Less-than-Truckload (LTL) accessorials compensate carriers for services and equipment beyond the basics. You can’t prevent all of these charges, but you can take steps to reduce them.
If you want to understand the idea behind LTL accessorials, think about building a house. The builder leverages their volumes to lower costs for items like backsplashes and fixtures, for instance.
Most likely, they have chosen products that are simple to install, too, for added efficiencies and cost savings. But say you don’t like the type of faucet they’ve chosen, or you want to upgrade to a marble backsplash.
Each upgrade and change is a departure from the usual; it takes resources and time for the builder to hunt down the products you’re looking for and install them as one-offs. These additional requests and upgrades are going to cost you extra.
This is very similar to the way LTL accessorials work. The LTL carriers measure operating ratios very carefully to understand the profitability of hauling each customer’s freight.
When the shipper’s freight characteristics, processes, or equipment requirements go beyond what is considered standard for pickup and delivery, accessorials may be charged to address the inefficiencies it creates for the carrier.
8 Tips for Mitigating Accessorial Fees
- Expect the carrier to recoup the cost of accessorials. Shippers should ensure that line haul rates are decoupled from accessorials so they can investigate and mitigate unnecessary costs. Shippers who do so can save; if 80 percent of their freight wouldn’t normally have accessorials, they can pay a consistent line haul rate for the bulk of their freight, and pay accessorials only on the shipments that require it.
- Understand the real frequency of your accessorials before trying to get these charges waived. If you know the true frequency of accessorials as a percentage of your total LTL volumes with carriers, they will be more receptive to a request to negotiate. Shippers with many accessorials or significant accessorials of a particular type can try taking part of the workload off the carrier in exchange for concessions.
- Stay abreast of changing classifications. NMFC classifications are based on the freight’s density, stowability, handling, and liability. Penalties for errors are increasing as classes change to reflect the trend toward products that are lighter weight, but consume more space on trucks and are of significantly higher value liability for carriers.
- Accurately define the consignee. Know exactly where the freight is going and what kind of challenges the carrier will have delivering it, and tell the carrier before they take the shipment. A delivery to a residence has different delivery requirements than a warehouse.
- Understand what is in the carrier’s rate and rules tariffs. Carriers typically list their accessorials in their tariffs. Shippers should be aware of these accessorial definitions and fees. But carriers can change accessorial fees at any time without notice, so companies should keep a close eye on the tariffs or have a 3PL watch the charges for them.
- Bring operational efficiencies to the carrier. Helping carriers become more efficient can make them more inclined to consider waiving accessorials.
- Make the right carrier selection. Some carriers will waive accessorials such as late night delivery charges if doing so fits in with other requirements of their service network.
- Get help. 3PLs can’t help shippers avoid all accessorials. But they can negotiate standardized accessorials across all carriers, advise about class changes, offer best practices, explain charges ahead of time, and recommend options like consolidation that might reduce costs. 3PLs work with many consignees; they can share delivery requirements and report receivers who have frequent accessorials to shippers, who may be able to bill back for those charges.
Definitions and charges for accessorials generally appear in the rules tariff of each LTL carrier and are typically available on their website.
Some common types of accessorials that are often brought up for discussion include the following:
- Administrative. Accessorials that occur at the carrier’s terminal as a result of bill of lading (BOL) errors or omissions can slow down transit times and add costs to the shipment. These shipments must be pulled out of transit while they are being corrected and addressed. Shipment verification, reweigh, or inspection are some of the most common charges seen, and they are easily avoidable. Actual gross shipment weight, class, and National Motor Freight Classification (NMFC) number are key components to a clean LTL BOL. Most carriers allow leniency of about 15 pounds weight variance from what their scales show for weight compared to what the BOL states. NMFC numbers, along with class, properly identify a commodity’s transportability; when left off the BOL, the carrier may apply the highest class available for that commodity.
- Delivery. This category of accessorial occurs while the shipment is out for delivery. The most common fee—redelivery—occurs when the carrier attempts to deliver and the consignee turns them away for any reason without unloading the shipment. Frequently, redelivery fees occur because the consignee requires a delivery appointment, but the BOL doesn’t indicate that an appointment is required, so the carrier did not schedule one. Redelivery charges can also occur if the driver must wait at the shipper, supplier, or consignee location and then must leave to meet their next appointment before they can be loaded or unloaded. Due to the nature of their business model, LTL carriers rarely can afford to wait for more than 30 minutes. Another relatively new delivery surcharge, Metro Pickup/Delivery, occurs when the LTL carrier must drive around in a major metro area. Bad traffic, tolls, one-way or narrow streets, tight receiving docks that can only accommodate straight truck deliveries, and other factors can cause longer pickup or delivery times than expected. When that occurs, or when carriers must service remote locations like the Florida Keys or the Upper Peninsula of Michigan, carriers charge this accessorial to compensate for the extra time required.
- Equipment. This accessorial encompasses additional equipment needed for delivery such as liftgates, forklifts, or pallet jacks. Carriers typically have a limited quantity of this type of equipment at each terminal and must carefully schedule it for daily deliveries. If the shipper fails to advise the carrier in advance of any equipment requirements on their BOL, the shipment will go out for delivery and have to be returned to the terminal until equipment becomes available. In that case, the shipper not only pays this accessorial, but most likely will be charged redelivery fees.
LTL accessorials are not necessarily a bad thing. Shippers who slow the driver or the transportation, administration, or back office processes are appropriately charged such fees so that carriers can be reimbursed for lost productivity. Ideally, this allows for competitive line haul rates for the shippers or shipments that don’t require accessorials.
You cannot prevent every accessorial, but you can mitigate and better manage some of them. Set a reminder to review each carrier’s rules or rate tariff quarterly, since charges can change at any time, without prior notice.
When accessorials occur, look for the root cause of the charge to see if there are patterns. If you encounter many of the same type of accessorial, you may be able to prevent them by considering shifting to other modes that aren’t always affected with the same accessorials, such as LTL consolidation.