Typical freight shipping costs include a subtotal, also known as line haul charges, which reflects an LTL carrier’s base rate along with the specific variables of the shipment (total weight, freight class, and number of transit miles.)
Freight accessorial charges were originally introduced to account for carriers’ additional labor and time when shippers need services beyond standard pickup or delivery. The basic premise was that line haul charges were for a “normal” pickup and delivery. Normal was defined as the carrier showing up, loading freight on the truck, and delivering to a dock somewhere.
Everyone knew that “extra” meant inside delivery, residential delivery, sort, segregate, to account for carriers’ additional labor and time when a shipment required service(s) beyond standard pickup or delivery. For example, drivers may need to travel extra miles to reach a residential location, or the service center may need to plan to provide a trailer equipped with liftgate or pallet quilt services.
Unlike today, years ago, carriers did not have the data they really needed, such as the time the driver was at the stop. This is an example of a legacy-based charge that may not have a place in the future system of pricing – more on this topic in our podcast below.
We want to help you avoid surprise charges and choose the right services you need in addition to our standard LTL service. When you fill out a rate estimate and include accessorial requests, we include a breakdown of the possible cost of your shipment including the additional services.
While some accessorial charges may be unavoidable, many can be avoided with proper planning and communication.
Here are some tips to plan ahead and minimize costs:
1. Provide Accurate Shipment Information – be upfront about your shipment details, including weight, size, and delivery location. For example, if liftgate service is required, include that information upfront. It is always a good idea to accurately weigh and measure your shipment before filling out your rate or Bill of Lading (BOL) so that your shipment is not subject to change if it is reweighed or remeasured. This can add additional, often unexpected, costs.
2. Communicate Requirements Early – Identify your needs and your customer’s needs then inform your carrier in advance. Your local service center can help you with these requirements.
3. Prepare Your Team – if possible, have your team and equipment ready to assist the driver. This can prevent detention fees and unnecessary delays.
Taking these proactive steps is key to avoiding unexpected accessorial charges and reduce surprises throughout the shipping process.
The trucking industry has reached an inflection point where digitization and automation are critical parts of the industry’s future. This leads to many downstream benefits for both the shipper and carrier. Listen to Todd Polen, Old Dominion’s Vice President of Pricing Services, and Curtis Garrett, Senior Vice President of LTL at Freight Plus, as they discuss the future of freight payment.
As freight shipping evolves, carriers are working toward simplified and transparent pricing models that minimize disputes and improve efficiency.
Here’s what the future should look like:
Imagine a model where standard delivery includes a specific, agreed-upon timeframe. For example, your pricing includes no more than 20 minutes to complete delivery. In the event it takes longer than that, you may need to pay more for the driver’s additional time. Under this structure, some accessorial services such as residential deliveries or liftgates would still add extra charges, because they add operational costs such as out of route miles, and liftgates require extra maintenance, but these fees would be clearly communicated in advance.
Forward-thinking pricing models focus on streamlining billing processes, reducing disputes, and improving transparency. This benefits both shipper and carrier.
Pricing of the future will move away from charging shippers to death for every little thing and will focus on invoice automation and real-time notification of any accessorial charge, should it be warranted!
We want to help you avoid surprise charges. When you request accessorial services in your ODFL.com rate estimate, we provide an estimated breakdown of potential costs.
In the end, your price is based on the cube in the truck and time spent on pickup, delivery, and handling your shipment on the dock. By understanding accessorial charges and taking steps to prevent unnecessary fees, shippers can minimize unwelcome surprises and streamline shipping processes. Partnering with a trusted carrier ensures you have the right support to manage these fees.
Our customers choose Old Dominion for our premium service and one of the lowest claims rates in the industry. Our team can help you access competitive pricing tailored to your needs and ensure your freight arrives on-time and is damage-free. Connect with a Solutions Specialist today.