Most shipping carriers charge a base rate for standard pickup and delivery, but there are many services that add extra fees, these are known as accessorial charges.
Especially in a soft market, when buyer demand is low, brands need to be careful to avoid any additional fees. There are some accessorial fees that you can project, and others that will come as a surprise.
It’s important to understand what accessorial charges are, how they are calculated, and which ones you can avoid when building your shipping strategy.
How Freight Shipping Fees are Calculated
Shipping and transportation costs can take up a large portion of any ecommerce shippers’ budget. Knowing which shipping service is best for your brand and product is key, and the first step is understanding how your shipping fees are calculated.
A shipping invoice has many components, it may not be intuitive to understand each line item and how it’s calculated. Surcharges that can be added on top of regular rates or base fees, and accessorial charges can be a surprise.
The main components that go into your overall shipping invoice include:
- The base rate. This is the carrier’s rate for standard pickup and delivery.
- Service rates. If you choose to apply any services (like Expedited Shipping, or Signature Required) or your products need to be transported at specific or to specific locations (like Saturday Service, or Delivery Area Surcharge) then you will incur the fees associated with that specific service. Multiple services layered on top of each other will be added up.
- Surcharges. At any time, a carrier can apply surcharges. Historically reserved for times of high volume, surcharges can be applied for any length of time and are subject to change, with or without notice. In the case of fuel charges, they are applied annually to offset the market price of fuel.
- Accessorial charges. These are extraneous charges that are applied when your carrier extends any extra resources to shipping your products. This includes extra time, labor, equipment, or storage.
It’s important to select a shipping service that is right for your brand and your product, but it’s also important to cut out unnecessary charges. Understanding which fees are necessary and which can be avoided will help you lower your overall shipping costs.
Common Accessorial Charges
Accessorial charges may refer to any number of services that are added on top of your carrier’s regular base rate. Here are the most common accessorial charges:
Additional Stops — applied when a shipper adds two or more destinations. Multi-stop shipments can cause delays for other shippers.
Advanced Notice — applied when the carrier needs to make advanced notice to the receiver before making the delivery.
After-hours — applied when deliveries need to be made after standard operating hours.
Detention — applied when a shipment is delayed, for example when waiting to dock.
Diversion — applied when the carrier is instructed to deliver a shipment to a different location, only after arriving at the agreed up on destination. This may be charged in mileage or a flat rate.
Hazardous Materials — applied when hazardous materials are shipped without proper labeling and documentation.
Inside Delivery — applied when a delivery requires the carrier to move the shipment into a house, store, or facility. Also called white-glove delivery.
Layover — applied when a shipment is delayed in being loaded or unloaded during its appointed delivery window and work needs to be resumed the next business day.
Liftgate — applied when a liftgate is required for loading or unloading onto a dock. This is a very common charge, and you should know if this is required in advance.
Limited Access — applied when there is extra time and effort made to find a receiver for the shipment, which adds time to the delivery. This includes if there is an extra inspection or check point when the driver is making the delivery.
Load/Unload — applied when the carrier is asked to load or unload the shipment, either for delivery or to move the products to another truck. Also called a “lumper” fee.
Metro Pickup/Delivery — applied when a carrier needs to drive into or through a crowded area, like a big city or downtown area. It may add time to their delivery route.
Oversized — applied when a shipment takes up more space than a pallet. This requires products to be configured differently.
Reclassification — applied when the freight classification (or other shipping information like DIM or weight) is incorrect or not provided.
Redelivery — applied when a second (or more) delivery attempt is needed. This may be because the destination is closed, there is no receiver, or necessary unloading equipment isn’t available.
Residential — applied when the destination is outside of the standard delivery area, like a residential or rural area.
Sortation — applied if the carrier is required to sort or move any products from one pallet to another.
Storage — applied if the carrier needs to store the shipment for any reason. May be charged hourly or daily rate.
Biggest Causes of Accessorial Shipping Fees
Not all carriers are the same, but most will add fees when extra labor, time, or resources are needed to transport your packages. Here are some of the more common ways accessorial fees can be added and avoided.
1. Documentation issues
If you don’t communicate properly with your carrier, they will charge you for any discrepancies. This includes not properly labeling hazardous materials or dangerous goods, communicating an incorrect delivery destination, improperly classifying freight, or other documentation issues.
2. Additional infrastructure
If your shipment requires a liftgate, special loading/unloading of your freight, sortation, or white-glove delivery, there will be extra charges for the time, labor, and equipment needed to execute these.
3. Extended or difficult areas.
If your products need to go to multiple stops or go into/through congested areas like big cities, there may be accessorial charges added to your bill.
4. Oversized products
If your products are bigger than a pallet, they will need special attention in transportation. This is a common accessorial charge that you’ll know in advance.
5. Timing and delays
If your shipments need to be stored, detained, or picked up/delivered during non-standard working hours, you will incur extra fees.
If you are looking for shipping support, DCL Logistics has many transportation services to help you optimize your shipping strategy and lower overall transportation costs. Reach out for a quote or hear more about how we can support your growing brand.