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August
2009
Action: Delayed reaction of "Refused" or "On Hand" for freight shipments for which you are responsible.
Carriers will notify shippers or receivers of material that is on hand on for some reason has been returned, or is awaiting some sort of clearance prior to delivery. This could be the payment of COD charges; shipments refused by customers, or damaged material. But regardless of the reason, prompt disposition is important, because at the end of a specific number of days, the shipments become subject to storage charges. Prompt disposition more...
July
2009
Action: Failure to use legally published export rates.
Generally speaking, export rates are published to apply to the various ports of exportation and at lower relative rates than the same product moving between the same two points on a domestic move. The precise purpose for this distinction is not well known except an effort by the carriers to promote international commerce, or the ports negotiating a distinct treatment more...
May
2009
Action: Proper notification to Railroad carriers to establish appropriate and timely strike protection Rues.
It is critically important that transportation personnel be kept up to the minute on the possibility of a strike. Protection against very high demurrage costs offset by being sure proper rules is in effect to mitigate excessive costs. The demurrage can occur to apply on cars at the plant awaiting loading, loaded cars not yet released, and cars of materials inbound, but which have been placed on construction placement awaiting orders to switch into the plant. The difference between strike mitigated demurrage charges and normal demurrage are very large indeed. Proper .more...
November 2008
Action: Making sure all tariff required notations are included on the Bill of Lading.
Surprisingly, it is not unusual for some critically important data to be omitted from bills of lading. Failure to execute section 7 of the bill of lading, for instance, or some other instances such as described on C.O.D.’s can also result in higher costs. Section 7 of the bill of lading simply relieves the shipper of any expenses associated with the service provided the product that was precipitated by any actions of the receiver more...
September 2008
Action: Failure to audit charges for railroad provided maintenance for privately owned rail cars.
Railroad cars must be maintained to Association of American Railroads (AAR) standards, as well as meet all safety mandates. If the fleet is relatively small, this maintenance is arranged with the railroads to accomplish this at point of occurrence. The charges are specified in a guide published by the AAR and include charges for parts and labor. Because the arrangements separate carrier and owner repair cost, the billed charges are rather complicated, and errors are easily found in the actual dollar charges made to owners. These actual charges should be audited against the authorized charges for errors in submittal of invoices. Whether the repairs are
routine or extensive, and more...
September 2007
Action:
Failure to collect proper mileage allowance for
privately owned rail cars.
Railroads are required to compensate private owners
of railroad equipment because these private owners
are supplying a transportation instrumentality that
the railroads are legally required to furnish
themselves. This is done through mileage allowances,
which vary with many factors and the largest single
factor is value of the car furnished and perhaps the
degree of revenue utilization derived by the
railroads. These mileage allowances are paid by each
railroad directly to the more...
August 2007
Action:
Failure to adequately protect against the
possibility of duplicate billing by carriers and
payments by shippers.
Carriers make every effort to avoid this sort of
billing errors. Regardless of their best efforts,
this type of error is not unusual. Well designed
computerized freight payment systems have various
types of built in duplicate payment checks, but even
these are not perfect. A manual check for duplicates
is better than nothing, but not very much, if there
are a large number of bills being processed for
payment. l
more...
April
2007
Action:
Know the Rules and Regulations with respect to
International Shipments
Intermodal shipments are available in which trailers
are loaded onto rail equipment between key rail
points at levels of service and distances, that can
often meet over the road service. There are some
rumblings in the rail sector that indicate they are
finally waking up to “on-time delivery” and “premium
charges” between key sectors such as:
more...
November 2006
Action:
Know Service/Cost Option for Each Mode of
Transportation
Intermodal shipments are available in which trailers
are loaded onto rail equipment between key rail
points at levels of service and distances, that can
often meet over the road service. There are some
rumblings in the rail sector that indicate they are
finally waking up to “on-time delivery” and “premium
charges” between key sectors such as:
more...
