What Are Accessorial Charges and How To Avoid Them

In the world of shipping and logistics, the efficiency of moving goods from point A to point B is of utmost importance. However, there’s a factor that often creeps up and catches businesses off guard – accessorial charges.

These are extra surcharges that carriers may impose for various situations beyond standard transportation, leaving businesses with a price that exceeds the initial rate.

In this article, we will delve into accessorial charges, provide an overview of common accessorial charges, and share valuable insights on minimizing or avoiding them.

What Are Accessorial Charges

Accessorial charges, simply put, are extra fees or surcharges that carriers may add to the base shipping rate for services and circumstances outside the standard shipping process.

These charges are designed to account for additional resources, time, or complexity involved in handling, delivering or picking up specific shipments. While they can inconvenience companies relying on logistics, they are a necessary part of the industry, as they compensate carriers for the extra work and resources required.

Common Accessorial Charges

Accessorial charges can vary from carrier to carrier, but there are several common ones that businesses should be aware of. Let’s take a closer look at some of these charges and their breakdown:

Carbon Surcharge: This surcharge, applicable to shipments in Canada, is based on a percentage (e.g., 1.56%) of freight or heat charges. It compensates for the environmental impact of transportation and is subject to increases when government carbon taxes rise.

Cost Recovery Ferry Charge: If your shipment involves ferries, whether it’s the origin or destination, a ferry charge may apply to cover the additional costs associated with this mode of transport.

Labour (Lumper) Charge: When consignees require special delivery services like sorting, segregating, or reconfiguring the product at the delivery location, a labour charge is applied.

Detention – Unloading or Driver Waiting Time: This charge comes into play when drivers or vehicles are held up or delayed at the pickup or delivery location while the shipment is being loaded or unloaded. It compensates for the time and resources involved.

Inside Delivery: An inside delivery charge may apply for deliveries requiring handling freight beyond an unloading dock, such as basement or upper-floor delivery. Additional floors beyond the second floor or below the basement are typically charged extra.

Lift Gate (Tailgate) Charge: A lift gate charge is added when the delivery location lacks a dock facility and a power tailgate is needed to unload cargo.

Overtime & After-Hours Pickup or Delivery Charge: Shipments that require services outside regular business hours, such as pickup, delivery, interchange, or transfer, incur an extra charge for the added labour and resources.

Pickup Tag Charge: A surcharge may apply when arranging a return parcel with labels and tags.

Redelivery Charge: A redelivery charge is imposed if a shipment needs to be redelivered to the same address due to a consignee error or request.

Residential Surcharge: Shipments delivered to private residences or locations without designated docks or receiving areas may incur a residential surcharge.

Peak Season Surcharge: During peak shipping seasons, carriers may impose additional charges on parcel shipments to cope with increased demand and resource requirements.

Trailer Drop Charges: A specific charge applies for full-truckload (FTL) shipments where the consignee requests to drop off a trailer.

Truck Ordered, Not Used (TONU): If a truck is ordered and dispatched for pickup but not used for service, this surcharge is applied to cover the cost of the unused resources.

Storage Charge: A storage charge is imposed when a consignee requests the delivery of freight on a specific day, and the carrier needs to store the freight in their facility.

These are just some of the common accessorial charges that businesses may encounter in their shipping and logistics operations. The specific charges and their amounts can vary depending on the carrier and the circumstances of the shipment.

Avoiding Accessorial Charges

While accessorial charges are a standard part of the logistics landscape, businesses can take steps to minimize or avoid them. Proper planning, forethought, and working with a reliable carrier are critical to achieving this goal.

Here are some key tips on how to reduce accessorial charges:

Accurate Package Dimensions and Weight: Measure and weigh your packages accurately before shipping. Ensure that the dimensions and weight declared match the actual contents. This prevents discrepancies that can lead to unexpected charges.

Correct Address Information: Provide accurate and complete address information for both the sender and the recipient. Include any necessary additional details, such as apartment numbers or suite information. Accurate addresses help ensure smooth deliveries.

Proper Packaging: Pack your items securely to prevent damage during transit. Follow carrier guidelines for packaging to avoid additional charges related to damaged goods.

Clear Labeling: Clearly label your packages with the shipping label provided by the carrier. Ensure the label includes all necessary information, reducing the risk of misdelivery or delays.

Timely Pickup and Drop-off: Schedule pickups or drop-off packages on time to avoid delays that may lead to extra charges. Being punctual helps maintain the efficiency of the shipping process.

Use the Right Service Level: Choose the appropriate shipping service level based on the delivery time frame you need. Selecting expedited shipping when standard delivery would suffice can result in higher costs.

Be Aware of Surcharge Triggers: Understand the specific surcharge triggers for the chosen carrier. For example, some carriers may charge extra for residential deliveries or deliveries to certain remote areas. Being aware of these triggers can help you plan accordingly.

Negotiate Carrier Contracts: If you are a frequent shipper, consider negotiating shipping contracts with carriers for better rates and terms. Long-term agreements can provide cost savings and predictability. While negotiating your freight rate be sure to ask for a list of possible accessorial charges and the respective cost of each accessorial.

Stay Informed on Carrier Policies: Keep yourself updated on the policies and guidelines of the shipping carriers you use. Carriers may update their terms, and knowing these changes can help you avoid unexpected charges.

Utilize Technology: Use shipping software or platforms to help you automate the shipping process and reduce the likelihood of errors. Automation can streamline operations and reduce the risk of costly mistakes.

Monitor Shipments: Track your shipments in real-time to address any issues promptly and avoid additional charges. Timely intervention can prevent problems from escalating.

Address Customs Documentation: If you are shipping internationally, ensure that all required customs documentation is complete and accurate to avoid customs-related fees. Proper customs documentation is crucial for international shipments.

Partnering With An Experienced 3PL Provider: The reason why partnering with a 3PL Provider is important is because they are aware of all these charges and regularly implement other tactics to help you avoid them. The 3PL has a wide network of carriers to choose from, and you know which ones are the most reliable and best for your specific situations.

Conclusion

In conclusion, accessorial charges are a reality in the world of shipping and logistics, but with the right strategies and practices, businesses can minimize their impact.

Accurate information, proper planning, and a solid partnership with a reliable carrier can greatly reduce accessorial charges. By implementing these tips, businesses can optimize their shipping processes, improve cost-efficiency, and ensure smoother logistics operations.

For high-quality, efficient, and transparent logistics solutions, consider contacting PiVAL. With two decades of experience in the industry, PiVAL is your trusted partner in navigating the complex world of shipping and logistics.

Contact us today to discover how we can help you streamline your supply chain and minimize accessorial charges.