In the trucking industry, time is money. Trucking companies and owner-operators constantly look for different ways to boost productivity and maximize cost efficiency. For instance, some carriers invest in the latest and most advanced technologies to streamline their operations.
While some trucking companies upgrade their fleets, others look for simpler, less expensive solutions to save time and increase their bottom lines through services like live loading, no-touch freight, and drop and hook.
Drop and hook is a method in which the trucker delivers a trailer at a location for loading or unloading and then proceeds to hook their semi to another trailer for a subsequent delivery.
In this article, we’ll talk about hook-and-drop trucking in detail, explain how it works, how it’s different from other methods, the key benefits it offers for both parties, and the risks associated with the practice.
What Is Drop and Hook?
Data from a study by the US Department of Transportation suggest that the time spent at a shipper’s or receiver’s location during a trip can impact the trucker’s productivity, schedule, and income.
Therefore, companies employ different practices to pick up and deliver cargo. Both live loading or unloading and no-touch freight are time-consuming practices and highly dependent on the shipper’s and receiver’s resources, facility, equipment, and operational efficiency.
Compared to these practices, hook-and-drop is a faster, more cost-effective alternative for carriers and shippers. Drop and hook is a popular trucking term used to describe the process of dropping a trailer at a client’s facility and hooking another trailer from the same facility on their way back.
This method is often used to deliver and pick up laden and empty shipping containers. With drop and hook trucking, carriers can utilize multiple trailers to reduce transportation costs, increase revenue, and save time for all parties involved.
Today, thousands of trucking companies in the US have adopted this method to improve productivity. Moreover, this practice also lowers fuel consumption, accessorial fee, and other trucking expenses by simply reducing the number of trips to and from a facility. It also reduces wait time during loading and unloading and minimizing dead miles through backhauls.
Drop and Hook Versus Live Loading
Live loading and unloading are also popular terms used in the trucking industry. They describe the process of moving cargo in and out of a semi-trailer while the driver waits (without the semi detaching from the trailer).
Compared to drop and hook, live loading requires more coordination to minimize or prevent disruptions that could lead to delays in procuring resources (such as labor and equipment) and unnecessary detention fees that can affect both parties.
In contrast, drop and hook offers greater flexibility to both parties since it doesn’t involve waiting for the cargo to be loaded or offloaded. In other words, truckers have a much wider window to deliver or collect cargo from the client’s location.
How Does It Work?
Drop and hook has become a popular practice in the shipping industry in recent years, especially among large shippers and consignees. Typically, carriers with a sizeable fleet of trucks and trailers use this method.
A typical drop and hook process begins with a trucker driving to a client’s location to drop off an empty or loaded trailer. They then hook up another trailer for the next delivery out of the facility. The transition usually occurs at the loading bay or parking facility, depending facility’s layout.
Carriers with larger fleets have drop yards that are located in various locations – mostly along their regular routes. They haul doubles and triples to these facilities so multiple drivers can use them for drop and hook trips in the vicinity (state or city).
Can a Small Trucking Company or Owner-Operator Perform Drop and Hook?
Drop and hook mandates the procurement of multiple trailers, semi-trucks, drivers, and other essentials. As a result, most small trucking companies and owner-operators don’t have the financial means, resources, and equipment to facilitate such a large and complex endeavor.
However, this doesn’t mean small carriers can’t be involved in these large, continuous supply chains. Many larger carriers partner with owner-operators and smaller companies through sub-hauler agreements to meet their load requirements.
These carriers typically leverage digital freight matching platforms to find available truckers on their routes and prompt them to use their trailers and trucks for hook-and-drop operations.
However, this isn’t the only way smaller trucking companies can practice drop and hook. In the next section, we’ll outline the essential considerations for any carrier or owner-operator to reap the benefits of this cost-effective pickup and delivery method.
Drop and Hook Considerations
Below are the key aspects truckers should consider when accepting or offering drop and hook arrangements:
Every trucking company needs to consider whether they have sufficient equipment (trailers and semis) for the job arrangements. Failure to meet these requirements can lead to several financial and legal repercussions.
Shippers that opt for drop and hook usually have large supply chains. Any disruptions or delays affect your income, reputation, and future projects. Moreover, many clients with large chains often engage multiple service providers, to ensure undisrupted operations.
Therefore, truckers must be more vigilant when it comes to keeping an eye on their trailers to prevent any misarrangements.
Shippers have various freight volumes. Therefore, carriers should be proactive and plan their schedules according to when shippers can load or unload a trailer for their next drop and hook trip.
To improve productivity and cost-effectiveness, you may look to prioritize shippers with large volumes and more frequent loads according to your equipment capacity. The last thing you want is to have your trailer left at a client facility for weeks or months while waiting for the next shipment.
This practice will incur demurrage fees on the receiver’s part on top of any agreed trailer detention fees. In such cases, it could cause a shortage of equipment to haul another client’s cargo and carriers may opt to bobtail one leg of the trip to retrieve the trailer.
Trailers left within a shipper’s premises for long periods can also pose security risks. For instance, when left under little supervision, they’re highly susceptible to damage caused by improper cargo handling, accidents, and even acts of vandalism.
Moreover, many drop yards aren’t equipped with on-site security solutions, such as alarms and CCTV cameras. Therefore, before practicing drop and hook, you should proactively resolve these security issues and adhere to HSSE standards.
