Parcel Dictionary
ACCESSORIAL CHARGES – These are charges assessed by a carrier for services provided in addition to basic transportation, services that are deemed in addition to the basic transportation normally provided. This can include address correction information, rural delivery, fuel costs, residential delivery, etc. Sometimes these charges can make up 30% of the final bill.
AUDIT – To review a bill in order to pay less and/or get refunds. The idea is to do a detailed review and catch any errors in billing on the part of the carrier and correct these, which results in a reduction of the amount needing to be paid. Failures on the part of the carrier are also found an noted, for follow up in getting refunds for failures to deliver on time or failure to deliver at all. All of these add up to less money paid out to the carrier.
BILL OF LADING – This is a document that serves as the contract of carriage between the shipper and the carrier.
CLAIM – This is a charge made against a carrier for a failure of some kind, such as late delivery, loss of the shipment, or a billing over-charge.
DELAYED AUDIT – Rarely done, but the only real way to find and get the refunds for lost packages. The reason is that you have to give the carrier time to deliver a package, before an audit can validly say that it never arrived. The pre-audit done by freight companies, being done at the time the bill arrives, does not allow for this, and any subsequent post-audit is auditing on the same trails as the first audit, so also does not finding possible refunds for lost packages. A delayed audit can be the most profitable audit done in parcel shipping.
DIM WEIGHT – “DIMENSIONAL WEIGHT’ - A method of calculating additional charges for packages that are not in usual standard dimensions. When usual standard dimensions as defined by the carrier are violated by an irregular shaped package, a different scale of charges are assessed on the package assigning an arbitrary ‘weight’ to the package based on its dimensions, and the package is billed as if it weighed that arbitrary amount assigned.
ELECTRONIC DATA INTERCHANGE (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention.
EDI is considered to be a technical representation of a business conversation between two entities, either internal or external. Note that there is a perception that "EDI" constitutes the entire electronic data interchange paradigm, including the transmission, message flow, document format, and software used to interpret the documents. EDI is considered to describe the rigorously standardized format of electronic documents.
FREIGHT PAYMENT COMPANY - The modern model of a Freight payment company has been with us since the 1920’s. The freight payment industry was actually formed by a series of Banks when the transportation marketplace was heavily regulated. Motor carrier bills had to be paid within 7 days and rail bills needed to be paid within 5 days. To meet this requirement the banking community, shippers, and carriers formed what was known as The National Association of Freight Payment Banks.
With Deregulation of the transportation industry in 1980 this began to change. Credit terms could be negotiated between shippers and carriers for more reasonable periods of time.
The process has become much more robust with bills being audited before they are paid (pre-audit). This includes: a verification of freight rates for compliance with the customers contracts, checks for previous payment, checks for shipper’s liability and other edits and validations to insure the bills meet the shipper’s requirements for payment.
A freight payment service usually consists of one or more levels of combined services. They may include freight audit, information reporting for logistics, and work with a combination of both Electronic Data Interchange, and paper freight bills.
The real thrust of the business today is actionable information that shippers receive via the web or create from their vendor’s web site on an ad hoc basis. Sophisticated reporting tools allow Freight Payment Vendors and their customers to easily perform calculations, create graphics, generate pivot tables, and e-mail reports on a scheduled basis.
LESS-THAN-TRUCKLOAD (LTL) CARRIER: A trucking company that consolidates less-than-truckload cargo for multiple destinations on one vehicle.
GUARANTEED SERVICE REFUNDS - Many of the shipping carriers offer guarantees on their delivery times. These are known as GSR guarantees or "guaranteed service refunds"; if the parcels are not delivered on time, the customer is entitled to a refund. “On-time” is defined separately by each carrier, so these refunds can vary from one carrier to the other.
INCENTIVE RATE – This is a rate designed to encourage shippers to ship heavier volumes per shipment, or just an increased volume in order to achieve a better discount.
INTERMODAL - A single trailer or container that encounters multiple forms of transportation along its route, such as truck/ship/rail.
LOST SHIPMENT – Defined as a package that was confirmed to be picked up by the carrier, but for which no proof of delivery can be obtained. The shipper must be recompensed by the carrier for any lost shipments. The refund is for the cost of the contents up to $100. and the cost of shipping for each lost package.
MANIFEST - A document that describes the contents of a shipment in greater detail than a bill of lading. Commonly used as a checklist during unloading
MANIFESTED BUT NEVER SHIPPED – In parcel auditing, locating packages that were added to the manifest (and this were billed) but never actually shipped. These are eligible for refunds when found. The largest we ever ran across was for $50,000.
POST-AUDIT – Is usually defined as an audit done after the pre-audit done by a freight payment company, which verifies the previous work, or finds additional sources of refunds. The usual return on post audits is not high.
SHIPPER - Consignor, exporter, or seller (who may or may not be the same) named in the bill of lading as the party responsible for initiating a shipment.
TRACING – Determining where a shipment is in the course of a move.
TRANSIT SCAN – A scan noted on the bill of a carrier showing transit or movement of the package.
TRANSIT TIME – The total time that elapses from shipment pickup to actual delivery of the package.