The Freight Doctor

One good question I like to give people to ask about with whom they should choose as a their freightbroker or 3pl company is, “Do you use major freight carriers?” If the company you are working with uses major trucking lines, such as Yellow, Saia, Con-Way, Estes, ABF to name but a few, then you should be comfortable working with the freight broker or 3pl. This is because these trucking companies are huge operations with great tracking systems of your freight when in transit and chances are, even in this down economy, they’re not going anywhere anytime soon. Also, if the logistics company has accounts with these trucking companies or similar sized trucking outfits, they probably move a lot of freight with them. How does this help you? Well, if they move a lot of freight, then they’ve probably been able to negotiate and justify to these large trucking companies for amazingly cheap shipping rates. They’ve probably also negotiated having an FAK which means better rates for you. You, as Joe Customer, will not be able to come in off the street and demand the best rates with little to no volume and no track record. If the freight broker or 3pl has been around for awhile they’ve done all the hard work in getting freight rates down so all you have to do is swoop in and take advantage of their great rates. It’s just up to you to shop around and find the best freight quote!

Something a little distressing has been brought to my attention recently. The appearance of a new charge on the freight bill:
The Freight Reweight Charge. When did this happen? In all my years in the freight buniness, I’ve never heard of a reweigh charge on a bill before. Evidently, this fee can range anywhere from $20-$50 depending on the freight carriers that have begun to implement this fee.
The reweigh fee on the freight bill has only recently been popping up with a few of the more bold freight carriers. I just can’t see how these freight carriers can justify this new fee. Generally when a freight reweigh is called for, it’s to correct the weight because the freight carrier believes that the shipment is heaveir than the customer stated. I haven’t ever heard of a trucking company calling for a reweigh because they felt that the shipment was estimated as being lighter than the customer stated. That said, when a reweigh is called for you can expect to be charged more on your freight bill even before paying any reweigh fee.
Now again, as I’ve said in the past, shame on the customer who ball parks the weight or dims of their shipment because of ignorance or trying to round down their shipment’s weight in the hopes of getting a better price. You’re not usualy going to get one over on these guys and you’re just asking for trouble down the line when a revised freight chage shows up in the mail, however, this isn’t grounds to double charge customers. Especially because this new re-weigh charge was never part of a freight bill until very recently.
I say to anyone who sees this new fee on their freight bill to contact their agent or broker immediately to dispute this new fee as the freight carrier will get their money from the reweigh itself. At very least demand a certified document that explains the freight reweigh for your approval.

Occasionally, when working with freight carriers and trucking companies, your shipment may get lost somewhere along the way. While I wouldn’t go so far as to say that this happens all the time, it isn’t an uncommon occurance. If you happen to be misfortunate enough to experience having your shipment being lost, here’s what you should know:

If your freight never shows up that means that it could have been delivered to the terminal but more likely than not, probably this means that your shipment was left in a trailer by mistake. The best thing to do, is to call down to the terminal that the frieght was delivered to and ask if they’ve checked the yard and looked in all the empty trailers. Of course they’ll initially tell you no, that all the supposedly empty trailers ARE empty, but you must insist that they recheck the empty trailers because more times than not, this is what has happend to the missing shipment and it’s still sitting out there in a trailer in the yard. In my experience, once I got the terminal manager to send someone out into the yard to look in the empty trailers the missing shipment usually turned up.

In an effort to help you find the best freight quote last week, I decided to pick 4 freight companies online and have them give a freight quote for the same item. Some companies I used their online instant freight quote. Others I phoned in an spoke with an agent.  Here were the parameters I used:

Boxed item rated as FAK Class 125 at 250 lbs.

Origin: San Diego, CA 92101 Commercial Location with Forklift and/or dock

Destination: Atlanta, GA 30303 Residential Location with Liftgate

I discarded any quote that didn’t offer freight insurance or was covered for less than $5/ lb.

Here are the numbers:

FreightShippingDirect.com - $313.88

FreightShippingCenter.com - $433.90

FreightCenter.com - $460.34

Freight101.com - $468.12

From the shipper’s perspective, are freight agents something you should be concerned with or worried about? The answer is no.

The Freight Industry has many different jobs within in it and common practice is for a freight agent to sign on in an independent contractor or employee capacity with a freight broker. The freight agents and the jobs they do are vital to the industry. The freight agent is not usually an employee, but uses a freight company that the agent can get a competitive rate to move shipments for their book of clients in order to pass along better pricing to their customers. Indeed, freight agents are definitely wanted.

As long as the freight company is using top line carriers then there shouldn’t be any any problems out of the ordinary.

In the freight industry, business is done like this all day long.

