What Your Accessorial Charges Mean

VP of Pricing Services
Todd Polen

Prior to the deregulation of the trucking industry in 1980, accessorial charges were created to fairly compensate the carrier for extra labor associated with picking up or delivering freight. The basic premise was the line haul charge was 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, and so forth, so charges were implemented on a per hundredweight (cwt) basis to recoup some of those labor costs. They were implemented on a weight basis because in those days, carriers did not have the data they really needed— which is time the driver is at the stop. The labor cost carriers were trying to recoup was really a time-based charge. This is an example of a legacy-based charge that really doesn’t have a place in the future system of pricing.

Here’s what the future should look like: Your pricing includes no more than 20 minutes at delivery. In the event it takes longer than that, you may need to pay more for the driver’s additional time. There need to be scenarios in place to allow for multiple PRO numbers being delivered from different shippers, tolerances established, missed appointments, late deliveries, and so on, but the premise should be if it takes longer than what was agreed upon, the carrier gets paid detention. If it takes less than 20 minutes, there is no accessorial charge. Residential deliveries and liftgate still need to be charged, simply because they take out of route miles, and the cost of putting a liftgate on a truck and maintaining those units every year by the maintenance team.

Remember that in the end, your price is based on the cube in the truck, time spent at pickup, delivery, and handling your shipment on the dock. Pricing of the future will be less about accessorial charging shippers to death for every little thing, and more about automating the invoice and providing real-time notification of the accessorial charge, should it be warranted! That is where we are heading.

Do you have questions about your pricing? Contact your solution specialist or reach out to OD Customer Service at 1-800-235-5569. Representatives are available to assist you.

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Contact us by email or simply call 1-800-235-5569 to be connected to an Old Dominion customer service representative.