Demystifying Logistics

In the intricate landscape of e-commerce logistics, mystery charges from service providers can be a thorny issue. These unexpected fees, if left unaddressed, can significantly impact your bottom line. In this comprehensive guide, we’ll explore the most common types of mystery charges, effective methods to identify them, and practical steps to rectify these challenges.

Understanding Common Mystery Charges:

1. Additional Charges:

These charges usually relate to special handling or additional service fees that are not clearly defined by the logistics service provider on rate tariffs. An example of where these charges may be applied is inbound receiving where the 3PL logistics provider has charged for additional activities of receiving your inventory, even though it is not part of the agreed tariff.

How to identify them:

• Regularly review invoices against your agreed rate tariff and check for any variances.
• Scrutinize bills for unexpected fees related to special services you aren’t sure you agreed to.

Rectification:

• Clearly define and negotiate additional charges in your contract before commencing with logistics providers to ensure there are no surprises with your bills.
• Implement strict protocols to ensure your team is aware of and properly documents any additional services required.

2. Carrier Surcharges:

These charges relate to auxiliary surcharges where certain shipping carriers don’t provide a clear breakdown of how these charges are applied. Some such examples include energy surcharge, tailgate unload, address correction and oversize package surcharge.

How to identify them:

• Review the carrier rate guide regularly to ensure you have the most updated list of surcharges they apply.
• Use online shipping calculators to help you understand all fees associated with the shipment including surcharges.

Rectification:

• Negotiate with your carrier upfront if any of these surcharges can be waived. Usually, certain carriers are flexible in relation to additional charges that can be negotiated.
• Consider long-term contracts or partnerships with fixed fuel surcharge rates.

It’s difficult to plan for surcharge changes or to know when they will occur, but you can prepare for them. Annual rate increases are more certain, and you should plan for these accordingly.

Effective Monitoring Methods:

1. Automated Analytics:

Implementing advanced analytics tools can:

• Identify patterns in invoicing to detect anomalies and potential mystery charges.
• Provide real-time insights into cost fluctuations and unexpected fees.

2. Regular Audits:

Conduct routine audits of logistics invoices to:

• Uncover discrepancies in charges.
• Ensure that billing aligns with agreed-upon terms.

Proactive Steps for Rectification:

1. Open Communication:

Establish regular communication channels with logistics providers to:

• Address concerns promptly.
• Discuss any unexpected charges and seek clarification.

2. Contract Reviews:

Periodically review contracts with logistics partners to:

• Stay informed about any changes in pricing or terms.
• Ensure that the agreed-upon terms are being adhered to.

3. Negotiation:

Proactively negotiate terms with logistics providers to:

• Clarify pricing structures and eliminate ambiguities.
• Address any concerns or disputes regarding mystery charges.

By understanding the common types of mystery charges, recognizing their various names, implementing effective monitoring methods, and taking proactive steps for rectification, ecommerce retailers can navigate the complex terrain of logistics with confidence. Open communication, regular audits, and negotiation are key elements in maintaining transparent and mutually beneficial relationships with logistics providers, ensuring a smoother and cost-effective ecommerce operation.

Want to chat to a logistics partner who can help demystify your supply chain and costs so you can tap into global markets, why not get in touch with Borderless360 today? Contact us.