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Managing Accessorial Charges: How to Spend Less On Shipping

Accessorial fees graphic

 

Accessorial charges are additional fees applied by freight carriers for services beyond standard shipping, like packing, unloading, and parcel storage. These charges cover the additional time, labor, and equipment required to effectively complete the delivery.

Shipping is a complex process that has a lot of moving parts. Unfortunately, this means your shipping costs may vary–especially if you’re charged for additional services by your carrier.

If your freight invoice is higher than you expected, you might have been charged an accessorial fee. Fortunately, there are ways you can avoid these fees and keep costs down.

In this article, we’ll help you understand what accessorial charges are, why they’re showing up on your freight invoices, and how to minimize them.

Key Takeaways

 

  • Accessorial charges in freight shipping are additional fees for services beyond standard pickup and delivery, which can add unexpected charges to your invoices.

  • Common types of accessorial fees include detention fees, layover fees, a fuel surcharge, and charges for specialized equipment. Because these situations are common, it’s important to prioritize detailed planning and transparent communication with carriers.

  • You can manage accessorial charges with accurate shipment details, logistics software, and the help of third-party logistics providers.

What Are Accessorial Charges in Shipping?

In freight transportation, accessorial charges are additional costs that freight carriers charge for essential shipping services beyond standard pickup and delivery. While the base rate covers transportation from point A to B, these added fees come from the additional services required to complete the delivery. 

Accessorial charges usually result from specific needs or unforeseen circumstances that come up during transport or delivery, such as:

  • waiting time at a loading dock

  • special handling instructions on a bill of lading

  • indoor delivery

  • liftgate service

  • residential delivery

  • appointment delivery

If you want to manage your transportation costs, it’s crucial to understand, account for, and learn how to avoid accessorial charges whenever possible.

When you request specific delivery services, freight accessorial fees are typically added to your freight bill during shipment booking. However, if they’re unexpected, they can also be charged during or after the shipment has been completed, which creates a discrepancy in your freight invoices.

Common Types of Accessorial Charges

Detention charges and unexpected fees

Accessorial charges come in many forms, which can be hard to distinguish and understand if you’re not familiar with industry terms. But the more you know about these charges, the better you can plan for them or avoid them entirely. 

Some common accessorial fees include:

  • Detention fees are charged for time spent loading or unloading, often at a rate of $25 to $100 per hour after the initial grace period

  • Layover fees are for time spent waiting due to delays at the loading dock

  • Redelivery fees apply when delivery must be attempted again for a non-carrier reason

  • Equipment fees are for equipment rentals required for transport or delivery

  • Hazardous materials fees are for proper safety measures when transporting certain materials.

  • Stop charges apply when carriers have to make multiple deliveries

  • Truck ordered, not used (TONU) charges are for canceled trucks that weren’t used

  • Inside delivery fees are for indoor or restricted delivery areas

  • Re-consignment fees apply to changes in the delivery address

  • Storage fees are for storing freight that can’t be delivered yet.

Each fee introduces an extra layer of complexity and cost that can rapidly pile up. Understanding these fees and potential costs can help you better plan and budget your shipments.

Reasons Behind Accessorial Charges

While paying higher shipping costs is frustrating, accessorial charges occur for a reason. They’re a normal part of logistics because shipping is unpredictable, especially over long distances or with unique products.

Accessorial charges arise for a variety of reasons, but their causes can be broken down into three primary categories:

  1. Administrative fees often arise due to unexpected delays, additional paperwork, or changes to the shipment that require immediate handling.

  2. In-transit charges result from the additional distance or time required for delivery, special permits for oversized loads, or unforeseen events that disrupt the planned route.

  3. Equipment-related fees include charges for specialized equipment needed for the shipment, such as refrigeration units or liftgate services to help unload cargo.

Each unique situation requires time or effort to overcome the obstacles that arise, which is why these charges exist. Understanding these different types of fees can also help you identify how to minimize or prevent them in the future.

Who’s Responsible for Accessorial Fees?

Many accessorial fees that occur during transit are unexpected and up to the carrier to resolve so your delivery can continue. However, in most cases, you are responsible for the added accessorial charge.

Unfortunately, it’s impossible to plan for every bump in the road that may appear during shipping. Unexpected problems can arise at any stage of the process. Unless you’ve outlined who’s responsible for certain shipping issues in your shipping agreement, you’ll have to pay to complete delivery. 

These unexpected charges that you’re responsible for are one of the major reasons you need to be proactive and develop a shipping strategy that accounts for these issues. That’s where software and logistics providers come in.

Strategies to Avoid or Reduce Accessorial Charges

Avoiding additional shipping costs requires analysis, planning, and effective communication. Process automation is a cornerstone of this approach, helping to limit human errors, remain compliant, and detect trends in accessorial charges. 

