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How to reduce the impact of accessorial charges

accessorial charges UPS FedEx

Shipping isn’t as simple as it once was. If you’re worried about the implications of carrier rate increases, surcharges, dimensional weight and other rising shipping costs on your bottom line, a recent survey from Parcel shows you’re not alone. Many people have been startled by the unexpected charges on their invoice.

In the carrier service performance survey, Parcel asked participants, “What is your biggest complaint about your primary domestic parcel carrier?” Accessorial charges took the lead, with 35.7% of respondents choosing this option as their biggest complaint about their primary domestic parcel carrier. Followed by general pricing, with 16% of participants listing it as a complaint.

Who can blame them? There are over 100 different accessorial charges to be aware of when shipping and some of the most common include Dimensional Weight Pricing, Fuel Surcharge, Residential Surcharge, Delivery Area Surcharge and Extended Area Surcharge. Accessorials account for a large percentage of carriers’ total annual revenue. Because carriers use these charges to pocket money from customers no incentive currently exists to reduce accessorials. The fact is, just like the telephone companies, hotels and airlines, parcel carriers are counting on accessorial fees to make them money.

Often considered “value-added” service charges, accessorial charges add up quickly if you’re not careful. The trick is to understand how major carriers like FedEx and UPS structure extra fees so you can reduce surprises on your bill at the end of the month. Accessorial charges aren’t going away anytime soon. Here are a few steps to combat accessorial charges.

Efficiency is everything

Carriers are hoping to cash in on your carelessness. Measure boxes accurately, weigh all shipments and make traceable adjustments to eliminate the possibilities of accessorials. Increasing efficiency in these areas will give you the leverage to dispute inaccurate accessorials. There are less predictable accessorials that usually include fuel, residential and delivery area surcharges—particularly if the destination is a rural location.

Activate automated shipment audit and recovery

Shipping costs are extremely complex and the number of accessorial charges is dizzying. Remove the stress of auditing shipments yourself by allowing Share A Refund to perform a comprehensive audit. Share A Refund ensures every charge on an invoice is accurate and supplies data to advance your business. The data secured from parcel audit automation leads to business intelligence that will help reduce shipping costs. Data analysis and reporting gives you the power to easily query, analyze, report and export your logistics information. This function is indispensable for tracking expenses and implementing cost-reducing changes.

Negotiate a better contract

With price being one of the main concerns made in the survey, it’s important shippers negotiate their carrier contracts to achieve the best results. Share A Refund leverages industry insights and data analytics to save you 10-120% on shipping.

Curious how much money you’re leaving on the table? Sign up to speak with a contract optimization expert today.

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