September 2006
Action:
Failure to Execute Section 7 of the Bill of Lading
An easily overlooked provision in the body of the
bill of lading is section 7. This section reads
"subject to section 7 of conditions, if the shipment
is to be delivered to the consignee without recourse
on the consignor, the consignor shall sign the
following: more...
April 2006
Action: Failure to execute C.O.D. clause on Bill of
Lading
Occasionally it is necessary for a shipment to be
made that requires that the receiver pay for the
product before it can be released to the receiver by
the carrier. There are many reasons for this, but
one example would be poor credit risk of the
receiver. These shipments are unusual and therefore
require some very special notations on bills of
lading to insure that the carrier is fully informed
about how to arrange for the payment prior to
delivery. Failure to properly inform the carrier can
result in some very substantial losses, with no
recourse to the carrier, since proper notices were
not given at the time the shipment was picked up and
the bill of lading was executed. The process of
establishing this need might require input from the
large Team List A, the party of responsibility to
execute properly the Bill of Lading to protect the
ultimate collection for the product from the
receiver would be Logistics along with possible
interest by others shown in “Team List C.”
more...
March 2006
FAILURE TO ESTABLISH IN-TRANSIT ARRANGEMENTS
The use of this special provision in tariffs is an
old procedure which covered such things as weighing,
milling, marking, packing, storing, inspection etc.,
while the products were shipped to an intermediate
point for the performance of any of the sort of
value added services listed above. Generally the
local rate was paid to the intermediate point. When
shipped to the final destination the difference
between the through rate from the original point of
shipment to final destination less the amount
previously paid to move the product to the
intermediate were paid to complete the transaction. more...
February 2006
FAILURE TO SPECIFY THE PROPER RELEASE VALUATIONS IF
PROVIDED FOR IN THE TARIFF OR CLASSIFICATION
DESCRIPTION
While articles of extraordinary value are prohibited
for shipment via motor carrier, there are many
articles that have differing ratings related to the
amount of value declared for the product on the bill
of lading. Item 99400 of the National Motor Freight
Classification, lists a value of less than $1.50/lb
@ class 100, a released value of $1.50 but less than
$5.00 is classified at class 250, and value in
excess of $5.00 but less than $7.50 at class 300. If
the shipper fails to execute the released valuation,
charges will be assessed on the basis of the class
for the highest value, more...
January 2006
PROPER DEFINITION OF PRODUCT SO IT CAN BE CONSIDERED
AS A "RECYCLABLE OR WASTE MATERIAL" ITEM.
Products which can properly be classified or
described as a "recyclable" are generally given a
lower classification, or special rate consideration
apparently an effort on the part of the carriers to
be sensitive to environmental implications, or
because of past requirements of the ICC which forced
this differentiation. Regardless of the reasons, the
fact is that such considerations exist and that the
shipper should be aware of this and appropriately
takes advantage whenever possible. more...
December 2005
BILL
OF LADING ERRORS THAT RESULT IN:
The above covers a great number of areas, all
relating to the single aspect of excessive costs
because of these potential errors on the bill of
lading. Unfortunately, all of them occur regardless
of how careful anyone may be or wants to be. Some of
the excess costs can be very serious, and should be
avoided. Chocolates being shipped in the middle of
winter without temperature controls can result in a
very costly damage claim. more...
November 2005
Selection of
optimum service/cost port for imports:
All the requirements outlined in no. 10, are equally
valid in making a determination regarding the
optimum cost port for imports. It is important to
understand that the terms of sale are very critical
in assigning responsibility for the various costs
that may be incurred while the products are in
transit from the foreign origin to final destination
in the USA. Experience has determined that the
seller is not nearly as capable in making the lowest
cost decisions for
more...
October 2005
Selection of Optimum
port comparing cost and service exports:
It is essential that all cost elements be reviewed
periodically when making export shipments on a
regular basis. There are a very surprising large
number of cost elements, which differentiate each of
the ports and these can change from time to time.
The comparison measures also vary substantially from
port to port. All are extremely critically
important! Some of these are:
more...
