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LTL Bill of Lading - Avoid surprise fees!

Posted by Marc Wojnowich on Aug 1, 2018 9:11:35 AM
Marc Wojnowich
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It’s 2018, what seems to be the year of LTL Carrier Strength. That being the case, carriers are not missing the opportunity to increase revenue every chance they get.Accessorial Fees

So how can shippers avoid a surprise lift gate, limited access, residential or overlength charges among others? How can shippers be sure that when they quote freight to their customers, they don’t have to go back asking for more?

Our recommendation--- GET IT RIGHT BEFORE IT LEAVES YOUR DOOR!

So how do we do that? It starts and ends with your Bill of Lading.

  • Origin and Destination Addresses
  • Additional Services Needed to make Delivery: Accessorials
  • Freight Terms & Bill To
  • Commodity and NMFC Details

Each bullet point above is an opportunity for a shipper to make a mistake and a carrier to add charges to your bill.

ORIGIN AND DESTINATION

Pretty simple, right? Not if the Origin address is not recognized in your carrier pricing. Often carrier pricing agreements are tied to very specific Origins; otherwise, it could be designated Third Party (learn more about Freight Terms HERE). And if your pricing agreement does not have Third Party pricing accounted for, you could be in for a rude awakening.

Just recently, this exact instance occurred taking a rate from $300 to more than $4000. Now, in instances this extreme, carriers will typically work with you to some extent, but who wants to stress over that? 

Do you know your consignee?

Ever entered a completely wrong address on a BOL and had to call a carrier to request they deliver somewhere else? Reconsignment Fees… Do your best to address your BOL correctly the first time! Don’t ship to a Headquarters when it should go to a Distribution Center.

That leads us to knowing your destination, so you know specifically, what Accessorial services are needed to make delivery.

ADDITIONAL SERVICES NEEDED TO MAKE DELIVERY: ACCESSORIALS

How often are you frustrated by the Lift Gate charge on a freight invoice that you did not request? More times that not, it was used by the carrier because there was no other way to make the delivery.

How can you avoid this? Start by asking the “right” questions of your customer and research your delivery location.

  • Don’t ask, “Do you need a lift gate?” Customer may not know what that is or why you would need one… Instead, ask, “Does your location have a loading dock?”
  • Ask, “will someone be available to unload the truck and what are the hours you can receive deliveries?”
  • It may seem obvious, but confirm not delivering to a Residence. If you think it’s a silly question, you might be surprised how frequently clients ship to XYZ, Inc. and it’s a home business. If you do not want to ask, use Google Earth! Matter of fact, the ReconTMS allows a quick view straight from the Destination entry screen (see image below)!

Consignee Destination Google Earth View

  • Lot to learn from this image… It’s an actual delivery location. Is this residential? Construction? Is there a dock? Will inside delivery be needed?

By getting this right on the BOL, you avoid having to go back to your customer to charge more. Or maybe you avoid a difficult conversation, explaining to your supervisor why a $86 shipment became $286. Or more!

 FREIGHT TERMS AND BILL TO

In a previous post, we provided all the details explaining the difference between Freight Collect, Prepaid or Third Party. If you need a refresher, you can download our Freight Terms Guide here: FREIGHT TERMS GUIDE

Meanwhile, even if you get the Freight Terms correct, if the Origin address on your Outbound, Prepaid shipment is not the same as what LTL Carrier XYZ recognizes in their account setup, you could possibly be rated as if a Third Party shipment. In today’s marketplace, it is rare that your Third Party Pricing is the same as your Outbound Prepaid or Inbound Collect . Get it right!

Same goes for the Bill To information. Bill to information on the BOL guides the LTL Carrier where the invoice is to be sent and also must match the expectation of the carrier.

It is not unusual for a shipper to have multiple accounts with a carrier due to some change in the past. Maybe a new Carrier Rep or possibly a change in 3PL. In most cases, the carrier's first reference to find your account and hence your pricing, is the "Bill To." Avoid the risk of a BOL Correction Fee, get it right the first time. 

COMMODITY AND NMFC DETAILS

More common than just about any other surprise charges on a LTL freight invoice are the Reweigh and Reclass charges.

With regard to Reweighs, I'll keep this really simple. Buy a scale, calibrate it professionally on a regular basis and use it.

In some cases, not only is the shipper charged for the additional cost of a higher weight or class, but an Inspection Fee is added as well. While this is one of the more frustrating fees, it can also be avoided by supplying accurate descriptions of the commodity per the NMFC description as opposed to a description of your SKU or Item.

Reclass --- Do not leave it to the carrier to determine the class. Enter an accurate class including the description precisely as detailed in the NMFC. If the carrier must research due to a vague description, they will find a class that is likely higher than the one you chose, and it may be difficult to argue.

Same goes for entering a Freight Class without any NMFC #. Always include the NMFC # and descripition. If you need a refresher on NMFC descriptions and Class, check out: FREIGHT CLASSAvoid Overlength Fee Measure Freight Dimensions

Know your carriers’ application of density and overlength rules. While some carriers shift to Volume Pricing when greater than 750 cubic feet with a density less than 6, several carriers have shifted to max 350 cubic feet with density less than 3. If your shipment is falls in outside of those ranges, your LTL pricing will not apply, and your cost will multiply based on various carrier specific rules.

Last, does your carrier consider a single item “overlength” at 8 ft or 12 ft? Not unusual for an $85 charge to be added if that or longer … need to know which it is.

IN CLOSING

Don’t ask for surprises… take the time to get it right before it leaves the door. While carriers are using technology to capture shipper errors, shippers can counter using technology of their own. Take advantage of a solid TMS that can prompt you with warnings if your shipment is likely to have additional charges.

If you have an 11 ft pallet, your TMS should warn you by carrier, that an Overlength Fee will be added. 

Extra costs can be avoided, but shippers must take the time to get the details on their Bill of Lading right before the shipment gets in the carrier's hands. 

Do you have questions? Need guidance on a specific frustrating new fee you are dealing with? Call or write at your convenience and a Recon Team Member will do his or her best to guide you in the right direction!

Tags: transportation management, Rules Tariff, LTL, Density, Freight Class, Freight Terms, LTL Pricing, Accessorials, Overlength, Freight Tariffs, Ship Smarter, LTL Carrier, Bill of Lading, Reweigh, Reclass

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