Accessorial Charges 101: Everything You Need to Know
Accessorial charges are an essential part of the less-than-truckload (LTL) shipping process. These fees can significantly impact your bottom line if they’re not properly accounted for and mitigated. Here’s everything you need to know about accessorial charges.
What Are Accessorial Charges?
Accessorial charges are add-on fees applied to LTL shipments for services beyond basic transportation. These services cater to specific needs that arise during the hauling process, such as making additional stops or adhering to special handling requirements.
Why Do Accessorial Charges Matter?
Accessorial charges matter because they can significantly add to your shipping expenses. You’ll face overruns and reduced profitability if you don’t factor these fees into your budget. By being aware of potential accessorial charges, you can plan better and manage your shipping budget with precision.
How Are Accessorial Charges Incurred?
You may incur accessorial charges when you ask for additional services beyond standard pickup and delivery. These services may be requested based on your preferences or necessity because of the circumstances during the shipping process.
Common scenarios that may lead to accessorial charges include requiring a liftgate or inside delivery. You may also incur accessorial charges for making an appointment with the recipient.
Common Types of Accessorial Fees
Here are some of the most common accessorial charges that LTL shippers use:
Liftgate Service
You’ll need this service if either your warehouse or the receiver doesn’t have a loading dock or forklift to unload freight. Unloading goods via a liftgate takes longer and slows down other deliveries, which is why LTL shippers apply additional fees for the service.
Inside Delivery
Inside delivery charges apply when a driver must move the shipment beyond the curb or dock to an inside location. You may need this service when scheduling deliveries to office buildings, schools, or residential areas.
Limited Access Delivery
A limited access delivery applies when a location cannot easily be reached. Examples include construction sites, military bases, prisons, and locations without the equipment necessary to unload freight.
Residential Drop-Off
Delivering goods to a home or location without the typical shipping and receiving process takes extra time and effort. Residential drop-offs often involve accessorial fees to offset these complexities.
Appointment Delivery
Appointment delivery fees are charged when the driver must schedule a drop-off with the recipient. This is common practice for businesses with strict receiving hours.
Diversion
Diversion, also known as reconsignment, occurs when the shipment’s delivery destination is changed while in transit. This can happen if you provide the wrong delivery address or the recipient requests a new drop-off location.
Detention
Detention fees apply when the carrier’s truck gets held up at the pickup or delivery location for longer than the agreed-upon time. This can happen due to delays in loading or unloading.
How You Can Cut Back on Extra LTL Charges
Minimizing accessorial charges involves careful planning and clear communication with your carrier. Here are a few tips for keeping LTL add-on fees to a minimum:
Provide Accurate Information
Make sure you provide your carrier with all the necessary details about your shipment, including the pickup and delivery locations. Make sure to convey any special handling requirements.
You should also specify whether a liftgate or inside delivery is needed. Your carrier may still charge extra for using the liftgate, but you will be aware of these fees from the beginning, which can help you budget accordingly.
Schedule Deliveries During Regular Hours
Avoid after-hours drop-offs unless absolutely necessary. Scheduling deliveries during normal business hours will drastically reduce your accessorial fees. Keep your customers in the loop and ensure that someone will be available to receive the freight when it arrives.
Use Commercial Addresses
Use a commercial address for shipping and receiving to avoid residential delivery charges. If you have to schedule residential deliveries, gather information from your customers, such as check-in procedures and gate codes.
You’ll still incur residential accessorial charges when you take these steps. However, you can cut down on detention fees by helping the driver avoid any delays.
Manage Your LTL Shipping With R2 Logistics
Accessorial charges and other add-on fees can drive up the costs of LTL shipping and eat into your profit margins. By partnering with R2 Logistics, a leading third-party logistics (3PL) provider, you can simplify less-than-truckload shipping and keep costs down. Contact our team for a quote.