September 2005
Evaluating total
cost trade-offs between container vs. break-bulk on
International shipments
Most international shipments are well suited to be
moved in a container load environment. This is an
excellent alternative to shipping products via a
break bulk service. Break bulk shipping entails
added costs that can sometimes be overlooked in
making cost comparisons. Often marking requirements
are different and usually fewer markings overall on
container shipments. It may only require marking
each pallet, rather than each unit on a pallet. The
actual packaging requirements are very different,
since the break bulk ocean shipment environment is a
great deal harsher than the demands for safe
packaging when moving in container lots or in
consolidated small lots moving in a single
container.
more...
August 2005
Once
established, failure to use the properly established
classification description and rating:
Surprisingly, errors often are made in the
description of a product on bills of lading, even if
the proper description has been established with the
classification board. The exact and full description
must be used and preferably a specific national
motor freight classification item number typed or
pre‑printed on each bill of lading. Failure to
properly describe and apply the proper
classification, gives the carrier the opportunity to
use its classification “expertise” to properly rate
the product. The possibility of the carrier always
being correct is rather remote! But you can be sure
that if there is a rating alternative more favorable
to the carrier, that’s the decision that will be
made! This sort of missed opportunity to protect
against excess transportation costs can be a
substantial loss, and yet the actual freight "rates"
are correct but the "base" from which the charges
are derived is from an incorrectly used description
of the product..
more...
July 2005
Establishing the lowest
reasonable classification rating for the product:
One of the few carrier collective ratemaking
actions, which are in existence after the 1980 ICC
de‑regulation, is the retention of anti‑trust
immunity for establishing of classifications for
products that are to be shipped via motor freight.
Setting the classification rating is a very basic
and fundamental requirement in setting the base on
which freight charges will be billed as long as the
product is shipped on an LTL basis.
more...
June 2005
Failure to
adequately protect against the possibility of
duplicate billing by carriers and payment by
shippers:
Carriers make every effort to avoid these sorts of
billing errors. Regardless of their best efforts,
this type of error is not unusual. Well designed
computerized freight payment systems have various
types of built in duplicate payment checks, but even
these are not perfect.
more...
May 2005
Poor Audit Procedures
Both of Shippers and Carriers
Once bills have been presented, a lax attitude or a
poor job of monitoring the correctness of the rates
that are being used to arrive at the charges can
lead to excess payments for transportation charges.
more...
April 2005
Incorrect charges as a
result of errors on the part of the shipper or in
the presentation of charges:
There is a general perception that freight bills
presented for payment are always correct. This is
not necessarily so. This is the reason for concern
about the manner in which bills of lading are issued
and freight charges are paid.
more...
March 2005
Sequential Load/Unload
Delivery Program:
A well conceived, designed and implemented program
for providing a valuable service level to customers
is the creation of a contract or a proprietary
controlled delivery system. The design should
include a guarantee of on‑time delivery (no
fabricated excuses, please!) for orders received for
shipment by a specified cut‑off time of day.
more...
February 2005
Failing to
consolidate small shipments
One of the single largest potential gold mines for
cost savings is the ability to consolidate small
Shipments. Reductions in costs of as much 40
to 80% are possible, and surprisingly,
simultaneously improving customer service levels!
Large volumes of small shipments demand a good
program of consolidation in order to optimize the
best possible cost/service/benefit options.
more...
January 2005
Selecting a Mode of Transportation Without Regard to
Cost/Service Options
Often, decisions are made based on a perception that
a simple rule such as "all shipments must be made
within 24 hours"; must always be via air or some
other premium type service. There are generally
alternate less costly means to accomplish the same
delivery or service requirements. For instance, many
if not most over night air shipments going
relatively
more...
December 2004
Added Costs Due To September
11, 2001
Due to the events of September
11, 2001 airlines have been forced to increase
their security measures. All packages must be
more closely scrutinized to avoid a repeat of
the World Trade Center and Pentagon disasters.
The impact of this for shippers will be a slight
slowdown in transit times and added costs.
more...
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