Reduce These 5 Hidden Freight Costs

By Brooke Hughes

Preparing for a freight shipment involves multiple steps, including ensuring your shipment has adequate and safe packaging, all parties involved are available at the correct times, and accounting for all costs.

Freight costs encompass a wide range of expenses. These include the primary costs of transporting the freight, insurance protection costs, packaging and handling fees, and documentation fees.

After taking the time to calculate all the costs, coordinating places and times, and finally shipping your freight successfully, you’re hit with unexpected fees. This can prove to be frustrating, but there are hidden freight costs that sometimes aren’t accounted for in the original quoting.

For your next shipment, it’s crucial to be proactive in understanding the hidden freight costs and find ways to prepare and reduce them. This strategic approach can help you avoid potential financial impact.

Five Hidden Freight Costs To Watch Out For?

Five hidden freight costs are common among carriers:

1. Inaccurate Freight Classification

When you ship any freight, it has to be put into a freight classification system and given a code known as the National Motor Freight Classification (NFMC) code, a number used to categorize and price freight in the industry. It’s based on four factors: density, handling, stowability, and liability.?

The freight must have the correct classification, as it determines your service costs. The cargo can be put into the wrong category if incorrect information is provided. Once the carrier inspects the freight and finds it belongs under a different code, it can lead to extra costs for the shipper.?

2. Accessorial Charges

Accessorial fees are for services beyond standard transportation, such as liftgate services and residential or limited-access location delivery. Accessorial charges may be overlooked during the initial quote. If they are necessary for the successful pickup or delivery of the freight, it can add additional costs that you may need to prepare for.?

3. Fuel Surcharges

Fuel surcharges are put in place by the carrier to cover the cost of fuel. The cost depends on how far your shipment is transported and the price of fuel at the time.

It’s important to note that fuel prices quickly fluctuate based on market conditions and may change between when the service is scheduled and when it is performed. Therefore, the surcharge is in place to protect the company from increased fuel prices, so it’s essential to consider this hidden cost with your next shipment.

4. Customs and Brokerage Fees

For international shipments, customs duties, tariffs, and brokerage fees can add significant costs to your shipment and aren’t typically included in initial quotes.

5. Storage and Detention Fees

A hidden fee that most shippers don’t consider is storage and detention fees. Operations sometimes don’t run as smoothly as we’d like, and if shipments are not picked up on schedule or if containers are held at a port longer than the contract states, additional charges are added. These costs can quickly rise depending on the situation and market conditions.

How To Avoid Or Reduce The Hidden Fees

Now that you are aware of the hidden fees that carriers can add to your shipment, there are steps you can take next time to reduce or avoid them altogether.

• Work with a Freight Broker: Whether it’s your first or tenth time shipping freight, working with a third-party logistics company can help to reduce or avoid hidden fees. The broker can provide shipping expertise and assist you through the entire process. They will be able to ensure that all the correct information is given to the carrier to avoid any mistakes that can lead to hidden fees.
• Review Carrier Performance: Even if you are working with a freight broker, doing your research is essential. Regularly assessing the performance of carriers regarding delivery times, transparency, customer service, and cost accuracy before you choose the best one for you can make a difference. Working with a carrier that has an outstanding reputation and your trust can help to reduce hidden fees.
• Receiving Multiple Quotes: It’s crucial to get multiple quotes from different carriers and compare them to reduce hidden and overall freight costs.
• Understanding Freight Classifications: Familiarize yourself with the NFMC Classification System to understand your freight class. Ensuring that your products are classified correctly, whether by yourself or working with a freight broker, can help to avoid unnecessary charges.
• Review Accessorial Charges: Similar to understanding freight classifications, reviewing any accessorial fees that the carrier charges can help to avoid them. Accessorials can be required depending on the size of your shipment and where you need it picked up or delivered. Knowing beforehand what accessorials apply to your shipment can eliminate the extra fees added at the end of the process.

By following these steps, you can enhance your bottom line.

Shipping shouldn’t have to be a challenge riddled with surprising fees; it should be an easy and efficient process. Many different factors contribute to hidden costs when it comes to shipping freight. But by having the correct support, awareness, and thorough planning, you can mitigate and even eliminate the hidden fees that can pop up, making your next shipment a cost-effective breeze.