Accessorial charges are a crucial aspect of logistics that can significantly impact the cost of shipping goods. For anyone in the logistics industry, understanding these charges is essential to avoid unexpected expenses and manage shipping budgets effectively.
This guide will walk you through what accessorial charges are, why they are applied, common types of charges, and how to manage them.
What are accessorial charges?
Accessorial charges are additional fees that carriers apply for services beyond standard pickup and delivery. These services often require extra labor, specialized equipment, or additional time, which are not included in the base shipping rate.
Examples include liftgate services for locations without loading docks, residential delivery fees, and charges for handling hazardous materials.
Why are accessorial charges applied?
Carriers apply accessorial charges to cover the costs associated with providing specialized services. These services can complicate the shipping process, requiring more resources than standard shipments.
For instance, delivering to a residential area may involve navigating through non-commercial zones, which can be more time-consuming and costly. Similarly, handling hazardous materials requires special precautions and equipment, increasing the risk and cost for carriers.
What are the common types of accessorial charges?
Accessorial charges cover a wide range of services that go beyond standard pickup and delivery. Below are the ten of the most common types of charges you might encounter:
1. Liftgate service
This charge applies when a shipment requires the use of a liftgate to load or unload freight at locations without a loading dock. It’s essential for businesses that frequently ship to or from sites without the necessary equipment.
2. Residential delivery
Deliveries to residential areas often incur additional fees due to the complexity of navigating non-commercial zones. This includes deliveries to homes or other non-business locations.
3. Inside delivery
When drivers need to enter a building to deliver or pick up freight, an inside delivery fee is typically charged. This service requires more time and effort from the driver.
4. Detention fees
These fees are applied if a driver is detained beyond the allotted time for pickup or delivery, usually two hours. This can happen if the shipper or receiver is not ready to load or unload the freight promptly.
5. Fuel surcharges
These charges fluctuate based on fuel prices and are used to offset the carrier’s fuel costs. They help ensure that carriers can maintain profitability despite changes in fuel prices.
6. Hazardous materials (HAZMAT) handling
Shipments containing hazardous materials incur extra fees due to the specialized handling required. This includes the use of special equipment and adherence to strict safety protocols.
7. After-hours delivery/pickup
Deliveries or pickups outside regular business hours (8 a.m. to 5 p.m.) are subject to additional charges. This service is useful for businesses that need to operate outside standard hours.
8. Bill of Lading (BOL) correction fees
Errors in the BOL may result in correction fees if changes are needed after pickup. Accurate documentation is crucial to avoid these charges.
9. Canadian border crossing fees
Shipments crossing the Canadian border incur additional fees for customs processing. These fees cover the costs associated with clearing shipments through customs.
10. Oversized/overweight fees
Shipments exceeding standard size or weight limits require special handling and equipment, leading to higher charges. These fees ensure that carriers can safely transport oversized or overweight freight.
What are the best practices to managing accessorial charges?
Managing accessorial charges effectively is key to avoiding unexpected expenses and maintaining a stable shipping budget. Let’s explore some practical strategies to help you minimize these charges.
Plan ahead and communicate clearly
Understanding the specific requirements of your shipment is crucial. Communicate clearly with your carrier about any special needs, such as liftgate services or residential delivery. This proactive approach ensures that you are prepared for any additional fees and can factor them into your budget.
Ensure accurate documentation
Accurate and complete documentation is vital. Errors in the Bill of Lading can lead to correction fees, which can add up quickly. Double-check all details before submitting them to avoid unnecessary charges.
Negotiate with carriers
For businesses with a high volume of shipments, negotiating accessorial charges with carriers can lead to more favorable terms. Discuss your specific needs and explore potential discounts or bundled services that can help reduce costs.
Leverage technology
Utilize digital platforms that incorporate accessorial charges into initial quotes. This transparency helps you avoid surprises on the final invoice and ensures that you have a clear understanding of all costs involved from the start.
Regularly audit charges
It’s important to regularly review invoices to ensure that all accessorial charges are valid and accurately applied. This diligence can help prevent overcharging and ensure that your shipping budget remains on track.
Optimize freight classification
Ensure that your freight is correctly classified to avoid reclassification fees. Incorrect classification can lead to unexpected charges, so it’s essential to verify that your shipments are categorized accurately.
In summary, an Accessorial Charge in logistics is an additional fee applied by carriers for services beyond standard pickup and delivery, such as liftgate services, residential delivery, or handling hazardous materials.