By implementing a transportation management system (TMS), you can avoid many post-booking fees that stem from booking errors like incorrect shipment classifications or bill of lading (BOL) inaccuracies.

A TMS helps you ensure accurate shipment details, which are your best defense against unplanned fees. Here are some things you can do to avoid costly reworkings and charges:

  • Ensure that freight classifications are correct on the bill of lading before palletizing

  • Verify weights and measurements to accurately estimate costs and special equipment needs

  • Meticulously check bill of lading details before shipment collection to avoid misunderstandings

  • Streamline freight contracting and avoid unnecessary services

  • Prevent charges like ‘truck ordered, not used’ and ‘out of route’ miles with proper scheduling and route planning

  • Utilize dock scheduling tools to minimize the time it takes to load and unload cargo

  • Redistribute shipments to avoid less-than-truckload (LTL) freight and overweight fees

  • Negotiate accessorial charges within service-level agreements (SLAs)

  • Offer detailed information in advance to reduce common or inevitable costs

Implementing these strategies can improve transportation efficiency and create a more streamlined shipping process.

The Role of Third-Party Logistics Providers (3PLs)

When it comes to effectively managing your shipping costs and avoiding an accessorial fee, a third party logistics provider (3PL) plays a critical role. They use their knowledge of the logistics landscape to identify accessorial charges, uncover ways to prevent them, and even lower their costs by negotiating with carriers.

Alongside their experience, these providers will also utilize freight auditing software to gain valuable insights into fees, improve billing error detection, and save you valuable time.

Overall, working with a 3PL can help you:

  • Manage costs effectively

  • Streamline transportation processes

  • Improve supply chain visibility

  • Enhance customer service

Working with a logistics provider frees up valuable time and energy to focus on core business activities. They also help ensure that the shipping process is as cost-effective and efficient as possible.

Tools and Technologies to Manage Accessorial Fees

Managing accessorial fees with technology

Modern logistics and shipping management rely on technology for a streamlined and reliable supply chain. Transportation management systems are one critical application that provides automation, visibility, and freight settlement tools that empower shippers to control costs.

Whether you use TMS or auditing software yourself or work with a provider, leveraging these tools improves planning and communication to reduce additional freight fees. They also include freight rate data tracking that helps identify accessorials for each shipment, ensuring that nothing slips through the cracks.

Adoption of these modern solutions allows shippers to:

  • Handle accessorial fees more efficiently

  • Enhance their overall shipping process

  • Achieve cost savings

  • Enhance the reliability and efficiency of their supply chain operations

Overall, if you want to be cost-effective, technology has to be part of your logistics management plan.

Case Study: How Zero Down Helped Save 8% On Shipping Costs

A Zero Down client was changing their payment method with a carrier who wrote up a new contact. However, despite claiming it was the same, they had actually stripped out the accessorial discounts they offered previously.

When Zero Down analyzed their proposal, they found the discrepancy and immediately had the contract fixed. They were able to save 8% on shipping for the length of the contract with one analysis.

Planning Ahead to Anticipate Accessorial Charges

Knowledge and understanding are also important for minimizing accessorial fees. If you understand your shipping process and facilities, as well as the carrier’s delivery practices, you can avoid surprises. Through effective communication, you’re able to plan deliveries to avoid layovers and ensure that all equipment and handling requirements are relayed in advance.

End-to-end shipment visibility using real-time data from a transportation management tool is essential for this. It enables shippers to:

  • Identify potential issues ahead of time

  • Avoid unexpected equipment accessorials

  • Coordinate shipment, delivery, and unloading timing

  • Improve planning and communication from initial pick-up to final delivery

This combination of your knowledge and the right tools can prevent the scramble to cover unexpected costs and ensure a smoother shipping experience.

Minimizing the Impact of Accessorial Charges On Your Shipping Spend

It’s clear that accessorial charges are more than just line items on a freight bill—they’re disruptive charges that can sway the cost-effectiveness of your shipping operations. You need to do everything you can to reduce the frequency and cost of these costly fees. And that begins with developing an effective shipping management strategy. 

You can better manage your shipping spending and logistical efficiency by embracing audit and transportation management software, accurate shipment detailing, and third-party logistics providers.

Don’t bleed profits from added fees; choose Zero Down, the right supply chain solution to simplify your shipping management.

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Author: Brad McBride

Brad McBride, CEO and Founder of Zero Down Supply Chain Solutions is a dynamic leader with over 30 years of experience in the supply chain sector. His journey began at Consolidated Freightways in 1988, where he mastered freight logistics and pricing. His career led him to Eagle Global Logistics, diving into international freight forwarding and leading high-volume shipping projects.

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