Ascent Global Logistics Blog

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8 Freight Terms You Must Know & Why

Posted by Ascent Global Logistics on Jan 16, 2017 2:27:53 PM

Whether you’re new to the transportation industry or brushing up on your terminology, it can be challenging to understand freight related terms. Without insight into what the terms mean and how to apply them to your shipments, logistics can become frustrating – especially when the terms are related to charges. To better help you, the experts at Ascent came together to define shipping terms that we frequently receive questions about and expand on how these terms apply to you.

1. Accessorial Charges – Charges made for performing services beyond normal pickup and delivery, such as inside delivery, liftgate  or storage charges.

Unless your shipments are dock to dock, It’s likely that you very familiar with the term accessorial charges.  Anytime you are requiring specific equipment or driver labor expect and plan for accessorial charges.

2. Claim vs Dispute

A claim pertains to shortage or damage noted at delivery.   A claim can be made for the cost of the freight or repair of the freight and it can also include the freight cost or charges. The shipper is responsible for filing the claim.

A dispute is a ‘disagreement’ between the shipper and the carrier a  shipment parameter that has changed the freight bill amount. Carriers have the authority to re-weigh or re-classify the freight. As a customer, if you disagree with  their findings and invoice you can dispute with  the carrier. Your 3PL can help you file and complete this process.

3. Concealed Loss  When the recipient of a package is not able to see damage to the item(s) until the package is opened. The damage was not visible at the time of delivery.

Depending upon the shipment, you may not open it or inspect the product until days later. However, the product was damaged during shipping and you need to file a claim. In a concealed loss claim, the window to file is shorter.It is important to inspect all shipments as they come in to confirm no damages occurred.

4. Embargo – Any event that prevents the freight from being accepted or handled. This includes natural disasters and traffic obstacles.

Yes, this actually happens. Take the recent West Coast Port closures as an example. 

5. Knock Down vs. Set Up – Knocked Down (KD) refers to products that can be taken apart, folded or telescoped to reduce normal the amount of space it takes up. Set Up (SD) refers to products that stand during shipping.

Some items, such as a table, for example, can be shipped both standing up with the legs attached or broken down to save space. This will determine which freight class your product will ship at and ultimately determine the price. Again, it’s crucial to select the proper freight class.

6. National Motor Freight Classification (NMFC) - Industry standard tariff published by motor carriers containing rules, descriptions and rating on all products moving in commerce; used to classify goods to rate the freight bill. 

Does the class really matter? YES – and it must be accurate! Your freight bill can drastically change if you have reported the wrong class. It’s also important to monitor the NMFC for updates to classes (or subscribe to the Ascent Blog to stay up to date)

7. Non-Commercial / Residential / Limited Access – Different carriers and customers use these terms interchangeably, but all three refer to the same thing.

In our experience, we noticed that many customers are unaware of the variety of locations that are lumped into these three categories. Delivery locations to private residences, schools, churches, farms, construction sites, government offices or buildings, fairgrounds, or apartment complexes all fall into this category. Also, note that each carrier will apply an accessorial charge for these types of shipments.

8. Vehicle Furnished, But Not Used (VNU) - An additional charge when Carrier upon receipt of a request to pick up a shipment, dispatches a vehicle for such purpose and, due to no fault or negligence on the part of Carrier, the vehicle is not used.

In short, if you book a truck and cancel within any time frame, it’s very likely you will face additional charges. Although this seems rigid, look at it from the carrier’s perspective: When you schedule a shipment, you are using their resources. If you cancel, then that truck had available space that wasn’t used. Or perhaps the truck was going out of their way to come to your docks, they now wasted that mileage and time.

Contact Our Solutions Experts Now! 

Topics: Trucking, Supply Chain, Logistics, Industry News

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