This post was last updated on April 16th, 2022
Every month, we ship thousands of shipments with our rail partners across Canada with all types of goods – from food to clothing, electronics, and machinery.
That means we know the details of intermodal rail transportation and how important it is for you to understand Intermodal Accessorial Charges before booking your shipment!
Now, if you haven’t heard of them before, we advise you to keep reading this post to fully be aware of what they are, what their role is in the intermodal transportation industry, and how it affects you as a business.
The Basics of Intermodal Accessorial Charges
What are accessorial charges?
Intermodal Accessorial Charges are an additional fee that intermodal carriers charge for each extra service they provide beyond pick up, transport, and delivery. They are also known as intermodal surcharges.
How do intermodal accessorial fees work?
Fees can vary depending on the type of transportation involved, equipment and services required, the workforce needed, or even external events affecting the shipment at any step of the supply chain and logistic process.
Accessorial charges can, for instance, include demurrage, scale service, inside delivery, fuel surcharges, and more.
Why do carriers apply additional fees?
Additional fees are common in the intermodal carrier industry. There are various reasons why carriers may choose to apply additional fees, such as to offset the cost of fuel or to account for updated regulations.
In some cases, carriers may also apply additional operational efficiencies charges, drayage carriers fees, and fuel surcharges to account for higher traffic levels on certain routes.
Ultimately, each carrier is different, and it’s important to research each carrier’s policies before shipping intermodally. You can ensure that you are aware of any additional fees that may apply to your shipment.
What Are the Accessorial Charges Specific to Intermodal Transportation?
There are many different accessorial fees, and each case is specific. We have listed for you the most common ones for intermodal transportation:
Demurrage fees are charges you pay for not picking up your merchandise from a shipping company’s intermodal terminal warehouse within the allocated time.
It covers the fact that the rail terminal has to deal with occupied storage in their warehouse while this should be open for the next clients and the risk of reaching their storage capacity.
Per diem charges
This is the first type of detention charge. This accessorial charge is billed to cover the daily cost of using equipment, containers, chassis, or trailers from another carrier longer than the free time allowed.
This fee keeps growing until the equipment goes back to the original carrier owner. It allows them to cover the unexpected cost of having their equipment on the road one or several days extra, whereas they could be rented to another client.
Driver detention charges
The second type of detention charge corresponds to the driver detention time fee.
This fee is when intermodal carriers must pay an extra hourly charge for the driver when they need to wait for more than the free time planned for loading or unloading the cargo.
This extra fee is an additional you can ask for when booking your intermodal shipments. This service allows you to have your freight scaled on each operator’s load.
It is quite simple, but it can help you avoid future incorrect weight issues and surcharges.
Other Types of Accessorial Charges
Below you will find common charges you might have to pay or be billed. This list is not exhaustive, so if you have any doubts or specific requests, don’t hesitate to contact us!
Entrance fees or inside delivery
Fees are charged by the carrier when merchandise is picked up or delivered to a customer’s location.
This could mean the driver has to enter a building and use some special handling such as a pallet jack to either load or unload the shipment.
Limited access pickup
This additional charge is for entering into a facility that requires special shipment requirements or extra effort because of inspection of the merchandise or security reasons.
Any trucking company usually applies the limited access pickup or delivery fee when delivering to specific destinations such as military bases, schools, or even diplomatic buildings.
Lumper service (load-unload)
Similar to the driver-assist, the lumper service is charged if the carrier needs to add labor costs to the final bill to hire an extra workforce to handle the loading or unloading of the shipment between different modes of transportation or at the loading dock.
This accessorial charge is an extra fee that Carriers typically list to cover increased fuel costs. As the price of fuel can evolve quickly, partner carriers prefer keeping it safe in case of a high rise.
Driver clean fee
Carriers are allowed to apply an extra charge if it is required for the driver to clean his truck before transporting the merchandise.
The driver doesn’t always intervene in the loading process. But when this additional fee is billed, this means the carrier requires the driver to load or unload part of the truck’s cargo at a dock for some extra handling.
If the consignee location is not equipped with loading docks, the Intermodal carrier can provide the liftgate service to assist you in loading or unloading with liftgate equipment.
This consists in moving your cargo up and down thanks to a hydraulic platform at the back of a particular truck.
It is important to note that not all trucks come with a lift gate, and it is not the shipper’s responsibility to check the delivery destination and add this service. Talk to your intermodal carrier in advance if you consider needing this service.
The additional fee that shipping companies apply to transport hazardous materials is due to the added risks they represent for the workforce.
It also covers all the needed paperwork and time the carrier’s team spent to declare this specific shipment to the Department of Transportation.
Redelivery extra charge
This charge is applied when the intermodal carrier has to return back and re-deliver your cargo another day.
Reasons can be diverse: because of a customer’s request, because no one is available to receive the shipment, because there isn’t the necessary equipment on-site to load/unload the goods, etc.
This comes as a pricy expense as, basically, it involves the carrier redoing the whole job.
Advance notification surchage
Extra fee that is based upon the consignee requirements to make the driver send an advance notice to the receiver before its arrival to announce the delivery of the shipment.
This fee is billed if the carrier has to store the merchandise of the customer in its own facilities for whatever reason.
Equipment order not used fee
This fee covers the return of the rail-owned equipment after the carrier is advised that the load has been canceled or is not ready with too little or no notice or when the truck driver is unable to operate.
The Cost of Intermodal Accessorials on Your Business
How much more will you be charged on your freight bill for those fees?
Really, every case is different.
Considering the right additional services for your shipping plan might be a complex thing to do by yourself. If you get mistaken, it can consequently affect the carrier’s rates and your shipping budget.
We know it can be tricky, but we are here to help you with the process.
First of all, we recommend you get an initial quote on our website. Following this, you’ll be in touch with our trained rail shipping experts.
They will be able to help you define the flat fee as well as the correct additional solutions you will need depending on your cargo and shipment specificities, as well as help you reduce accessorial charges.
Be aware of the unexpected accessorial fees
Some accessorial fees, such as demurrage or per diems, are unexpected and triggered by external or unplanned situations.
Yet, they are legitimate, affecting all parts of the supply chain and shipping process.
Unfortunately, you sometimes cannot plan for those additional costs, so they might have to be added to the freight bill during or after shipping depending on the event.
How to reduce intermodal accessorial charges?
If you can give us more details on your cargo and its specifications, we’ll be able to estimate all the potential accessorial charges that might come up.
This way, we can help you identify how these extra costs could be reduced or even eliminated. We always do our best and work hand to hand with our customers.
However, a few things that can help reduce these additional charges are:
- Understanding the shipper and consignee requirements
- Correct weight and size of the containers
- Making sure you know the carrier rules, tariffs, and rates
- Choosing the proper vehicles and routes
- Having set up the sufficient teams or equipment to allow a fast and efficient delivery
- Plan the delivery ahead of time
As you can see, intermodal accessorial charges are pretty specific, costly, and can add up quite quickly.
It’s then very important to understand their impact on the overall shipment cost and require the correct services for your intermodal transport shipment.
We hope you enjoyed this blog post. If you need any further assistance or advice to correctly plan your Intermodal shipping strategy, do not hesitate to get a quote or contact us directly! We’ll be happy to help!