Detention fees can become a frustrating part of the shipping process. Anytime a shipper or receiver is hit with additional charges, they can prove to be not only frustrating but sometimes confusing. Detention fees will stack up when freight gets mishandled during a pickup or delivery.
A detention fee is assessed when a load is held at the pickup or delivery location longer than the allotted "free time". Rates of detention typically range from $80 to $100 per hour after the allowable 2 hours of load time is exceeded. If the time to load or unload takes too long, the driver will often leave and reschedule.
In this article, we take a deep dive into detention fees including what they are, how they’re calculated and potential ways to avoid them.
A detention fee is a charge that’s assessed when load/unload time exceeds an allowable limit as defined in a shipping agreement. For most shipping agreements, two hours is the allowable “free time” given before detention fees begin to accrue.
For drayage shipments, the time before detention kicks in is often reduced to one hour instead of two. Drayage moves typically take less time due to the relative ease of offloading a container.
In domestic truckload, a driver gets paid on the distance freight moves. Drivers are generally paid on mileage When drivers are held up for an excessive amount of time at a pickup or delivery, they’re not able to be on the road making money. Detention fees are in place to compensate drivers for this lost time.
Changes in the industry are constantly a hot button issue, even in 2022. There are numerous ways the industry has been adapting to change. Also, the effect of the global pandemic hasn’t exactly helped the situation of change within the industry either.
Whether it is a change in transportation laws, industry standards, or the inflation of detention prices, changes in the industry are always happening. For example, “the increased cost of detention has climbed to 25-30% over the past two years,” said Ian Morphy, Vice President at R+L Global Logistics.
The amount of time available to use a carrier's trucks or equipment without the penalty of an accessorial fee is considered free time. This grace period is known as free time and is the window of time to complete your shipment.
“Free time is the window of time in which freight is to become loaded or unloaded. Typically, the loading or unloading of freight is around two hours,” said Ian Morphy.
During free time, no additional charges related to your shipment are accrued. Whether your cargo is regionally or internationally shipped, imported, or exported, constant communication, preparedness, and shipment execution are required to avoid detention.
Several circumstances can lead to a fee when shipping goods. Generally speaking, a detention charge occurs when the wheels of a truck are not moving, and the driver or carrier needs to be compensated for their time.
When the loading or unloading of freight is unorganized, it becomes inefficient. In some instances, a driver will not wait for late or unprepared shipments to be loaded. Instead, they will pull away from the loading dock and continue their route to another pickup destination.
The main culprit is staffing issues at the loading or unloading area. After a dry run fee is established for the missed pick-up, the driver or carrier will then reschedule the load for a second attempt.
“Generally speaking, the charge for detention is between $80 and $100 dollars per hour. The detention rate has gone up over the past two years, increasing the cost per hour to $150 dollars per hour in some cases,” said Morphy.
|Shipment Type||Load/Unload Time||Detention Fee Per Hour||Total Detention Charge|
|Truck A - Load Pickup||One Hour||$100||$0.00|
|Truck A - Load Delivery||Two Hours||$100||$0.00|
|Truck B - Load Pickup||Six Hours||$150||$600.00|
|Truck B - Load Delivery||Two Hours||$150||$150.00|
Truck A could load its pickup in under two hours in this example. Then Truck A got its delivery unloaded in under two hours as well. Since Truck A was on time in all respects, it accrued no additional fees.
However, in the case of Truck B, the outcome was not the same. This truck had a challenging time getting loaded. Regardless of what caused this huge delay, four additional hours were spent loading the freight. The offloading of the cargo was completed much faster. However, the damage was done at seven hundred and fifty extra dollars in detention charges.
Some of the biggest challenges shippers face today can be seen in many ways. Many scenarios can complicate the effectiveness of a shipment.
In trucking, one of the biggest hurdles is the lack of understanding behind what these charges are and how they’re calculated? Therefore, it’s essential to take great care and sometimes think outside the box to analyze and evaluate all situations when considering the shipment of a domestic load.
