How to Lower Freight Charges in Logistics
Freight charges constitute a significant portion of logistics costs for businesses, and optimizing these charges is essential for maintaining profitability and operational efficiency.
DockMaster: A Game-Changing Solution
One of our flagship solutions is DockMaster, designed specifically for freight shippers and carriers. DockMaster revolutionizes the way LTL shipments are managed by capturing and sharing shipment dimensions, weight, barcodes, photos, and more. Say goodbye to invoice surprises and back charges with this innovative tool created by LTL industry professionals.
Information On Freight Accessorial Charges
Types of accessorial charges that you may receive by your carrier and how Dockmaster can help you avoid them.
Advanced shipping notification
Shipping charge correction audit fee
Detention & demurrage charges
Reconsignment fee
Fuel surcharge
Inside delivery or pickup
Liftgate services
Redelivery fee
Residential surcharge and limited access fee
Reweigh and reclassification
Sort, segregate and lumper fee
Advanced Shipping Notification
Definition — This freight fee is added when a driver is required to contact or notify the consignee in advance that the cargo will be delivered.
How to dispute — If you were charged this accessorial fee, but did not request the service, you will need to provide documentation that the request was not on the bill of lading (BOL) or delivery receipt. It's also worthwhile to contact all parties involved in the delivery to independently verify that the service was never requested and to confirm whether the service actually occurred.
Tip for future deliveries — As the shipper, it's your responsibility to understand any special requirements from the consignee in advance. Additionally, make sure to keep important documents, including BOLs, invoices and receipts. Clear lines of communication with carriers and customers are also key to accurate delivery and services.
Shipping Charge Correction Audit Fee
Definition — When a correction freight fee is applied to an invoice, it's typically because an item on the BOL was updated after the shipment was picked up. A common example is when inaccurate or missing billing information is revised.
How Dockmaster can help — Use Dockmaster to capture the freight barcode, dimensions and weight in an electronic record that can be easily retrieved and shared with your carrier. We recommend shippers use the Dockmaster photographs and text notes to complete the digital record of their freight consignment.
How to dispute — Check to see if the BOL had the correction information and verify no changes were made, refer to the Dockmaster record of the freight. It's certainly possible that the carrier made a clerical error that accounted for the fee. At that point, a dispute can be made, the shipper will provide the Dockmaster report to support their position on the dispute.
Tip for future deliveries — Use Dockmaster to capture data on your shipment, including photographs. Properly fill out your BOL and other paperwork and keep them handy. You also want to avoid BOL updates when possible. If updates are necessary, try to ensure they are accounted for before pickup.
Detention & Demurrage Charges
Definition — Extended delays at the pickup and/or drop-off will incur accessorial charges for the driver's wait time and inconvenience.
How Dockmaster can help — Dockmaster digital record can be used to demonstrate the status of the shipment at pickup – including the precise time stamp and photographs to demonstrate the freight was correctly prepared for pickup.
How to dispute — If you believe the detention fee to be incorrect, gather all details and documentation available. That includes video footage and Dockmaster digital record to demonstrate the status of the freight and that the carrier was not present beyond the expected time frame. Driver-sign in/out logs and other documents are helpful as well.
Tip for future deliveries — If a delay is anticipated, you can negotiate a longer allotment time in advance with the carrier to reduce or avoid freight dwell time surcharges and disputes.
Reconsignment Fee
Definition — This accessorial fee occurs if a driver is instructed to transport freight to another location upon arrival for delivery. The shipper is charged for fuel, lost time and inconvenience.
How to dispute — If you did not instruct the driver to another location, it's important to find out who did and why. Additionally, verify the actual mileage against the shipping invoice and verify who received the shipment at the original and final destination. All this information is helpful during freight disputes regarding accessorial charges. It's quite possible that the charge was a simple error on the part of the carrier.
Tip for future deliveries — Verify the destination's address on your BOL and avoid making changes if possible. If a change is needed, contact the carrier and determine whether a fee will be assessed.
Fuel Surcharge
Definition — Determined by the weekly National U.S. Average on Highway Diesel Fuel Price report, This surcharge covers fluctuating fuel prices. It helps the carrier manage fuel price increases from shipment to delivery date.
How to dispute — If you believe the surcharge to be excessive or if the increase was assessed after delivery, visit the Gasoline and Diesel Fuel Update report from the U.S. Energy Information and Administration website to verify diesel costs.
Tip for future deliveries — Work with your carriers and ask about discounts and reduced rates for repeat business to offset surcharges. Also, a third-party logistics (3PL) providers can provide shipping relief through negotiated prices.
High-cost surcharge or limited access delivery — This is an accessorial fee that carriers assess for ZIP codes that are particularly difficult or costly to pick up from or deliver to — such as downtown or very rural areas.
