Freight Costs can be a Major Consideration in the retasking of excess inventory.
George Muha of Logistics Management shows several ways to save real money on the following Article
It used to seem like motor carriers would “look the other way” when it came to the way shippers filled out their bill of ladings. As long as the class going along with the description was close to what they were shipping, no one bothered them.
However, with carriers generating millions with Weight & Inspections, shippers can no longer be lax in this area.
The way it is nowadays is if a shipper does not fill out their bill of lading accurately they get nailed not only with the extra charges but also with a “Weight & Inspection” fee (which can be as high as $30.00).
When visiting with a prospect or customer, I always review their bill of lading. Many times there will be a vague description on their bill of lading. In many cases, the description has nothing to do with their product line.
This past year, a prospect had a hand written description of “TOOLS” on their bill of lading. However, they manufacture drive shafts for race cars and other engine parts. They do not ship any kind of tools.
What a Bill of Lading Should NOT Look Like
This description leaves too much up to interpretation by the carrier.
What was interesting in this example is that when we properly classified their products, most of the engine parts were actually a lower class than the class the carriers were billing them at under “TOOLS”.
By doing nothing more than helping them fill out their bill of lading properly, they lowered their freight cost by about 12 percent. Of course, the president of that company and I are friends for life now.
Don’t laugh, this happens more than you think. In fact, many companies I call on are putting vague descriptions on their bill of ladings that are actually getting billed higher than if the description was properly filled out.
Most companies are really not at fault. What seems to be the culprit is that years ago, a local trucking rep came in to help the shipper to properly fill out the bill of lading. Back then, they told the shipper of a description that they felt they could “get away with” or they actually gave the correct description. But through the years, two things have happened — First, the carriers have sharpened their inspecting skills, and second the National Motor Freight Classification has updated many of their classes (either higher or lower).
Now, incentive craved dock workers and clerks search out flaws in bill of ladings to generate revenue. The vaguer it is the better. That is because if any part of the bill of lading is left to speculation, they will speculate at the highest possible class.
What can you do?
There are two things that you can do to eliminate carrier inspections. First, get the weight right. Once the carriers determine you to be one who “guesses low on weight”, then you are flagged in their system. You will be nailed every time.
Second and most important: be as accurate as possible with your description. Make sure you have the most up to date NMFC number followed by the description (the way it is read in the NMFC). What happens is, when your bill of lading is properly filled out, the clerk at the carrier is more likely to move to the next bill of lading. But when it is vague, that is when they have you in their evil web.
What a Bill of Lading SHOULD Look Like
This is the text book way to fill out a bill of lading.
It is very important to follow these instructions more than ever. Transportation guru’s are actually predicting sometime in the not too distant future, that carriers will scrap this class system altogether and use shipment density to rate freight. Some carriers are actually measuring pallets and boxes when they come to pick up freight now. You may have seen them doing this and wondered why they were doing it.