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 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.
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.
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:
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.
To subscribe to our blog, enter your email address below and stay on top of things. We'll email you with a confirmation of your subscription.