Protect Against Costly Back Charges When Shipping Freight

Stay Informed of Dimensional Pricing Models to Minimize These Unexpected Charges

mins

7 May, 2025

In today's fast-paced logistics environment, back charges due to incorrectly classified shipments can significantly impact your bottom line. Understanding and managing these costs is crucial for financial health and operational efficiency. This article explores the importance of maintaining thorough audit records and effective strategies for preventing these costly back charges. This is particularly important for warehouses and distribution centers as dimensional pricing models become the norm.

The Importance of Audit Records

Audit records are your first line of defense against back charges. By keeping detailed and accurate documentation of all transactions, shipments, and communications, you can:

Identify Discrepancies: Thorough records allow you to quickly identify and dispute unexpected charges.
Support Claims: In the event of a dispute, having comprehensive records helps to substantiate your claims and minimizes financial losses.
Enhance Compliance: Proper documentation ensures compliance with industry regulations and freight contracts, reducing the likelihood of penalties.

Utilize equipment that can automatically capture legal-for-trade dimensional and weight data for your records to eliminate these issues.

Understanding Dimensional Pricing Models

Dimensional pricing models are pricing strategies that take into account both the physical dimensions and the weight of products to determine their cost. This approach is common in logistics companies around the world, where shipping costs can vary significantly based on the size and weight of packages.

Globally, different organizations will set the respective pricing models that DCs and freight carriers alike must follow. It’s important to stay aware of these guidelines so that your organization can actively prepare and help minimize the amount of back charges due to incorrectly declared shipments.

One example of dimensional pricing updates can be found in the United States with the National Motor Freight Classification (NMFC) standard. Starting in 2025, NMFC will implement dimensional pricing changes that will result in one standard density scale for freight when other handling and liability issues are not present. This means pricing models will depend on correctly dimensioned freight even more for pricing classifications.

For DCs, understanding the new classifications and how they apply to your shipments is essential to avoid unexpected charges. Strategic planning is required and companies must reassess their current measurement processes to ensure accuracy and compliance.

Learn more about NMFC changes and how they can affect your business.

So how exactly can your DC prepare for dimensional pricing models?

Efficient Handling: Streamlining operations with automated freight dimensioning, weighing, and scanning systems can improve data accuracy and reduce the likelihood of manual errors that lead to back charges.
Legal-For-Trade Certification: Using equipment that is certified legal-for-trade ensures that your measurements are correct and can provide an audit trail if there is ever a discrepancy with a freight carrier.
Collaborative Relationships: Maintaining strong relationships with carriers and suppliers can help negotiate better terms and clarify responsibilities, minimizing misunderstandings. When all operations utilize automated measuring and weighing devices, the likelihood of disputes lowers drastically.

Freight and LTL Increased Revenue Recovery Opportunities

On the other side, freight and LTL carriers can use dimensioning systems to assist in revenue recovery efforts.

Revenue recovery comes into play when carriers receive shipments that are incorrectly billed or labeled. If they have a shipment that is larger than declared, this can impact load planning efforts and transport costs. To mitigate these costs, carriers can use legal-for-trade dimensioners to verify shipment measurements and then go back to the shipper with the data if there are any discrepancies.

There are several benefits for freight and LTL carriers when they have complete and accurate measurement data:

Identifying Cost-Saving Opportunities: Operations can analyze shipping patterns and identify areas where they can save costs and increase revenue recovery.
Leveraging Technology: Implementing advanced logistics management systems can help track shipments, optimize routes, and analyze data to maximize profitability.
More Accurate Cost Assessment: By pricing based on the actual space a shipment takes up, carriers can more accurately reflect the costs involved in transporting goods. This can lead to better pricing strategies that reflect true operational costs.
Better Rate Negotiations: Understanding classifications and pricing can empower freight and LTL operators to negotiate better rates with shippers, ensuring that they are compensated fairly for the services provided.

Solutions for Freight Weighing and Dimensioning

Download the Freight Solutions Guide to learn how you can improve your end-to-end process visibility and optimize your operational efficiency.

Frequently Asked Questions

What are back charges, and why do they occur?

Back charges are costs imposed by a carrier or supplier due to discrepancies in shipping terms, miscommunications, or errors in billing. They often arise from shipping errors, missed deadlines, or damages.

How can I effectively manage audit records?

Implement a robust documentation system that logs every shipment detail, communication, and transaction and utilizes legal-for-trade equipment with certified data.

If I’m located in the US, what should I do to prepare for the NMFC dimensional pricing changes?

Start by reviewing your current shipping practices, understanding the new classifications, and optimizing your shipments to reduce costs. Reach out to one of our experts to help you determine the best measurement solutions.

How can Distribution Centers help reduce back charges?

DCs can improve inventory management, ensure accurate shipping processes, and maintain strong partnerships with carriers, which can all help mitigate back charges.

Search suggestions

Protect Against Costly Back Charges When Shipping Freight

Stay Informed of Dimensional Pricing Models to Minimize These Unexpected Charges

The Importance of Audit Records

Understanding Dimensional Pricing Models

How Warehouses and Distribution Centers (DCs) Can Protect Against Back Charges

Freight and LTL Increased Revenue Recovery Opportunities

TLD970 Dynamic Pallet Dimensioner

TLD870 Static Pallet Dimensioner

TLF820 Forklift Scale

Data Capture Software

Solutions for Freight Weighing and Dimensioning

Frequently Asked Questions

What are back charges, and why do they occur?

How can I effectively manage audit records?

If I’m located in the US, what should I do to prepare for the NMFC dimensional pricing changes?

How can Distribution Centers help reduce back charges?

Search suggestions

Protect Against Costly Back Charges When Shipping Freight

Stay Informed of Dimensional Pricing Models to Minimize These Unexpected Charges

The Importance of Audit Records

Understanding Dimensional Pricing Models

How Warehouses and Distribution Centers (DCs) Can Protect Against Back Charges

Freight and LTL Increased Revenue Recovery Opportunities

TLD970 Dynamic Pallet Dimensioner

TLD870 Static Pallet Dimensioner

TLF820 Forklift Scale

Data Capture Software

Solutions for Freight Weighing and Dimensioning

Frequently Asked Questions

What are back charges, and why do they occur?

How can I effectively manage audit records?

If I’m located in the US, what should I do to prepare for the NMFC dimensional pricing changes?

How can Distribution Centers help reduce back charges?

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