As the omnichannel peak holiday season quickly approaches, it is imperative to plan extra spending associated with peak season. Some excess spending comes in the form of peak season accessorial charges. Peak season accessorial charges, or peak surcharges, are the variable service fees attached to an invoice for operating during the year’s busiest time because time and space in freight are limited. However, the 2020 peak season is already gearing up for trouble as carriers release new accessorial charges for both peak and general rates too, reports Supply Chain Dive. Preparing for the peak season includes preparing for the extra costs incurred during this time, but some will combat these excess surcharges.
The Importance of Freight Accounting Management to Reduce Costs
Common Misconceptions About Peak Season Accessorial Charges
The peak season is often referred to as the holiday season. The peak season is typically thought to be U.S. holidays only. However, this is a common misconception. The peak season lasts through part of the Chinese New Year, a month and a half past the last major holiday. Assuming peak season and peak accessorial charges only last through the U.S., significant holidays can be a large contributor to overlooked fees. Another common misconception about accessorial charges is that those surcharges only happen during peak season. Although rare, surcharges throughout the year do occur, especially among parcel shipping providers. Not paying attention to the carriers and their rates is the best way to get those surprise costs incurred on the invoices. Another slight myth is that there is no way to plan for total landed costs. Using a TMS is the way to track freight in real-time while also managing shipments. This will eliminate the guesswork associated with a lack of technology.
Planning for Peak Season Surcharges Is the Only Way Forward
The only proper way to combat accessorial charges and other surcharges, including FedEx’s upcoming new high-cost zip code surcharge, is to plan. One way to prepare is to use the previous fiscal year to calculate the projections for the upcoming peak season. Forecasts are a valuable tool when planning for the upcoming season. Ensuring regular auditing and tracking freight shipments and monitoring surcharges across all carriers will prepare shippers for the peak season. Peak season is more hectic and busier with each passing year. The costs incurred for freight and carriers can easily be forgotten amid the chaos. According to Transportation Insight, “With regular invoice auditing and business intelligence reporting, you can remove most of the uncertainty from the current surcharge environment while also preparing for any new fees that may be coming. Deploying additional best practices in your parcel program can supplement your ability to plan for mitigating peak season surcharges’ cost impact proactively.” Keeping these in mind will make planning easier and alleviate the excess costs.
Tips to Manage Peak Freight Costs Better.
Peak season surcharges may change year to year, but managing freight costs does not have to be a hassle. Some of the ways to manage peak freight costs are:
- Know what the peak season surcharges are for all carriers. Carriers will list their surcharges for the season on their websites. Keeping an eye on all carriers will ensure shippers get the best deal and service for their dollars.
- Rate all shipments with all carriers before selecting one based solely on the lowest surcharge. Even though carriers will have lower prices, it does not always guarantee on-time delivery or good service. Keep these in mind when deciding what carrier to proceed with.
- Apply TMS analytics to audit invoices and validate details before freight settlement. Using all arsenal tools will remove the guesswork and double-check all information, narrowing the margin for error.
- Consider freight consolidation to transform parcels into LTL and FT. Shipping each parcel with a different carrier, or individually with the carrier can add up to wasted money. By consolidating to an LTL or FT, shippers pay for the space they use, not by each package. This will save time and money and get the product to its target destination faster than one at a time.
Take Control Over Freight Spend by Staying in the Know of All Peak Season Accessorial Surcharges
The 2020 peak season accessorial charges’ list is not yet set in stone. And shippers that fail to plan for the increase, taking into account existing surcharges deriving from COVID-19, will face extreme dynamics in total landed costs. Fortunately, working with an expert 3PL, such as Cerasis, now part of GlobalTranz, can significantly reduce these added costs. Request a consultation online with GlobalTranz. And don’t forget to check out the online demo of the Cerasis Rater.