Often a detention fee resulting from this occurrence is seen as a penalty. When in fact, it is put into place to compensate the driver or carrier, preventing them from simply pulling away from the loading or unloading site.
“Nobody wants to charge these fees, and they don’t generate much revenue for the driver or carrier. These fees only slightly mitigate any lost expense for the driver or carrier. It’s about efficiency, and more efficient shippers will spend less,” said Morphy
The most desired situation is one in which the driver gets in and out of their pick up or drop off within the allotted free time. When the truck can get in and out of the load or unloading scenario, that increases the capacity of the shipper.
The general idea of how a detention fee can occur for imports and exports remains the same. In the case of imported freight, a driver must wait for a container to be unloaded before returning it to the port. In exported freight, drivers must wait until a container is loaded before dropping it off at the terminal.
The International Federation of Freight Forwarders Association (FIATA) has created a detailed analysis regarding detention and demurrage charges. The carriers ultimately decide how, why, and how much a detention fee will originate and cost. Other accessorial fees can mount during shipping, and it is imperative to carefully monitor and utilize trusted third-party logistics (3PL) when shipping.
Examples of how detention charges occur in imports and exports are outlined below:
The shipper assumes responsibility for both the arrival time and the available road hours a driver has, including verifying the weight of goods inside the container.
Suppose this data is not provided or is inaccurate due to a breakdown in communication that will result in detention. It’s imperative that compliance with the driver's time and any verified documentation due at the time of export is recognized and submitted to avoid an accessorial fee.
After the last free day has expired at an ocean port, a daily storage fee known as demurrage is added. If the equipment fails to return, this fee can also apply to a chassis.
Luckily, there are options to get your cargo out of the port and stored elsewhere until suitable trucking can be arranged to ship your load. There are several strategies to avoid demurrage charges as they can and will add up.
A trusted intermodal drayage carrier can offer drayage services to negate any demurrage fees. Also, a carrier will help avoid any potential detention charges that might follow with proper management and communication with the shipper.
The best way to avoid any additional charges is careful planning and execution, especially regarding detention. The shipper and receiver must prepare and set the correct expectation.
When moving freight, you need to understand what the shipper needs, including shipment details. Some things to consider to ensure a smooth transaction are:
Ultimately, the best preventive measure a shipper can take is open communication with the driver or carrier and to prepare their load for the truck's arrival. The use of modern technology can help minimize the risk of detention or any other accessorial charge.
A trusted 3PL can mitigate several additional costs when shipping primarily due to its ability to navigate any issues that may arise from shipping freight. They are also equipped with the latest tools and staffing options available.
However, just like the saying goes, “It takes two to tango,” shippers and receivers also need to maintain efficiency and make loading and unloading a top priority. Detention fees are not personal; it's business.
R+L Global Logistics provides many options to ensure that any unnecessary charges are avoided at all costs. One of our missions is to provide customers with the latest tools with the most significant level of transparency offered in the industry.
Various advantages like the trucker tools app and our freight management program yield fantastic results for the customer, offering better overall visibility into their logistics program. R+L provides essential strategic recommendations based on a company’s supply chain.
In a world where supply and demand travel on the same path, you can’t afford to waste time and get hit by unexpected fees. It would be best to have a trusted partner to move your freight with unparalleled speed and accuracy.
R+L Global Logistics maintains a 99.5% on-time delivery rate for freight shipping. This statistic is not merely a statistic but a testament to the strong work ethic and business acumen that only we can offer. Our solutions and experience will keep your freight moving without the fear of unnecessary charges like detention fees.
R+L Global Logistics offers freight services for the following, including many more:
While there are many companies to choose from, the only one that can deliver unmatched service and reliability is R+L Global Logistics. Having R+L Global Logistics as a strategic partner for your business is a worthwhile decision. We ensure the strength and reliability of your shipping needs. Call us at (866) 353-7178 or get a freight shipping quote today.