William B. Cassidy | Sep 29, 2011 12:17PM GMT The Journal of Commerce Online - News Story
More than two-thirds of truckload carriers plan more use of accessorial charges, adding income from shipping fees to higher rates, Transport Capital Partners said.
The consulting firm said 68 percent of the carriers it surveyed in the third quarter plan to renegotiate accessorial fees across more categories with shippers.
Those accessorial fees include detention charges, mentioned by 42 percent of carriers, and fuel surcharges, which 39 percent of the carriers hoped to renegotiate.
And the percentage of carriers that expect to renegotiate their contracts to change the mileage standard they use to bill shippers tripled, rising to nearly 20 percent.
Those carriers hope to move from shortest-route mileages favored by shippers to a practical mileage standard that more accurately reflects distances traveled.
“Short miles are a hangover from the regulated era of three decades ago and do not reflect current realties of miles ran, fuel consumed, scarce driver hours used, and equipment utilization,” said Richard Mikes, a partner at the consulting firm.
Package giants UPS and FedEx Express have long used accessorial charges to collect additional fees for special delivery services on a transactional basis.
Trucking companies include accessorial fees in their tariffs and contracts, but often are known waive them, depending on the customer and market conditions.
In a post-recession era of tight capacity when carriers hold pricing power and are focused on rebuilding margins, truckers are likely to collect on accessorials.
Truckload rates continue to rise in the third quarter, as well, though at a slower pace. Forty-seven percent of the carriers surveyed by TCP saw rates rise 5 percent.
Slightly more than 36 percent of the carriers said rates remained stable, compared with 17 percent in the second quarter — the highpoint this year for rate hikes.
Truckload carriers also hope to use their market leverage with shippers to negotiate shorter payment periods, which would help their cash flow, TCP said.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
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One-time fees for special services high on carriers’ negotiating list, TCP says
The consulting firm said 68 percent of the carriers it surveyed in the third quarter plan to renegotiate accessorial fees across more categories with shippers.
Those accessorial fees include detention charges, mentioned by 42 percent of carriers, and fuel surcharges, which 39 percent of the carriers hoped to renegotiate.
And the percentage of carriers that expect to renegotiate their contracts to change the mileage standard they use to bill shippers tripled, rising to nearly 20 percent.
Those carriers hope to move from shortest-route mileages favored by shippers to a practical mileage standard that more accurately reflects distances traveled.
“Short miles are a hangover from the regulated era of three decades ago and do not reflect current realties of miles ran, fuel consumed, scarce driver hours used, and equipment utilization,” said Richard Mikes, a partner at the consulting firm.
Package giants UPS and FedEx Express have long used accessorial charges to collect additional fees for special delivery services on a transactional basis.
Trucking companies include accessorial fees in their tariffs and contracts, but often are known waive them, depending on the customer and market conditions.
In a post-recession era of tight capacity when carriers hold pricing power and are focused on rebuilding margins, truckers are likely to collect on accessorials.
Truckload rates continue to rise in the third quarter, as well, though at a slower pace. Forty-seven percent of the carriers surveyed by TCP saw rates rise 5 percent.
Slightly more than 36 percent of the carriers said rates remained stable, compared with 17 percent in the second quarter — the highpoint this year for rate hikes.
Truckload carriers also hope to use their market leverage with shippers to negotiate shorter payment periods, which would help their cash flow, TCP said.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
Please feel free to comment to any of the posts on this blog. The intent is to start discussions on the subject content. If you have articles for post or comments about the blog in general please contact: Thank you Preferred Logistics----------- www.preferredlogistics.biz
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