Client‑Facing Answers to Common Questions

Q: What is a gainshare? 

A: Gainshare is one of the ways AFS charges customers. The term means "we only win, when you win." For example, if we save a customer $10 on a shipment and we have agreed to a 50% gainshare, then AFS makes $5 and the customer saved $5. Gainshare is related to a "benchmark" (see below), where both AFS and the customer agree on what the cost was before AFS. If our work helps them generate savings over the benchmark, then we invoice the customer for 50% of the savings. If there's no measurable improvement, they don't pay AFS any "gainshare commission" for that shipment. 

Q: What is a benchmark?

A: A benchmark is a measure of what a customer was paying to ship, by mode (ex: LTL, Parcel). At AFS, benchmarks are required for LTL and Parcel gainshare customers (those who pay us a gainshare %) but are extremely rare in any mode. For LTL and Parcel, benchmarks are the lifeblood of how we prove our value to customers and how we are paid via gainshare. A benchmark is normally a %. It's a weighted-average discount % that a customer has paid up until they signed up with AFS. Carriers use "base rates" (see below for details) to calculate a price and then they discount that price. With some proprietary magic from AFS, we generate a benchmark that is the discount rate the cilent was paying on-average. The benchmark is fundamental to AFS' success with each "gainshare" customer. This benchmark is NOT secret to the customer and is explained at the beginning of implementing our program. At any time, customers are free to ask us to show it to them, however, we don't broadcast this or just email it to them. It's confidential information b/t AFS and our customer and is not to be given to AFS' competitors or carriers.

Q: What are base rates, discounts and accessorials?

A: Carriers make money honestly, but they've built a model that is convoluted for shippers (aka "the company who's paying for the shipment") to understand. This is why AFS exists. LTL, Parcel, Truckload, Courier and Freight Forwarder (aka International) carriers each have their own approach to rating. Let's focus on LTL, Parcel and Truckload.

LTL: Each carrier offers a fixed cost, based on the combination of (1) ZIP-to-ZIP (aka "OD pairs" or "Origin/Destination pairs") + (2) freight class (18 different types, from class 50 to class 500) + (3) weight range (ex: L5C, meaning less 500 lbs & 5C-1M, 500-1000 lbs, etc). Without getting into more details, imagine that there are millions of combinations possible. This is just the base rate. Then the carrier offers a discount on that base rate. Then finally, the LTL carrier charges accessorial fees, namely a fuel surcharge which is a % of the subtotal. Other accessorials that can be charged include residential delivery, liftgate, appointment notification, etc.

Parcel: Each carrier offers different service levels (ex: Next Day, Ground, etc.). Within each service level, there are Zones (aka regions) that encompass all ZIP codes or countries. In each Zone, there is a rate based upon the weight, from 1-150 lbs. The combination of these factors will provide a base rate. Then the carrier offers a single, contracted discount + an "earned" discount based on volume. A parcel carrier contractually pushes customers to use more volume and get more discount. Then, just like LTL, parcel carriers charge accessorials such as fuel surcharge, residential delivery and 100s of other fees (literally... their service guides can be nearly 200 pages long).

Truckload: Each carrier bases their pricing on a cost per mile and a fuel surcharge, a much simpler approach than LTL and Parcel. Because truckload means the full truck is being used, the shipper is only paying for the driver's time and cost to use the equipment, going from point A to point B. While it can vary, truckload carrier accessorials tend to be based on waiting times, lumper fees (3rd party workers to load/unload freight), tarp fees, etc.

Q: Why am I getting charged a weekly billing fee from AFS?

A: AFS not only makes money from gainshare but also from fees such as "Weekly Processing Fee" or "Per Bill Fee" or "Per Tracking # Fee." Customers pay AFS to use its shipping expertise to "cleanse" their carrier datasets (we also call this "processing") so they can compare all of their shipping activity in the same format. The weekly fee, for example, is AFS' standard fee for receiving, cleansing, processing and paying all of their carrier invoices (NOTE: carrier payment is called "settlement"). 

Q: How does AFS justify its processing fees?

A: Sometimes, customers will pushback on a weekly processing fee. "Why am I paying you $65 every week when I can go to __(competitor name)__ and just book a shipment?" At AFS, we're more than just a "broker" or "reseller." Those companies are focused on booking, tracking and invoicing only, whereas AFS is focused on setting up a program for you that drives carrier compliance (lowers cost), invoicing accuracy (lowers cost) and master data management (lowers cost by seeing your full supply chain picture). AFS is not just nickel-and-diming customers with a fee. If they were to perform all of these steps on their own, it would cost them $00s or $000s per week to be as good as AFS (expertise with carriers, standardization, business rules). The weekly fee is a small fraction spent to (1) avoid the pitfalls resellers and (2) outsource their headaches to professionals like AFS.

Q: Why does AFS send the carrier multiple checks for the same carrier invoice? (GVL related)

A: AFS issues payments by client location, not by individual carrier invoices. That means one check may cover multiple carrier invoices as long as they relate to the same client location.

Q: Why are my credits not processing? They've been in the system for weeks. (GVL related, excluding Watsco)

A: Credits are processed at a client location/carrier remit level as our system doesn’t allow to have negative checks written. So if a credit memo of $10,000 is sent by R&L for client location A, we have to have $10,000 of invoices from R&L (same remit address too) in client location A for them all to process. If we only have $8,000 in client location A, the credit will not process until we receive the same amount of debts as the credits - same carrier, same carrier remit, same client location.