivers) in addition to your transportation tariff incentives.
4. Design a system that enables your company to pre-determine and charge your customers for accessorial fees that will be assessed in-transit and upon delivery.
5. Validate the legitimacy of every individual accessorial charge that appears on your carrier invoice.
Lojistic can help your company implement the best practices we have suggested above…and much more. Our team thoroughly understands today’s complex carrier pricing environment and has help hundreds of companies implement solutions to reduce shipping costs. Contact us today to review the solutions we can provide for you.
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Common Accessorial Fees Assessed In-Transit and/or Upon Delivery:
• Dimensional Charge
• Residential Charge (plus transportation differential)
• Address Correction Charge
• Delivery Area Surcharge
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Author
Rich Harkey
Rich Harkey
Senior Strategy Manager
Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry.
As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts.
Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results.