The Situation
A regional LTL carrier contracts with 38 shipper accounts for recurring lane freight, generating 38,000 shipments across the year. The master service agreements include specific terms for detention and demurrage charges (free time windows, then escalating day rates), accessorial fees (liftgate, residential delivery, redelivery), a published fuel surcharge index with automatic quarterly adjustments, and anniversary rate increases for renewing lanes. During a 12-month audit of billing data against shipment records and contract terms, the revenue team discovered significant leakage: detention events were logged by drivers but dropped at billing due to processing gaps; accessorial services were performed and documented but not invoiced; fuel surcharges lagged the index by two adjustment cycles; and anniversary rate increases were missing from the rating engine on renewal lanes. The audit occurred before the next renewal period, allowing corrections to be applied to the billing system and customer master data.
Value-Claiming Clauses
Section 2.4
Detention & Free-Time Terms
Customer receives 48 hours free time for drop trailers. Detention charged at $75/day thereafter, prorated hourly after 24 hours. Documented detention events trigger automatic billing.
Section 3.1
Accessorial Schedule
Liftgate ($35/occurrence), residential delivery ($40/stop), redelivery ($50/stop). Accessorials are logged by driver and transmitted daily to billing; carrier authorizes before service.
Section 3.3
Fuel Surcharge Index Mechanism
Fuel surcharge calculated quarterly based on published DOE diesel index. Surcharge applied at invoice; any index change is effective two cycles following the index publication date.
Section 2.2
Annual Rate Adjustment
Rates increase annually on the lane-anniversary date by the lesser of 3.5% or the CPI increase. Increase applies to shipper’s base rates; notification required 60 days prior.
What the Analysis Found
38,000 shipment records were matched against 1,200 invoices issued to contracted shippers. Detention events, accessorial service logs, fuel index dates, and contract anniversary dates were cross-referenced to identify missing charges. Rating engine and billing procedures were updated to enforce these controls.
Detention & Demurrage Never Invoiced
1,214 documented detention events beyond free time; fewer than half reached an invoice.
$52,840
Accessorials Performed but Unbilled
Liftgate, residential, and re-delivery services logged by drivers but dropped at billing.
$34,925
Fuel Surcharge Under-applied
Surcharge lagged the published index by two adjustment cycles on three lanes.
$23,140
Contract Rate Increases Missed
Anniversary increases on two shipper agreements never entered the rating engine.
$7,400
Total Unbilled Revenue
$118,305