Allowance

In shipping and logistics, an “allowance” refers to a reduction in shipping costs that a carrier may offer when they do not provide necessary equipment, such as a pallet jack or crane, and the shipper instead supplies the equipment.

1. Equipment Provision: Carriers typically have specific equipment requirements for loading and unloading goods from their vehicles. If the carrier fails to provide the required equipment (like a pallet jack or crane), and the shipper has to supply it instead, the carrier may agree to reduce the shipping cost as compensation.
2. Negotiated Term: The allowance is usually negotiated between the shipper and the carrier as part of the shipping contract or agreement. It reflects a mutual understanding that the shipper is assuming some responsibility or cost that the carrier would typically cover.
3. Documentation: To claim the allowance, the shipper may need to provide documentation or evidence that they supplied the required equipment. This ensures transparency and clarity in the billing and payment process.
4. Varied Practices: Practices regarding allowances can vary between carriers and shipping contracts. Some carriers may have standard allowances outlined in their terms and conditions, while others may negotiate allowances on a case-by-case basis depending on the specific circumstances of the shipment.

An allowance in shipping represents a reduction in costs that compensates the shipper for providing equipment that the carrier was expected to supply, ensuring that responsibilities and costs are fairly allocated between the parties involved in the transportation of goods.