How to dispute — Check to see if the freight fee was included in your quote. If the address did not change, then you may have grounds for a freight dispute.
Tip for future deliveries — Check your quote and BOL carefully and perhaps ask carriers in advance to provide a list of ZIP codes that require this fee. Also, just be aware this fee exists, and some ZIP codes do in fact trigger additional costs.
Inside Delivery or Pickup
Definition — When a driver goes beyond the front door or loading dock with a shipment, a white-glove freight fee will be assessed. The charge is for the extra time, effort and equipment needed to get the cargo inside.
How to dispute — You will need to provide detailed information on how the freight was picked up and delivered. You will also need a written statement from the consignee that the service was neither requested nor required.
Tip for future deliveries — Communication with the consignee and carrier is imperative. Be sure there is an understanding in advance of how and where the freight will be delivered and ask if there are any special requirements. But remember, a carrier does not have to get permission for inside delivery. If the service is required and the service is performed, accessorial fees are valid and often indisputable.
Liftgate Services
Definition — Accessorial charges are assessed if the driver needs to bring equipment or liftgate at pickup. A liftgate can also be used at any point at the driver's discretion if they feel it is needed. They can do that without notifying the shipper and can apply a liftgate fee to your invoice.
How to dispute — You will need to document how the freight was unloaded (if not by liftgate) or what the consignee had on-site to safely unload LTL freight down from the truck. That may include photos of the loading dock and copies of the delivery receipt.
Tip for future deliveries — Indicate on the BOL what equipment is on hand for loading and unloading and if additional equipment is needed. Also, be sure to understand the special requirements at the location prior to delivery.
Redelivery Fee
Definition — The shipper is charged an LTL freight fee if the recipient denies a shipment or isn't available to accept it and the driver must return later to the site. A fee is assessed for each unsuccessful attempt.
How to dispute — You can dispute this fee if you can prove the failed delivery was the carrier's fault. That includes the carrier delivering to the wrong address or if they tried to deliver outside of your business hours.
Tip for future deliveries — LTL freight shippers can avoid this fee by confirming the details on the BOL with the shipment receiver. You should also confirm their business hours.
Residential Surcharge & Limited Access Fee
Definition — A fee is charged for the challenges and extra time it takes for a driver to pick up or drop off in residential areas. This may apply to any residential address, even if a business is operating out of the house.
How to dispute — You can dispute the accessorial charges by providing documentation to prove that the location in question was not actually residential. That includes information about the building, property tax records and photos of loading docks.
Tip for future deliveries — When requesting a quote, be sure to indicate whether your business is residential or in a limited access area. Talk to your carrier in advance to discuss your business location, and they should know whether a fee will apply.
Reweigh & Reclassification
Definition — If the driver needs to reweigh the shipment and give it a different classification code when loading or maneuvering the cargo, you'll be charged an LTL freight fee for lost efficiency.
How Dockmaster can help — Use Dockmaster to capture the freight barcode, dimensions and weight in an electronic record that can be easily retrieved and shared with your carrier. Dockmaster can be integrated with a weigh scale, allowing accurate weight data to be incorporated in the digital record. Dockmaster will calculate the estimated classification code based on the weight and dimensional data captured, the estimated freight classification is included in the Dockmaster report that can be sent to the carrier.
How to dispute — Carriers are looking for concrete proof of the shipment weight. Shippers must be diligent about documentation, this is where Dockmaster becomes invaluable. In addition to Dockmaster, we recommend organised keeping records of invoices, bills of lading, spec sheets and all other paperwork relating to the shipment. Once in hand, a 3PL can help you dispute the reweigh and reclassification fee. Additionally, if there is no difference between the reweigh and what is on the BOL, then you have grounds for dispute.
Tip for future deliveries — The best way to avoid reweigh and reclassification accessorial fees is by using Dockmaster to accurately capture cargo weight and dimensions and to accurately complete the BOL.
Sort, Segregate & Lumper Fee
Definition — These are accessorial fees assessed when the dock workers, lumpers and/or drivers are required to count and verify the pallets or crates received in an LTL shipping delivery. It can also apply when workers help load or unload the shipment.
How Dockmaster can help — Dockmaster digital record can be used to demonstrate the configuration of the cargo at pickup – photographs are an excellent way to support a dispute on these fees.
How to dispute — Provide the Dockmaster report and details on how the delivery occurred (BOL, invoice and delivery receipt). They will also need to prove that the service was not performed and/or provide a written statement from the consignee that the service wasn't needed or requested.
Tip for future deliveries — Communicate in advance with customers and understand whether these services are required. If so, you can plan accordingly for the accessorial charges.
