It will never be OVER for Overlength fees

Over-Length accessorial fees from LTL carriers received little to no attention…until November 1st, 2021.??

That was the day Old Dominion was first out of the gates with significant changes to their fee.?

(It was some kind of ‘restructure’)

Prior to that, Old Dominion assessed $125 as the fee for shipments containing any item equal to (or greater than) 8 feet, or 96 inches in length. Additional breaks were at $175 for 12 feet and $350 for 20 feet.??

Effective as of November, ODFL announced a flat fee of $1,000 for shipments with any item equal to or exceeding 8 feet in length.??

Quite the bump from just $125.?

Old Dominion clearly wanted to push this type of freight out of their network…or get compensated fully for handling.

Virtually all other carriers quickly followed suit with their specific updates - and we saw significant increases being applied throughout 2022/2023.?

Fees rose, and additional breakpoints (mostly in the 15' - 18' range) have been added.

At that time in late 2021, LTL carriers were feeling the full effects of COVID-19; business had exploded, and operations were severely slowed down by drivers and dock workers calling in due to infection or quarantining.??

Overly-long, awkwardly sized shipments have always been more challenging for LTL carriers to handle, stow, and move than your standard-sized skid - and the costs to handle those items became incredibly apparent to the carriers.

In fact, it was clear that the Overlength fees they had…were largely non-compensatory.??

Long items take up an excessive amount of space on a trailer - it’s going to be difficult to load freight above them, even when using load bars.?

Longer items tend to be narrower than a pallet, so it eats up floor space as well. They almost always have to be floor-loaded, and take extra effort to get them onto and off of a trailer.

Long items are also hard to handle on a dock with a forklift because LTL docks are typically quite narrow. The handling time is higher, and sometimes may even require two workers.?

Try walking around your house with a broom held perpendicular to your body - you’re bound to bump into things and knock stuff over.?

While that worker is moving that 12-foot crate on the dock (moving slowly as he is doing so), every other dockworker around him is doing the same thing.?

Think again about you walking around your house with a broom held sideways.? As you walk around, everyone else is doing the same thing, walking slowly and being more cautious at the same time.

Another consideration: at this stage, virtually every LTL carrier of any size had a good costing model in hand that helped them identify the true costs of shipments.?

They had the means to finally measure the true impact of long articles, so it’s hard to fault the carriers for wanting to make changes -

the only fault is the coordinated rollout and the ridiculous increase from baseline that was implemented seemingly overnight.?

Simply put, long items carry a ton of primary and secondary and tertiary costs that all impact operations tremendously. And Over-Length fees, prior to late 2021, were simply not were they needed to be.?

As we head into 2024, it seems like LTL carriers have their Over Dimension fees dialed in now. Through the GRI cycles in late 2023 / early 2024, changes were quite…modest.?

Below, you can see where many LTL carriers were (prior to November 2021) and where they are today:

All 2024 carrier rates are as of 3/22/24, except for Averitt Express….

a little birdie advised us that Averitt is increasing their Over-Length fees, effective 4/22/24 ??

Granted - shippers with Over-Length freight may feel like these fees are unfair and more than cover carrier costs. That could definitely be the case, given the wide array of fees they face.

In some cases, carriers are clearly using the fees to incentivize customers to NOT give them their freight.

That’s the argument that can be made for Old Dominion - for all lengths. And it can be made for XPO for items ≥ 20 feet. Southeastern appears to feel the pain at 16 feet, and charges modest fees for 12 feet and less.??

So shippers with Over-Length freight really need to think about how to match their freight to their carriers.

And if shippers really want to minimize the impact of Over-Length fees, there are a few strategies to consider:

1. Know your handling unit dimensions and provide dimensions on every single over-length shipment

Pitt Ohio has a novel strategy for Over-Length that, frankly, we’re surprised that more carriers haven’t adopted themselves - they charge a lower fee if the shipper declares the length on the BOL.

This ensures Pitt Ohio gets the revenue they deserve on each such shipment, no one has to fight over fees or see a delayed payment and most importantly, they’re able to cost each shipment properly.?

MASSIVE risk elimination for on carrier’s end, and one would argue that a shipper who declares their handling unit lengths on BOLs has the leverage to negotiate lower Over-Length fees.

It amounts to being a good citizen and showing your carrier partners that you are not trying to slip such shipments through with no fee applied.

1. Be aware of double-charging based upon your NMF items

Lots of commodity types can be shipped Over-Length. Some obvious examples, like flag poles and gutters, are actually classified by their length.?

Flag poles are NMF item 160420 and are classified based upon a combination of density and length. If your flag pole is 6-12 PCF and under 6 feet in length, its class is CL110; if it’s over 6 feet but is under 16 feet, its class is CL125; and if the flag pole exceeds 16 feet, the class jumps up to CL150.

It pays to be more mindful of this and talk to the carriers in your network about whether these class changes plus their Over-Length fee structure is pancaking the charges onto them.

1. Be mindful of the many many rules that carriers employ with their Over-length fee structures

With some carriers, the Over-Length fee structure is pretty simple: the longer the length, the higher the fee, no other considerations.??

But with other carriers, there is more to consider. We already noted that Pitt Ohio charges a lower fee if you declare the length. Do so, and benefit from the lower fee.?

Some carriers (like Pitt Ohio, Dayton Freight, A Duie Pyle) start their Over-Length fee as low as 6 feet 6 inches.? Others (Southeastern, TForce, Central Transport, AAA Cooper) limit liability on Over-Length shipments.?

And R&L assesses their fee on a PER PIECE basis. (So tender 8 pieces that are over 8 feet long, that is not a $190.60 fee, but? $190.60 × 8 = $1,524.80!!)

1. Raise the issue on your pallets that are truly 96 inches long.

Standard LTL trailers are 98 inches wide. This allows carriers to load two standard 40/48 pallets long-wise across the trailer to maximize space utilization while still having a bit of wiggle room to move the pallets around.?

A 96 inch long pallet that is 40 inches wide is exactly equal to 2 standard pallets.? It takes up no more space than that.? And one can argue that loading a single 40x96 inch pallet is easier than loading two 40x48 inch pallets.

Even the handling cost on the dock could be lower. And from a trailer usage basis, no space is really wasted from that double-pallet…so why do carriers assess their fee on items greater than or equal to 96 inches??

Maybe it is just simpler that way…it is a rounded 8 feet. But the real pain for carriers starts at 98 inches and above, not 96 inches.?

If you have a good amount of 96 inch double pallets, talk to your carriers about a lower fee (or maybe no fee) until length of the handling unit actually exceeds 97 inches.?

(Or click here to talk to someone at Rocket about starting those conversations on your behalf!)

And on those handling units exceeding 97 inches, agree to pay what the carrier demands, their full rules tariff price.??

We hope you found this article informative and helpful! This edition of #LetsTalkLogistics was collaboratively written by “LTL Observers” - a collective of industry veterans spanning the carrier, shipper, 3PL, and tech provider spaces willing to share their opinions.

Disagree with these opinions? We'd love to add you to the line-up to make sure we're including a diverse set of LTL observers! Contact us today.