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Accessorial Service Charges: The LTL Nightmare

Posted on April 17, 2008 by Jeff

Here’s the scenario…

Customer places an order for a DeWalt DG2900 Heavy-Duty 2900 Watt Gas Generator. The size and weight of the generator require that the order ship LTL or “Less Than Truckload”; LTL is commonly referred to as freight. At the time the order was placed this particular model was out of physical stock. In an attempt to go that extra mile for the customer we shipped the order direct from the manufacturer and third party billed to our LTL account (carrier to remain unnamed).

The order processed and shipped from the manufacturer as expected. However, going that extra mile proved a long walk.

What we didn’t know at the time the order shipped was that the customer’s ship to address was a construction site. You might ask “why not?” Good question! Ask your carrier to present you with their additional fees schedule and they’ll present you with something called “Accessorial Service Charges.” It can be pages long: corrected Bill of Lading, detention of vehicle with power, lift-gate service, and residential delivery just to name a few. Several of these charges are dynamic charges, like “fuel charges”, which are calculated in real time and change regularly. If you attempted to identify every possible scenario at the shopping cart for checkout, shopping cart abandonment would go through the roof, due to excessive over estimates for shipping.  This creates a hole in the system that will continue to siphon funds if not corrected.

One of these Accessorial Service Charges is what’s referred to as “Limited Access Pickup or Delivery.” The additional note is “churches, construction sites, schools, etc.” Who knows what etc. refers to, possibly the driver’s whim? Did you catch construction sites? The long walk begins. At the time of delivery, the driver tacks on a limited access pickup or delivery fee as well as a corrected Bill of Lading fee to be paid at the time of delivery by the consignee or customer. As you might guess the personnel at the delivery site generally have no authority or means for paying these additional fees. The delivery attempt is abandoned by the driver and we are quickly contacted by our customer. I assure you this is NOT the customer experience is shooting for.

You see, the Bill of Lading that is generated at the time of pickup is the contract between shipper and carrier. Once in transit, all additional responsibility, not identified prior to shipment, is the burden of the consignee or customer. And by the way there is now a “redelivery” fee assessed, because the initial delivery attempt was abandoned. In this case, as the shipper, the only way to remove these charges as a customer burden was to refund the customer’s credit card for those fees. The customer still had to make the extra effort of ensuring funds were physically available at the time of redelivery.

The moral of the story is when you plan to go that extra mile for the customer, make sure you complete the journey. We’ve since done the extra work to amend our LTL contract to include all accessorial services as the burden of the shipper, removing any responsibility of the consignee. There is more work to be done to insure we are covering actual shipping costs at the shopping cart, but the customer experience is now intact.
By the way, by amending your LTL contract to include all accessorial services as the burden of the shipper, you’ll also then save yourself the “corrected Bill of Lading” and “redelivery fees”. Hole PLUGGED!



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