6 Ways to Minimize Accessorial Charges
Did you know that accessorial charges can constitute up to half of a carrier’s revenue? As profitable as they are for carriers, they are equally costly for the shipper. While accessorial charges may seem like an unavoidable, consistent cost of doing business with a shipper, there are steps that supply chain companies can take to minimize these charges as much as possible.
Accessorial charges like reweighs, surcharges, and rate hikes to name a few, can seriously cut into a shipper’s bottom line. So taking some time to address the cause of these charges and improve accessorial management to minimize them as much as possible can greatly reduce costs to the shipper.
In this blog post, we’ll go over six of the best ways you can minimize freight accessorial charges.
Accessorial Charges Can be Minimized Via Improved Accuracy
One of the most common ways carriers charge you for accessorial charges is due to inaccurate measurements and the weight of freight. Carriers are looking for mistakes and discrepancies in measurements and weights so that they can hit you with surcharges. Keep an accurate record of all of the measurements and weights of your packages before shipping. Therefore, if you are given a surcharge for a package, you can dispute it with your records as evidence.
That being said, you’ll run into problems if your records aren’t perfectly accurate. So make sure all measurements and weights are recorded thoroughly. As far as measurements go, measure the exact height, width, and length. Your company may also want to consider automated data entry for shipment details, like integration with your TMS.
Verify Freight Details
A significant portion of accessorial charges is incurred during delivery. Residential delivery may be unspecified or other details like specific delivery handling services may be left out. When this happens, it can lead to accessorial charges like residential delivery fees or inside delivery charges for small packages.
Therefore, it’s essential to take care of every detail of your freight and delivery requirements and ensure that it’s verified with the carrier. When filling out freight estimates, it’s crucial that all freight details including delivery requirements are specified so that you don’t have to deal with unexpected accessorial charges.
Implement a Dock Scheduling System
Dock scheduling systems can simplify shipping operations and reduce any delays. They automate scheduling pickup and delivery appointment processes, which can improve visibility and reduce communication issues.
Furthermore, implementing a dock scheduling system will consolidate data like shipping information and appointment times. Doing so helps you reduce detention and demurrage fees while boosting load performance and warehouse management. Dock scheduling systems can also help better forecast delays and other unexpected problems so you can better anticipate and adapt to any upcoming delays.
Keeping Track of Accessorial Costs is Crucial to Minimizing Accessorial Charges
It’s important to track accessorial costs and charges so you can identify what charges you can avoid and what accessorial charges are unavoidable. This will help you to discover areas of improvement and avoid certain accessorial costs in the future.
For example, after-hour deliveries could be eliminated with improved time management or better scheduling. Also, tracking regular and unavoidable accessorial charges may help you to negotiate for lower rates (discussed in the section) along with improved accessorial forecasting going forward.
Keeping better track of accessorial charges can be done with regular freight audits. Contact a third-party freight auditing service so that they can handle any discrepancies or overcharges related to accessorial costs and provide you with the data you need to better understand your accessorial costs.
Negotiate Better Agreements
Everything is negotiable, and accessorials are no exception. Remember, carriers rely on customers like you just as much as you rely on them. The first step to negotiating a better deal with your carrier is to be prepared and have a full understanding of your agreements, along with relevant data for your negotiations. Practice regularly reviewing carrier agreements with an expert to find openings to negotiate fees or eliminate unneeded services.
Negotiating with your company’s data to support you will help you to leverage your company’s profitability to carriers. Furthermore, the data will help you to highlight unavoidable accessorials. This alone goes a long way in helping you negotiate lower rates and fees when they inevitably come up. For example, if border crossing is a regular accessorial charge you receive, and it’s one you can’t get around, see if your carrier will charge you a lower rate for it in the future.
Work With a 3PL
Third-party logistics companies have strong relationships with carriers. They can analyze your freight data to improve accuracy. This is helpful when it comes to product measurements and weight, as well as negotiating with carriers regarding accessorial charges. Plus, 3PLs can help with audits and reviewing invoices for any errors, disputing unwarranted charges, and making sure you never overpay.
Our Team Can Help You Reduce Your Accessorial Charges
Accessorial charges can account for a significant portion of carrier costs. Additionally, they can eat into small package cost savings and your bottom line. Although avoiding accessorials altogether is most likely impossible, minimizing them even a little bit can significantly cut costs.
If you’d like to learn more about reducing accessorial charges reach out to us. Redwood Logistics provides third-party analytics and logistics services that can help your company get a better handle on your accessorial charges and save on shipping with carriers.
Let the team at Redwood Logistics guide you toward better accessorial management and forecasting. Contact us today!