If you have any questions or you would like to learn more about pallet exchange fee, read this guide.
It has all information you’re looking for – keep reading.
- What Is A Pallet Exchange Fee?
- When Do Carriers Charge A Pallet Exchange Fee?
- How Much Is The Pallet Exchange Fee?
- Will The Number Of Pallets Used Affect The Pallet Exchange Fee Rate?
- Do All Carriers Charge A Pallet Exchange Fee?
- Is Pallet Exchange Fee Legal?
- What Is The Difference Between Pallet Rental Fee And Pallet Exchange Fee?
- How Can I Reduce/Avoid Pallet Exchange Fees?
- Is There â€˜Free Timeâ€™ In Relation To Pallet Exchange Fees?
- Does The Pallet Exchange Fee Apply To All Shipments?
- Will The Pallet Exchange Fee Impact The Ultimate Cost Of Shipping?
What Is A Pallet Exchange Fee?
It is a fee charged by the carrier to the owner of the cargo in case the owner’s appointed trucker does not provide another pallet.
Which is to be exchanged at the time of collection of the cargo.
Pallet Exchange Fee
When Do Carriers Charge A Pallet Exchange Fee?
It is charged when cargo is shipped through cargo consolidation such as less-than-container load (LCL), buyer’s consolidation (BC), and air freight shipment.
In cargo consolidation, the local vendors usually supply the cargo to the carrier loose or palletized cargo before they can consolidate them.
After shipping the cargo, the consolidated cargo is taken to a deconsolidation center where the consignee’s appointed truckers collect the cargo.
In case the trucker does not provide the empty cargo pallets on pick up, the carrier charges a pallet exchange fee.
The fee is used to account for the loaded pallet given to the trucker.
How Much Is The Pallet Exchange Fee?
The pallet exchange fee varies depending on the carrier and location.
It is billed to the consignee as a destination fee.
The fee accounts for the cost of the pallet and ranges from $3.00 to about $10.00 per pallet
Will The Number Of Pallets Used Affect The Pallet Exchange Fee Rate?
The exchange rate for a single pallet is rather very cheap.
In cases of a large volume of consignment, the number of pallets will also increase.
The cost for the pallets will add up quickly.
In such situations, the consignee can negotiate for a better rate and if possible, to be waived completely.
Plastic vs wood pallet
Do All Carriers Charge A Pallet Exchange Fee?
Pallet exchange fee exists in the shipment industry.
The fee acts as a way of recovering the cost of the pallet in case it is given to the trucker.
Most carrier factor in this fee in the CBM (cubic meter) rates when consolidating LCL or air freight cargo
Is Pallet Exchange Fee Legal?
The pallet exchange fee is legal.
It is charged for the pallets that are handed to the receiver without a replacement.
The fee is used to recover the cost incurred by the carrier to acquire the pallet.
What Is The Difference Between Pallet Rental Fee And Pallet Exchange Fee?
A pallet exchange fee is a levy charged to exchange pallets between carriers and the consignees.
pallet exchange fee illustration
The pallet rental fee, however, is a fee charged by the pallet rental company to use their pallets in shipping for cargo.
How Can I Reduce/Avoid Pallet Exchange Fees?
Pallet exchange fee can be reduced or avoided through the following methods:
Cargo consolidation: you consolidated your cargo to fill Full Container Load (FCL).
It is cost-effective if you can fill the container.
Alternatively, evaluate the shipper’s ability to hold the cargo until you fill the FCL container rather than shipping LCL cargos frequently.
Here, the carrier will not use its pallets when consolidating your shipment.
This method is rather difficult.
It may need a proper case study to compare the shipping cost to the extra pallet exchange fees.
Negotiating for lower rates:
When shipping large consignments, pallet charges may add up quickly even though the price per piece is very low.
It is advisable that you negotiate a better exchange fee or even waived depending on the quantity of the cargo.
Procuring your pallets:
It is very economical to use your pallets since the pallets have no markup.
This saves the cost of shipment in the long run.
Pallets are available both as new and refurbished and are very durable.
Fixing worn-out pallets has a very minimal fee compared to replacing them.
Pallet pooling: this is relying on pallet rental companies to provide and manage pallets.
It relieves the supply chain companies from the management of pallets.
It offers a scalable pallet supply even on short notice.
Is There ‘Free Time’ In Relation To Pallet Exchange Fees?
The pallet exchange program lacks the flexibility to accommodate the rapidly changing demand.
The management of the pallet fleet by suppliers and warehouse managers is very tedious.
The pallet exchange program has limited control over the quality of the pallets exchanged and their state of the hygiene
Does The Pallet Exchange Fee Apply To All Shipments?
The pallet exchange fee mostly applies to air freight and LCL shipments.
Airfreight and LCL shipment involves cargo consolidation by the carrier of freight forwarder.
During the consolidation of cargo, the carrier may return the pallets to the cargo delivery truckers.
In this case, they will have to use their pallets in the Container Freight Station (CFS) or at the airport consolidation center.
At the consignee location, the cargo is moved to the deconsolidation center.
Upon pick up, the appointed trucker must provide empty pallets to replace the loaded pallets.
In case the trucker does not have empty pallets, the carrier has to give up their pallet for transportation of the cargo.
Once the pallet is given, the consignee is charged the pallet exchange fee to account for the pallets given.
Will The Pallet Exchange Fee Impact The Ultimate Cost Of Shipping?
Pallet exchange fee today is most incorporated in the CBM rates during the consolidation of LCL cargo or at the air freight cargo facility.
It is rarely featured in the invoice or shipping quotation.
If it does feature, it is usually addressed as a destination fee.
It increases the overall shipping cost of cargo to its designated destination.
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