If there’s one area where things can go awry quickly for shippers, it’s billing adjustments. The time and effort that goes into developing a shipping strategy, planning a budget and managing it, can all be in vain when additional costs in the form of a billing adjustment keeps occurring at the completion of your shipments. Before we get into the details of how to avoid billing adjustments, let’s discuss how they happen, who issues them and why.
What Are Billing Adjustments?
Knowing how to avoid billing adjustments is easier when you know what they are, what to look out for and what you can do. For shippers, receiving a billing adjustment sometime after your freight has shipped is frustrating. You thought you’d paid the full bill when you booked your shipment. Now, it seems you did not. How did that happen?
Billing adjustments, often referred to as “rebills,” result from discrepancies between the order as reported on a shipper’s Bill of Lading (BOL) and what the carrier reports. Carriers weigh and inspect each shipment they handle with sophisticated equipment and inconsistencies are often found between what is listed on the BOL and the actual shipment.
Carriers rely on accurate weight and size reporting so they can properly utilize their trucks’ space and ship them with stability in the back of a large freight trailer. So, accurate information is vital and inaccurate information will be listed as rebills on the proof of delivery (POD) for the shipper.
Who Issues a Billing Adjustment?
Often, shippers get confused as to where the charges come from. If they ship with the help of a 3PL, the misconception is that the charges come from the 3PL. However, the 3PL does not handle any shipment and relies on the shipment information that is provided during the quote process. Billing adjustment charges come from the carriers when there is a discrepancy in information or a misunderstanding of requested services. The 3PL will bill the customer for the billing adjustment and pays the carrier on the shipper’s behalf, but it is the carrier that issues the billing adjustment after the shipment has been completed.
Billing adjustments also occur when accessorials, or additional services beyond the basic services, are rendered but not included on the initial BOL. The role of carriers in the shipping process does not extend to movers. Services like inside delivery and pickup or first and final mile are additional services with additional costs. Some examples of accessorials are: Lift gate services – required when no loading dock or forklift is available at either the pickup or delivery location. Limited access locations is always considered an accessorial. Home-based businesses, for example, are often marked as commercial locations on freight quotes and BOLs when they’re actually residential locations requiring the residential service accessorial.
How do you know when you need to include an accessorial? Check out our Easy Guide to Accessorials for a more comprehensive look into the most common accessorials and when you need them.
Best Practices to Reduce Billing Adjustments
There are plenty of things you can do to avoid billing adjustments:
- Provide accurate information – Estimating weight and dimensions when booking is the main cause for major billing adjustments. Always include the packaging material, pallet, crate etc. when weighing your shipment. Use an industrial freight scale and always round up when measuring dimensions.
- Look into freight class — Carriers use freight class as a metric for pricing the cost to ship. Make sure you know your shipment’s freight class to avoid a reclassification billing adjustment. Use our freight class lookup tool to help determine freight class.
- Location – Freight is intended to be picked up from a loading dock and delivered to a loading dock. When there is no loading dock, freight is picked up from the curb and delivered to the curb and the carriers responsibility ends at the curb. Avoid the billing adjustment by adding pickup/delivery accessorial charge when you book it.
- If no loading dock or forklift is at either pickup/deliver location – add a lift gate when booking your shipment.
- Always confirm – Confirm your quote, freight class, measurements, weight and locations with your shipping partner. They can help determine if you have missed anything that might be added after the fact resulting in a billing adjustment.
30 Minutes Well Spent
As you've probably noticed, billing adjustments can be avoided by selecting the appropriate accessorial charges and providing accurate weight & measurement information when you book your shipment. Determining which accessorials you’ll need should take you no more than 30 minutes, tops.
Do a little research about the pickup and delivery locations, confirm your weight & measurements include all packaging material and confirm freight class if you are using. If you are unsure about the delivery location, freight class etc., call your 3PL and ask. Download our Guide to Accessorials for a complete accessorial overview. Then when you run your instant freight quote, you can select the accessorials you need.
Keep Shipping Successful & Simple
Improve your shipping success by partnering with a 3PL like FreightCenter who has the expertise to guide you step by step through the shipping process. Helping shippers avoid billing adjustments is easier with the help of our professional shipping agents who provide solutions that best fit the needs of your supply chain.