More Audits & Less Credits = Greater Losses for your Business
Generally, carriers are aware that most companies do not plan for accessorial-related expenses. It is also reasonable for you to assume that carriers don’t want you to plan for it. When you don’t consider accessorial expenses upfront, it gives your carrier more opportunities to make up for any “losses” they might accept during contract negotiations.
You might be surprised to know that accessorials are often accumulated during internal carrier audits. In some cases, carriers even hire outside consultants to work on-site and look for instances to which accessorials can be applied. These consultants may even be compensated based on the amounts of accessorials accumulated.
Adding to a company’s prospective problems as it pertains to shipping is another trend: fewer credits for accessorials.
Carriers have become adamant about not crediting shippers for accessorials, even when shippers make the claim that accessorials were charged needlessly or erroneously. Carriers are also increasing amounts charged and expanding the range of zip codes in which accessorials can be applied.
From all angles, when it comes to accessorials, it appears that carriers are making a concerted effort to charge more and compensate less.
Don’t Get Mad, Get Proactive
As you seek to manage supply chain costs, you’ll soon understand that most carriers are using accessorials to make money — and it isn’t a reason to get angry; it’s a reason to take action.
By performing thorough analyses of your company’s shipping history and characteristics internally or with the assistance of a qualified third party, it is possible to see that your accessorials are discounted or waived entirely.
Other things you can do to begin reducing your accessorial spending immediately, include:
1. Being more efficient at the time of manifest by measuring boxes accurately, weighing all shipments, and making traceable adjustments that will give carriers less opportunities to tack on accessorials and give you the leverage you need to better dispute erroneous accessorials.
2. Using scanning equipment to automate data entry as it applies to specific shipment credentials such as weight, dimension, res indicator, etc.
3. Implementing a third-party pre and post-auditor to monitor your weekly invoices and help you secure refunds when you are charged incorrectly.
Don’t let carrier billing tactics get you down.
By making it a priority to manage supply chain and logistics by optimizing processes, implementing cost-saving ideas, and creating solutions, you can combat the accessorials that may be causing you to go over your shipping budget or forcing you to cut corners that you don’t need or want to cut.
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Photo: 7 Diamonds
Jerry Lucente is the Managing pPartner and Chief Operations Officer at BridgeNet Solutions, Inc., a Chicago, IL-based supply chain technology solutions firm. Prior to forming BridgeNet, Jerry was a member of the UPS management team. Today, he oversees BridgeNet’s daily operations and seeks supply chain savings opportunities for clients around the world.
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