Accessorial Fees for Shipping
Accessorial charges or fees are generally defined as additional charges or surcharges assessed by the carrier for additional services beyond basic shipment delivery. Accessorial charges are commonly assessed by carriers in many transportation modes including parcel, less-than-truckload and truckload shipping. They can encompass a wide range of services such as:
- Residential deliveries
- Address corrections
- Liftgate services
- Freight reweigh and reclassification
- Advance ship notification
- Signature requirements
- Metro pickup or delivery
- Inside delivery
- Over-sized or over-length shipments
- Additional steps
- Fuel surcharges
- After-hour delivery
- Border crossings
Who Pays for Accessorial Charges?
Typically, the consignee is charged for shipping, although in recent years Free shipping has become a big selling point in the e-commerce marketplace. Outside of e-commerce, the consignee is still charged for the vast majority of shipping charges.
In order to charge the consignee, shipping systems are typically used to calculate the shipping charges at the time of shipment. These charges are then passed back to the WMS or ERP to be added to the client’s invoice.
As many accessorial charges occur after the shipment leaves the shipper, it is important that that a shipper ask the consignee or buyer if they will need any of these services or alternatively, request that after the first incident records are kept and transmitted to the shipping system so these charges can be added in at the time of shipping.
Accessorials Can Add Up to Significant Costs
Accessorial charges can add significant costs to a shipper’s overall freight invoice, and result in sudden spikes in costs if they are not accurately when a shipment’s delivery cost is being calculated or added by the carrier during delivery.
About 35% of companies’ overall shipping spend is eaten up by surcharges, according to shipping intelligence service Reveel’s research.¹
For a shipper, absorbing these accessorial charges once may be unavoidable. However, continuing to absorb them after the first invoice shows that they will be charged is avoidable. It is not unusual for larges shippers to pay over a million dollars a year in accessorial charges per year. In these cases, it would be well worth the time to hire someone to audit, update and manage the shipping accessorial charges.
Are Accessorial Fees Standard in the Shipping Industry?
Accessorial fees vary in cost between carriers and can change at any time. Multi-carriers such as the USPS, UPS and FedEx may pre-announce upcoming surcharges such as holiday delivery fees, but this is not a guaranteed practice by all carriers.
You can eliminate the risk of unexpected accessorial charges on your freight invoice by using a multi-carrier shipping system that is configured for accurate shipping rates and accessorial calculation pre-shipment, while the order is being fulfilled.
When your shipping system is integrated with address validation software, it can provide upfront address corrections and monitor for shipments incorrectly flagged as residential or commercial deliveries – which will result in another surcharge if the carrier fixes the problem.
A multi-carrier shipping system should compare carrier services, times-in-transit, rates and surcharges when calculating total delivery cost. This is the best way to monitor and control overall freight costs.