How often have you pulled up to a shipper or receiver’s yard, only to be left waiting for hours to get loaded or unloaded? Getting compensated for that detention time is a problem for a lot of small carriers or any driver getting paid by the mile, because the extra time spent at the loading docks equals less time putting paid miles under the tires. But what can you do about it right now?
Terms and Conditions Apply
You can start by putting together a Rules Circular that establishes the terms and conditions under which your company does business with shippers, receivers, brokers, 3PLs, freight forwarders, etc. Motor carriers were required to publish their service conditions before 1980, but after deregulation, the requirement became an option.
It's used to spell out the following:
- Governing Publications (mileage guides and tariffs)
- Scope of Operations
- Statement of Services (territorial area serviced, Interstate vs. Intrastate, Dry Van,
Temperature-Controlled, Intermodal, HazMat, etc.)
- Accessorial Services and Charges (Detention, Lumpers, Expedited or Exclusive Use
- Claims Liabilities and Limits
- Claims Processing and Salvage
- Credit and Collection Provisions
- Fuel Surcharges
There are plenty of reasons you should publish a Rules Circular anyway. And while it's no longer necessary to file rates or tariffs with any federal agency, a trucking company is still required, upon request, to provide a shipper a copy of the rate, classification, rules, and practices that apply to its shipment or were agreed to by the shipper and carrier. A Rules Circular meets this requirement. More importantly, if there’s no other written agreement between your carrier and the shipper, the terms and conditions published in your Rules Circular apply. If you have a website, posting it there fulfills the "published" requirement.
Get it in Writing
If you've published a Rules Circular that includes Detention and Free Time details under Accessorial Charges (“free time” being the allowable time a shipper or receiver has to begin loading/unloading a trailer before detention costs accrue), the customer may be held accountable for any time stalled out in the shipping yard or loading dock, as long as there isn’t a bilateral agreement between you and the shipper to the contrary. ("Bilateral" meaning signed, agreed to, and executed by both parties, which would overrule the Detention charges in your Rules Circular.)
A description of the charge on your Rules Circular might look something like this:
- Free time for loading or unloading is X hours after the scheduled arrival time, or X hours after arrival if no appointment has been set or if the carrier has not arrived by the appointed time.
- A detention fee of $X per hour applies when any carrier’s vehicle is detained beyond the free time if the detention is not due to vehicle disability or fault of the carrier.
You can decide what numbers should go where the X's are. The range of detention fees is as varied as the carriers who charge them. In other words, it's going to depend on the segment of the industry and type of freight hauled, plus driver pay for that segment. And like your linehaul rate, your detention fee also need to be competitive. Obviously, you're in this business to make money, and repeat business is more profitable than a one-time detention fee. Striking that balance is going to be different for every carrier.
Another option might be to wrap your detention charges into your hauling rates. We’ll talk more about that in a future blog post.
In the meantime, do you charge for detention time? If so, how do you calculate it? Let us know in the comments.