Freight brokers are incentivized by a percentage of the deals they broker. The bigger the freight load fees, the more the freight broker makes. Accessorial fees, which are added to the standard shipping fees by the carrier, can affect how much a freight broker brings home. So there is a lot of motivation for brokers to avoid unnecessary accessorial fees in order to earn a better percentage.
The Hidden Fees of Hauling Freight: Accessorials Defined
Freight brokers and carriers should have a strong familiarity with all of the potential accessorial fees that could be added to a shipment. Although these fees can be necessary for some circumstances, careful planning can help avoid them. When brokers and carriers avoid adding these fees, shippers are more satisfied because their bottom line looks better.
Accessorial fees cover everything beyond the standard pick-up and delivery operation, including the line haul charge and fuel surcharge.
There are many different charges, and not all shipment deliveries will need to use all of them. That said, they can be applied to all kinds of freight and can be charged as a one-time fee or on an escalating daily basis.
As a carrier, you should know that it can be frustrating for shippers and freight brokers alike to not know about accessorials until the shipment is already complete and fully invoiced. For example, if freight is delayed or detained for a reason outside of a carrier’s control, the carrier will likely add an accessorial fee. These fees are often unanticipated by shippers and brokers and can significantly impact on their bottom line since they are not automatically calculated into the initial fee. And we can all sympathize that getting paid less than you expected can be a frustrating and discouraging experience and negatively affect relationships.
Being upfront about any necessary accessorial fees will help you build a reputation for honesty and transparency and a better relationship with shippers and brokers. This will help you get more freight contracts in the future with partners who love working with high-quality carriers—and communication here is key since it will impact your relationship and the overall bottom line.
Most Common Types of Accessorial Fees
Common types of accessorial fees include:
Additional Stops/Destination Change
Multiple stops require more time and labor, and consequently results in an accessorial fee.
This fee is added when the carrier has to reach out to a consignee to make contact before the delivery.
Deliveries that occur after hours can mean extra work for the carrier from tracking down company representatives and accessing locked facilities.
Detention charges apply whenever a carrier is delayed at the location of the shipper or receiver for any reason.
Diversion miles are miles driven when a carrier has to go to a different location than initially assigned.
The current price of fuel determines the fuel surcharge. This surcharge gives the carrier a buffer so that they don’t have to forecast the exact cost of fuel in advance.
This fee is based on any materials that the Department of Transportation identifies as hazardous.
If a shipment needs to be unloaded into a house, there are likely additional equipment needs, such as pallet jacks, as well as more physical labor.
If the truck is unable to be unloaded on the scheduled delivery day, layover fees may be added.
This fee is assigned when the carrier’s truck must be fitted with a special hydraulic lift. This is usually needed if you choose a carrier whose trucks don’t already have hydraulic lifts to deliver a load that needs to be raised and lowered at the pick-up or delivery point.
When a carrier has to access a location like a government facility, prison, school, healthcare facility, or camp, they will need to go through extra security clearance. This leads to a limited access fee being assigned.
Lumper or Driver Load/Unload
Carriers don’t typically unload freight. If they need to unload freight for any reason, they can charge for their time and labor.
Just like a residential neighborhood brings additional challenges to the delivery process, so does delivery in a busy metro area.
A large load costs more to transport. The oversize/overlength fee accounts for the time and work of calculating the load configuration and any additional tasks necessary to move the larger load.
Reclassification and Reweight
These fees are only applicable for LTL (less-than-truckload) freight loads. The base rate for an LTL shipment is determined by weight, dimension, and classification. When these details are wrong or missing, the carrier will add a reclassification and reweight fee. The best way to avoid this specific fee is to ensure that all of your shipping details are completely accurate.
If no one is available to accept the delivery, or if the receiver rejects the shipment, it will need to be redelivered at a later date or time. This affects the carrier’s ability to start their next job, which explains the fee.
Just as navigating through a busy metro area poses additional challenges, maneuvering a freight vehicle through a residential neighborhood is difficult and can lead to additional fees.
This fee is added when the driver must move parts of the shipment from one pallet to another.
If the carrier must store the freight, the fee for that service can be calculated hourly or daily.
Truck Ordered Not Used (TONU)
When an order falls through, a typical carrier contract will allow for a TONU. However, if the cancellation occurs after the pre-established cut-off, a charge will be assigned.
The average income potential of a freight broker, including variable compensation, can range from $40,000 – $65,000+ per year, based on location. Commissions are incentivized by a percentage of the deals they broker.
Today’s freight industry technology is changing how freight brokers and carriers implement shipping charges and accessorial fees. Better planning means that drivers don’t have to lose time to errors and delays. While some situations are certainly unpreventable, carriers can get a great reputation for honesty and transparency when properly representing and providing details to any extra charges at the end.
Xpress Technologies is paving the way for easier operations and higher profits. Shippers get more for their money, and carriers have a more pleasant work experience.
Check out our free checklist about how to find a qualified freight broker to work with. This checklist will help you prepare to work with a freight broker, build a strong broker/carrier relationship, and get the best loads possible.
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