You also need to sort out and establish policies related to damage responsibility to minimize disputes. This is particularly important when leaving trailer in a yard with laden shipping containers.
Available Space or Capacity
Along with multiple trailers, you should also procure sufficient space to store them until they’re needed. Depending on the circumstances, this could be days, weeks, or even months.
Therefore, you need to ensure you have a facility big enough to store most, if not all of your trailers at once. You’ll need to ensure there is sufficient room for semis to easily access the yard and hook trailers to their designated locations. All of this requires efficient space planning and optimization.
When accepting or offering drop and hook services, carefully evaluate your capacity as you are required to commit a large amount of your time, equipment, and resources to meet your client’s requirements.
Secondly, trailers left at a client’s facility can’t be used for other trips, so you may need to pick and choose your loads from other inquiries and plan your schedules accordingly.
While this may be good for creating a steady income and revenue stream, it might be difficult to move away from an agreement in the event of a dispute as it can result in a significant revenue gap.
Finally, one of the biggest factors you must consider before adopting this practice is the additional and more complex administrative work. You’ll have to manage different schedules, permits, drivers, and other logistics processes and personnel.
You’ll also have to equip your team, facility, and fleet with advanced logistics software, transportation management systems, and electronic logging devices in order to manage your fleet effectively.
Advantages of Drop and Hook
Drop and hook enables carriers and owner-operators to deliver a loaded or empty trailer to a location and pick up another loaded or empty trailer, unlocking several lucrative benefits, including but not limited to the following:
- Faster Turnaround Time – The drop and hook method offers a faster turnaround of trips by minimizing idling time since no loading or unloading of cargo is required. The only time taken is for coupling or uncoupling the trailer to or from the truck’s fifth wheel. Moreover, facilities with large available space may not require constant shunting of trailers, thus increasing driver productivity.
- Wider Delivery Schedule Allowance – With drop and hook, truckers can widen their schedules and haul more cargo within the same amount of time since they don’t need to wait for shippers or receivers to load or unload cargo. In other words, drivers simply have to drop the trailer at the designated area, such as a loading bay, and pick up the next available trailer on the way out.
- More Cost Effective – From a cost perspective, drop and hook trucking is less expensive than conventional methods. It can reduce truck idling and helps truckers save hundreds of gallons of fuel every year. It also reduces the number of trips per load whereby a single trip can haul two loads, which also benefits shippers. Furthermore, truckers can avoid disrupting their schedules and supply chains due to layovers by picking up trailers immediately after arriving at the designated location.
- Lowers Accessorial Fees – One of the biggest advantages of drop and hook trucking for carriers and shippers are reduced detention periods. Carriers can avoid making drivers wait for hours at a pickup or delivery location and circumvent the cost of compensation for not hauling cargo. Likewise, shippers can benefit from this since carriers charge a detention fee to offset some or all of the income they could have generated during the waiting period. Drop and hook minimizes the overall waiting time and ensures truckers are on their next trip within minutes following an arrival.
- Better Yard Space Efficiency – Another cost benefit carriers can enjoy by adopting drop and hook is better yard space efficiency. Since this method involves leaving trailers at the shippers’ premises, carriers don’t have to maintain huge trailer yards, saving them thousands of dollars in rent, upkeep, security, and utilities.
- Flexible Driver Allocation – Most semi-trailers used in drop and hook usually belong to the same carrier. Therefore, any driver within the company or a subcontracted company can drive their semi to the location to drop off and collect trailers according to the shipper’s requirements. As a result, carriers don’t have to prompt the same driver for a particular load, making the driver allocation and logistics operation slightly less complicated.
Risks Involved With Drop and Hook
Whether you’re an owner-operator, driver, or carrier, you’ll also need to learn about the risks associated with drop and hook in trucking, especially the costly financial penalties.
Knowing these risks can help determine if this method suits your operations. Below are some of the biggest ones:
- Shipping Line Detention Charges – As mentioned earlier, drop and hook involves the staging of trailers (often with laden or empty shipping containers) at the shipper’s or receiver’s facility for a pre-determined period. However, if the container is left for too long, it can incur unnecessary detention charges from shipping lines.
- Mismanagement of Equipment – Another risk carriers and owner-operators face is having their trailers stuck at a client’s facility during regulatory compliance checks. In many cases, this can result in penalties or even deem the particular trailer unroadworthy until the regulatory body is satisfied with the equipment.
- Implications of Economic Downturn – The drop and hook method is typically implemented in larger supply chains with continuous cargo movement. However, the biggest financial risk associated with this method is the negative effects of an economic downturn, such as a drop in shipping demand. In other words, carriers could face a drop in revenue. Moreover, they may be required to return trailers to their yards, which could force them to procure more space and facilities for storage, adding to their expenditure.
- Higher Client Expectations – Many clients, especially recurring ones or those with large orders, expect better rates and services from carriers. Due to the abundance of trucking services and immense competition in the trucking industry, most truckers don’t always have a choice but to succumb to their demands. For instance, shippers may require pickup or delivery during odd hours, disrupting their routine and other operations.
Co-Founder & Writer
About the Author
Andrew is a multi-business owner with over 10 years of experience in the fields of logistics, manufacturing, operations, training, and education.
Being the co-founder of freightcourse has given him the ability to pursue his desire of educating others on manufacturing and supply chain topics.