Why would it be done like this? Let’s give you the basic run down. An agent may have years of familiarity with a specific company. The freight agent has great expertise in handling that particular shippers freight and so the shipper is comfortable letting the freight agent handle the freight. The freight agent doesn’t have any of his/her own rates in place with any major carriers. That said, the agent will look for a reliable broker that has freight rates already negotiated down and in place with major freight carriers. This is very common within the freight industry.

Remember, what should be most important to you is that good top line freight carriers are used. This is one of the ways you, the shipper, can protect yourself.

As a continuing part on my series explaining accessorial charges, today I’ll go into Residential Pickup and Delivery Charges.

The reason for Residential Delivery and / or Pickup Charges for non commercial locations is due to the fact that there are a number of factors that impede a prompt delivery or pickup to the location. The reasons can vary from there being no loading docks or forklifts, the streets may be narrower and harder to negotiate in and out of for the truck driver and as general rule of thumb it’s simply just more difficult to pick up and drop off shipments in non commercial environments. Typically you can also expect a liftgate charge attached because there isn’t a loading dock for the driver to back into as discussed in my previous post.

You can expect fees for residential charges to range anywhere from about $50-$100 tacked onto your total freight quote or bill.

It’s not unreasonable to have your load pick up by the freight carrier the same day as your request. The trick is to get your load booked BEFORE NOON ( 12 p.m. ) at the location of the pick up. As long as you book your load before noon, the earlier the better, then most likely, unless there aren’t any drivers in the area, you’ll have your load on it’s way by the afternoon that same day. If you book your load after, chances are it’ll get picked up the following day. So get your freight quotes in during the morning. The earlier the better!

You as a customer will never be able to negotiate directly with a main freight carrier unless you are part of a large business that can negotiate volume discounts for better shipping rates. Well, sure you can go direct, but you’ll be charged astronomical freight rates so it doesn’t make any sense for you to go direct without any volume and frequency to command better freight rates.

Whether you have the volume or not, the best thing to do is to use a Third Party Logistics Provider. The 3PL is a business that has accounts with large freight carrier companies or uses independent owner/operator trucks. 3PLs have a number of customers and that gives them the negotiating power with the freight carriers or truck drivers to negotiate better freight rates than someone just coming in off the streets such as yourself. This way they can pass along a better price than if you were to go direct with a freight carrier. Some logistics companies pass along their savings to you while many keep margins strong for themselves. The farther they are removed from directly negotiating with the freight carrier, such as in the case of an independent agent or broker, the less margin they have to pass along to in order to tack on their own charges to turn a profit. 

Well, first let’s break everything down into its basic elements. Logistics in a nutshell is the management and overseeing of the transporting, handling, warehousing and packaging of goods from an origin to a destination for a customer.

Third Party Logistics Providers or 3PL for short is a company that is hired by another company or outsourced and contracted to manage any number or all of the elements that fall under logistics.

Most Third Party Logistics Providers have negotiated their freight rate structure. Some 3PLs have negotiated directly with freight carriers and many and more act as independent agents or brokers because they are one step removed from directly being able to negotiating with top line freight carriers. Therefore, these freight brokers or agents utilize 3PLs that have the clout to deal direct with freight carriers.

Basically it works like this: You have the major freight carriers, you have Third Party Logistics Providers and below that you have independent brokers and agents.

The top line freight carriers own their own trucks, warehouses, terminals and offices. The 3PL is a business with offices, employees and sometimes even own a warehouse. Brokers usually work out of their homes and are just a go between you and the freight carrier or more often than not a 3PL. Usually; the best rates will come from the 3PL because of their direct dealings with the major freight carriers. However, you’ll only find the best price by calling around and comparing freight quotes.

Remember that when you’re about to have a freight carrier transport your load to “Freight Proof” your item as though it were going through a car wash and then rolled down a hill. Well, I may be over exaggerating here a bit, but the trip can be perilous with your load being jostled, banged, bumped and yes, dropped and smashed. Fasten down everything. If there is glass make sure that it is protected. Be sure to wrap, bind and wrap some more. A haphazard packaging job is a disaster waiting to happen when moving freight. Take the extra time to making sure your load is protected in everyway you can think of. If you leave any opportunity for damage to your load, chances are if it isn’t the smallest densest material, something will happen to it. Insured or not don’t gamble with your load. Trying to get the freight carrier to honor your freight claim is more difficult than trying to seek an audience with The President! Also be sure to note on receipt that the driver has you sign ANY type of scratch, dent, scrape or scuff you see on the shipment. This gives you up to 9 months to place a claim. If not, you have only 14 days to place a claim. If you accept the shipment no matter how inconsequential or superficial the damage may seem, again, note it on the receipt that the driver has you sign before you taking reciept of the shipment. If the item is obviously damaged, you are well within your right to refuse delivery. This will give you a better leg to stand on when it comes time to be reimbursed by the freight carrier.

Trust me, you’ll thank me later.