When a customer has engaged a trucking company for delivery or pickup and a date is finalized, the trucker will proceed with the planning process. However, not everything may go to plan and the customer may decide to cancel the arrangement or not be available when the truck arrives.
This is where a Truck Ordered Not Used (TONU) Charge comes into play. A TONU is a fee that is charged by the trucking company to the customer for cancelling an already firm and agreed delivery or pickup arrangement, or for not being available upon the arrival of the truck.
In this article, we’ll go through the concept of Truck Ordered Not Used charges, why they are charged, what the typical TONU fee is and how these fees are paid. We will also discuss a case study for better understanding.
Why Is a Truck Ordered Not Used Charged for Cancellations?
In the business of road transport, it’s all about getting the most out of each truck by optimizing the number of trips through advanced planning. The number of trips per truck is generally a good indicator to determine if a trucking business is well optimized.
A truck should pick up and deliver cargo efficiently and be compensated for an agreed service fee. In short, trucks need to move consistently almost without idle time.
It gets challenging when a firm date has been agreed on between the trucker and the customer, the trucks are prepared, a delivery or pickup route has been created and the arrangement is suddenly cancelled.
Therefore, a Truck Ordered Not Used fee is charged to the customer, as the trucker has most likely already planned the route and readied the trucks, which are otherwise lost time and resources.
In summary, a TONU charge can occur when:
- The trucking arrangements are cancelled too close to the agreed date
- The trucking arrangements are cancelled after confirmation
- The truck arrives at the agreed location but the customer is unavailable
- The wrong equipment or truck was requested
How Much Is the Truck Ordered Not Used Fee?
TONU is charged at about $150.00 for a dry van, prime mover or box truck. For reefer shipments or special equipment containers, the charge can go up to about $300.00.
These charges can differ for each transportation company, but are generally around $150 to $300. A Truck Ordered Not Used fee is usually charged to a customer within four (4) hours of the intended pickup schedule or upon the cancellation of arrangements.
It’s best to check the terms and conditions of your preferred trucker and understand when they apply, what the fee is and how they are charged.
How is the Truck Ordered Not Used Charge Paid?
The trucker can justify this charge by showing the time the booking was made, the confirmation of the scheduled trip, the arrival at the requested location and the confirmation or cancellation or the arrangement from the customer.
In the event of a TONU charge, the trucking company will generate an invoice to the customer or the freight forwarder based on the nature of the trucking arrangements. Unfortunately, it can become a challenge if a freight forwarder is in play. The truck may opt to charge the freight forwarder directly, instead.
Generally the party that booked the service or that entered into a service agreement with the trucking company will be liable to pay under their terms and conditions that were laid out.
It’s also common practice for the freight forwarder to pass these charges through to the customer in the event of a customer changing or cancelling the delivery/pickup dates or not being available at the time of arrival.
How to Avoid TONU Charges?
There are several things that can be considered, in order to avoid being charged a Truck Ordered Not Used Fee.
- Planning – plan pickup and delivery dates well in advance and ensure that all stakeholders are informed accordingly. This can greatly minimize the risk of having to cancel or amend trucking arrangements.
- Communication – communicate transparently with the trucking provider on possible date changes, space constraints or anything else that could cause an amendment or cancellation. Keeping them well informed helps them plan their routes better.
- Information – ensure that the trucking company has clear TONU policies to avoid possible conflicts about rates, payments, timelines and conditions in the future.
The key is to have a structured planning process when it comes to arranging deliveries and pickups with your trucking provider or freight forwarder. The more transparent and proactive the planning and communication is, the better the working relationship with the transporter.
Example of a Truck Ordered Not Used (TONU) Scenario
Let’s say an exporter of electronics has requested a truck pickup at a certain time and date. The truck is requested to be positioned at 10:00am at loading gate A. The trucking company has confirmed that it can service the requirement and internally makes its operations plan for the following day.
In the terms and conditions, it is mentioned that confirmed arrangements must be cancelled 24 hours before pickup or delivery. Failure to comply may result in a TONU charge.
On the day of pickup, the shipper cancels the trip citing a production problem has happened and the pickup has to be rescheduled to a different date. The trucker who has already prepared the truck and driver can rightfully charge a Truck Ordered Not Used fee as per their terms and conditions.
Another example is if there was an initial request for the trucker to deliver a 20′ shipping container, only to be changed at the last minute to a 40′ shipping container. This may also result in a Truck Ordered Not Used charge, as the equipment type was changed outside of the agreed timeline.
Truck Ordered Not Used (TONU) vs Truck Detention
Oftentimes, Truck Ordered Not Used (TONU) charges are confused with truck detention charges. It’s important to note that both of these charges are not the same.
Transportation companies typically charge truck detention fees for idle time, beyond the agreed freetime. For export and import shipments, the standard free loading and unloading time is about 2 hours.
If the truck arrives on time and the customer goes beyond that, the trucker can charge truck detention based on an agreed amount, usually per hour, for the time it remained idle.
Truck Ordered Not Used charges on the other hand can be viewed as a cancellation penalty that is not within the agreed timeframe. While truck detention is charged for idle time, TONU is charged for last minute arrangement changes or cancellations.
Both Truck Ordered Not Used and truck detention charges are categorized as accessorial charges and are only billed if applicable.