We often get questions about billing adjustments from shippers. It can be an unpleasant surprise to receive a billing adjustment, and there are ways to lower their occurrence. So, what are billing adjustments and what can you do to avoid them? We go into the details you need to know here.
What Are Billing Adjustments?
First things first—let’s define exactly what a billing adjustment is. Simply, billing adjustments are the unpaid amount of freight shipping costs reported by the carrier that weren’t part of the original, estimated freight quote.
Sometimes billing adjustments are called a “rebill.” This happens when a second invoice is sent to the third-party logistics provider (3PL), such as FreightCenter, because of a discrepancy between the original freight quote the shipper filled out and what the carrier reports during their inspection and transportation process. The carrier sends the second invoice to the 3PL, and then the 3PL sends an invoice to the shipper for the additional charges from the carrier.
Anytime a truck driver performs services beyond what is stated in your bill of lading (BOL), they will list those additional services on the proof of delivery (POD). After inspecting your shipment, the driver will sign and provide both you and your 3PL with a copy of the proof of delivery form. This POD document will include the weight, dimensions, and contents of your shipment as well as any additional services provided and any damage to the freight (if any).
Reasons for Billing Adjustments
While the shipper is responsible for any billing adjustment and fees, the additional charges are often surprising and shocking to shippers. Understanding why you might receive a billing adjustment is important.
You might receive a billing adjustment after the shipment is completed if your original freight quote differs in what the carrier reports. Here are some common reasons for billing adjustments:
- Difference in the number of items being shipped.
- Freight reclassification.
- Incorrect weight or dimensions.
- Different size at the time of delivery.
- Carrier added the required add on services or accessorials which were not included in the original quote. These include liftgate, white glove service, limited access location, hazardous material shipping and more. A more comprehensive look into accessorials can be found in our Guide to Accessorials.
Keep in mind that freight carriers weigh and measure shipments during the inspection process. They use sophisticated, multidimensional measurement tools accurately weigh and measure your shipment. That means that if any of the shipper-reported shipment details are incomplete or incorrect after the carrier inspects, weighs and measures the freight, you may receive a billing adjustment for the final charge of the shipment after the delivery has been completed. You can learn more about this on FreightCenter’s Terms & Conditions page.
How Can You Avoid Billing Adjustments?
When it comes to avoiding billing adjustments, accuracy is key. Here are some simple steps you can take now:
- Be accurate – Estimating weight and dimensions will end with a billing adjustment headache later. Remember to accurately weigh and measure your fully packaged cargo. Also, use an industrial freight scale and always round up when measuring dimensions.
- Get freight class right— Carriers use freight class to help them price the cost to ship goods. To avoid a costly reclassification billing adjustment, be sure you know your shipment’s freight class by using our freight class lookup tool.
- Location, location, location – Fright shipments are heavy and are intended to be picked up from a loading dock and delivered to a loading dock. However, not every place has a loading dock. When there is no loading dock present, freight is picked up from the curb and delivered to the curb. That’s where the carriers’ responsibility ends. That means you might need to add the lift gate or forklift accessorial at pickup and delivery to avoid the billing adjustment later. Know when you’re shipping freight to destinations with special requirements.
- Triple check – Work with a 3PL to triple check your shipment has all the required accessorials it needs before your book your shipment. You want to be sure your shipment details are accurate on your quote, such as freight class, measurements, weight and locations.
3PLs Help Reduce Billing Adjustments
When you have to manually go through every step of the shipping process yourself, you’re more likely to make mistakes that could end in costly billing adjustments later. Working with a 3PL partner takes the guesswork out of the shipping process by giving you access to the best shipping resources, one-on-one support from an expert shipping agent, affordable freight rates, a variety of accessorials to meet your shipping needs, and innovative features.
Don’t let billing adjustments surprise you or give you shipping nightmares. Let our experts help you ship smoothly and successfully by giving us a call at 844-212-7447 or use our free online freight quote tool here.