The basic key to trucking is that if your wheels aren’t turning then you aren’t making any money. Many drivers are paid by the mile and when they are sitting waiting in line they are more affected by detention time than some owner-operators. No matter which category you might fall into when you are waiting over an allotted time period, not only are you not making money but there is also a chance it can cost you the next load and now you are actually losing money. Knowing the ins and outs of detention time and how to negotiate it into your freight rates can save you time, money, and peace of mind.
If you ever received detention in school then you have an idea of what the word means. The only difference is that this isn’t one you earned from making poor choices, in fact, the majority of the time it is because your shipper has not put the proper procedures or staffing in place to get you loaded or unloaded in a timely manner. The average rate it takes to unload or load an LTL load is 2 hours. Any amount of time past that time frame that you are waiting is known as detention time. ELDs do make this easier to track when it comes to invoicing a shipper for time wasted but they also end up costing the driver because it counts towards the daily hours of service.
If you have a shipper that continually has you or your drivers waiting for excessive amounts of detention time you may want to consider not continuing to haul for them. Even if they do pay the detention time when applicable they could be costing you more in the long run by having your driver consistently waiting. This will also factor into how you schedule loads because you are having to allow more time than you should between one load and the next.
The detention rate issue typically affects the drivers and carriers in larger ways than it costs the shippers as the trucking industry has no set standard on what carriers can charge, and there will always be someone who is willing to haul a load for less. However, hauling a load for less than what you can make off of it is not a sustainable way to make it in the trucking industry. There is a difference between a good-paying load and just a load and the longer you are in the industry the better you will understand why it's important to haul the good-paying ones.
If you are an owner operator or a freight broker it is important that you understand how to determine what to charge shippers for detention time to protect yourself and your drivers from lost wages while they are stuck sitting. You first must determine what the tractor profits per hour after your constant expenses of fuel, maintenance, and driver’s salary. You then take that figure and divide it by the hours in a day. A good average is around $75/hour. This is a basic rate you can go by, but if you or your drivers are spending an excessive amount of detention time at certain shippers then you need to negotiate more when determining the freight rate with the shipper.
It's also important that you consistently update your detention time rates. When fuel, maintenance, driver’s wages, and other factors increase it will be important to increase your detention rate. This will be something you will need to negotiate with shippers (even ones that you use consistently) as rates change.
If you are using a freight broker to book your loads the detention rate is typically already factored in. This could be very helpful, especially when you are first getting started in the trucking industry. Oftentimes they have been in the business for a long period of time and understand the best ways to get you paid for any detention time at the shipper. They may also help steer you away from shippers who are known for long wait lines or inefficient loading/unloading stations.
Documentation, Documentation, Documentation.
If you don’t keep good paperwork it can end up really biting you when you try to charge a shipper for your detention time. There are a few different routes you can take to record your detention time. Many of the ELD companies have built-in features with their software that help your drivers track any detention time. This gives exact check-in and check-out times and leaves no room for error. Having this documentation is absolutely vital as many shippers don’t pay you the day of the delivery and you want to put yourself in the best position possible for when they try to get out of it later.
You can also use a program such as Truckbase that can help set you up with ways to keep your documentation accurate and ready to send out when it comes time to receive payment from the shipper.
After you have your documentation together you can send over an invoice to the shipper for the load and any documented detention time. The detention rate will have already been agreed upon with you and the shipper in the contract, now it’s just time to take all of your data and send it over so that you can receive payment. If the shipper tries to get out of paying the detention time be sure you refer back to where it was negotiated and provide detailed documents of the hours you or your driver was there past the average 2 hour time frame.
Finding shippers that are willing to have open and clear communication at all points of the load (from planning it out to closing it up) will make your job so much easier. This will be a trial and error system until you learn which shippers are the most efficient and the best to work with.
Truckbase was built with owner operators in mind, by people who've been in the trucking business for years. We can help you build your trucking business by reducing your office time which enables you to spend more time on the road. Check out our demo today!
