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22 Jun 2016

Sunshine, Surfing, and Surcharges?

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California Compliance Surcharge

Thinking about California often brings to mind thoughts of sunshine and surfing; however, if you’re in the business of shipping goods, the new California Compliance Surcharge being billed by some LTL carriers is probably first and foremost in your thinking. As of May, two prominent LTL carriers, Old Dominion Freight Line and ABF, added surcharges to the majority of freight invoices for shipments originating from or destined to the state of California. Carriers have advised that these charges are necessary to offset the state’s higher operating costs and stricter regulations such as requiring trucking companies to pay drivers for rest breaks and time spent refueling.

These new charges can be found in the carriers’ rules tariff.  For ODFL, see tariff ODFL 100-K Item 375 effective 5/2/2016–the charge is $5.95 per shipment. For ABF, see tariff ABF 111-AI Item 162 effective 3/1/2016–the charge is $5.92 per shipment.

These surcharges do not come without complaint as they can add up quickly for those that do business in and out of California. Industry allies in Congress have introduced bills aimed at preventing states from applying regulations like California’s to truckers. Some view these additional charges as the trucking companies’ way of supplementing revenue in a weakening freight market. If this news isn’t surprising enough, there is even talk

about suggesting similar charges such as a surcharge for shipments going to the Northeast where parking is severely limited and costly to truckers.

With all these changes, you need experts working on your behalf to ensure you get what you pay for. AMTR’s expert auditors keep on top of all the freight news so you don’t have to.

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