Avoiding Charge-Backs, Vendor Penalties & Accessorials

Posted by Harriet Mills on Jun 2, 2020 3:02:09 PM

Avoiding Hidden CostsWhether you are shipping truckload or LTL, there are always ways to save costs on your freight spend. One of the easiest things you can do that will have the most impact to your bottom line is to dedicate time to thoroughly evaluate your freight bills. Review every charge-back, vendor penalty, and accessorial fee over the last few months.

 

Your first line of defense should be to identifying repeat offending charges. If you see the same penalties with a vendor, or even recurring fees on more than one shipment within the same month, make the effort to find out why, and then eliminate the charge. Many of these charges are easy to avoid and figuring out a solution to them could save your company substantial costs. 

 

When you analyze your freight spend this way, it may reveal that some receivers are more costly than others to your business. The excess charges can add up over time, eroding your company’s profits in a slow and unnoticed way. Negotiating these fees is not only possible, it should be a regularly practiced exercise to keep costs down.

 

loading_dockBut not all extra costs are necessarily coming from the receiver-end of the transaction. You may need to look no further than your own loading dock. Detention times can add up to costly accessorials and take place on a shipper’s loading dock just as easily as on a receivers. If a truck shows up on time and the shipment isn’t ready, that is something you, as a transportation manager, can control by adjusting schedules. Holiday and weekend pickups also can be preemptively scheduled to avoid inflated fees.  

 

Other common charge-back fees can appear when a shipment is not to the specified vendor protocols, packaged poorly, or delivered to the wrong location. If a product was delivered to one building but was supposed to go just down the street, it can cost time and labor to redeliver. Sometimes it is as simple as how the freight gets loaded or palletized, which affects unloading the truck. Palletization errors can mean the difference between speedy unloading or taking twice as long as it should to deliver the product.

 

Remember, you have a say in the matter. If you feel a supplier penalty or charge-back is too high or simply incorrect, dispute it. In situations where you can provide “proof of adherence,” chances are you can have the fee removed from the freight bill. The problem can be due to something that is simple to correct, such as incomplete or missing information. With high-volume freight passing through multiple hands in an automated environment, these fees are sometimes in error and go undetected.

 

If you discover an excess of charge-back fees from delayed or no-show trucks, then make sure you use a reliable 3PL provider that vets its carrier base. Can delays and no-shows be completely avoided? No, but using a team of knowledgeable freight providers will help ensure that repeat problems are the exception, and not the rule. Monitoring and taking quick action to questionable charges will keep your freight costs down and your vendor relationships on track.

Tags: Cold LTL, Dry LTL, Freight costs, truckload freight shipping, FTL