A variance is when a carrier's invoice comes back higher than it was originally quoted, and they are an unavoidable obstacle in the freight universe -- with nearly 20% of all less-than-truckload (LTL) freight shipments coming back with a variance from the carrier. There are many different variances that could come back on a shipment, some are more common than others and those are the ones we are going to cover here.
Did you know that some carriers have up to two years to come back with a variance on a shipment?
Carriers have up to two years to attach variances to a shipment. While most of the variances are attached within the first few weeks, some don’t come until months later. The industry is changing, albeit slowly, but carriers are getting smarter about their shipments and the loading of their trucks. This change also applies to variances. We are seeing less and less variances late in the game and most carriers send them out within a week of the shipment being delivered. That being said, there are still some that come later.
Variances are headache inducing, so let's consider some ways to make them less frequent.
1. Reclass/Reweigh Variances
A reclass/reweigh variance is one of the most common variances seen in the LTL world. Carriers are always on the lookout for ways to increase the profitability of their trucks. This has led a lot of carriers, especially the budget carriers to smartening up about how they weigh and stow items on the truck.
Most carriers are switching to a Volumetric Pricing structure, which allows them to better estimate how a truck is loaded. This way of looking at the freight world is new, and new things always lead to confusion, which leads to extra charges. A reclass/reweigh can be an expensive variance, especially if the class you picked is drastically different from what the carrier classifies the shipment as. Most carriers are weighing every shipment that goes on one of their trucks. Having the most accurate information on your shipment is key.
2. Liftgate Variances
A liftgate is a device on the back the tuck that allows for easy unloading from the truck level to ground level, which is a requirement for all residential deliveries of LTL freight. However, most carriers do not equip all of their trucks with liftgates.
This can lead to problems if the consignee location is at ground level and they do not have access to another means of unloading the truck, like a forklift. If this happens, the driver will have to leave and come back another day with a truck with a liftgate. This means you will most likely be charged a redelivery fee on top of the liftgate fee.
Like most of these variances, knowledge is the key to avoiding extra charges. Knowing the situation at your consignee’s location and alerting the carrier is the best way to avoid any extra charges. Not all carriers charge a liftgate fee, but the budget carriers are more likely to charge you for them. If the carrier is one of the ones that does charge for a liftgate, you are most likely going to get charged for it regardless of if you disclose the need for one up front. It might be cheaper, or not, again knowledge is power.
3. Redelivery Variances
A redelivery fee is self explanatory, but here is an explanation anyway. It's a fee that carriers attach to a shipment when they need to attempt delivery a second time. These fees are usually around $75 and can be difficult to dispute.
LTL carriers are not in the business of wasting time. The drivers are on a schedule with 15-20 pickups and deliveries every day, and they don’t typically like to spend a lot of time trying to find the right address or the right suite number in a building. Accurate information on your BOL is the best defense against this type of variance.
If the consignee requires a delivery appointment, make sure it is stated on the BOL. If either the pickup or dropoff location is a limited access location, meaning a tight space, unavailable during normal business hours, or behind a secure gate, that information should all be noted on the BOL. The more information given to the Carrier upfront, the more ammunition you have when it comes to disputing any variances they might attach to the shipment later.
4. Residential Delivery Variance
A residential delivery fee can be applied to any shipment being delivered to a residential area - even if it is a home business. Most residences do not have a dock for the truck to back up to or a forklift on site to unload the truck. There is also the hassle of dealing with neighborhoods and tight corners for the driver to deal with. Carriers are looking for the easiest way to drop off the shipment. When it comes to residential deliveries, carriers might need a liftgate, a pallet jack, or even a moffett if the shipment is particularly heavy to unload the freight.
All of these things are going to slow down the driver’s day, but noting on the BOL that it will be a residential delivery or pickup will help avoid redelivery fees and cut costs and headaches in the long run.
5. Corrected Bill-of-Lading (BOL) Variance
Some carriers have been known to charge for incorrect information on the BOL because they have to create a corrected BOL (CBOL) if the address is wrong, or if it's missing a suite number. If the pickup location requires an order number or a release form and the carrier wasn’t informed ahead of time. All of these things can lead to extra charges from the carrier. Making sure you have all the information before shipping your items is key.
The main thing you can do to avoid variances is to be informed about what you are shipping. Knowledge is power. The more information you provide the carrier, the less chance they will come back with variances and extra charges later. Think of your shipments like 80s and 90s PSAs and take to heart their slogan. The More You Know.
If you have any questions about your LTL freight shipping, you can always sign up to see Shipwell's connected freight platform, which is designed to cut down on freight variances, or reach out to one of our freight experts for guidance or a freight quote.