Transport companies love to confuse their customers into paying more than they should for their freight, and they get away with it because most customers aren’t even aware that they’re being massively overcharged. Complicated calculations, incomprehensible formulas and the general smoke and mirrors techniques employed by many transport companies can lead to customers paying thousands more than they should for their freight each year.
Here are the four main ways that freight companies extract more money than they should out of their customers.
Many transport companies charge a fuel levy as standard and it’s a practice that’s not usually questioned by their customers. If you look around you’ll see a wide variation between different freight companies but one thing they all have in common is that they usually charge a retail priced based formula when they get their fuel at wholesale prices. Fuel companies also receive a government rebate on their fuel which means that they are not as out of pocket by their fuel costs as they might make out.
2. Variations in rate card
Have you looked at your transport company’s rate card? There can be several pricing formats on a rate card including basic charge and kilogram, carton and pallet rates as well as a number of other fees that you may be slapped with here and there. The rate card structures can be incredibly confusing, and can lead to you paying much more than you need to for your freight as well as spending money on additional charges that may or may not be necessary.
3. Zone to postcode files
You would think that a major city like Sydney would be the same for all the different transport companies but this is far from the case. Each and every transport company has their own zone structure and each zone has their own different postcode range. This means that if you’re sending to a capital city and you want to avoid paying regional fees, you need to check the individual file for your carrier to ensure where you’re sending to falls into their definition of metropolitan.
4. Cubic conversion
Cubic conversion rates make a big difference to the amount of freight you will be charged for and with standard cubic conversion factors of 250 or 333 you may be paying far over and above what you should be. Cubic weight is calculated by length multiplied by width multiplied by height then multiplied by the conversion factor. If you compare the dead weight of your items to the charge weight you may be surprised how much more you’re paying for than you should be.
Revenue raising tricks are common throughout the transportation industry and while you may be able to negotiate on some, your best weapon against being overcharged is knowledge and constant monitoring of your invoices. A freight auditing service can really help you get to grips with your freight charges and see where you’re paying too much or having the wool pulled over your eyes.