Detention Pay & Fees in Trucking
Time and schedule management are among the most critical aspects of freight transport. Every party involved in the supply chain (shippers, brokers, and carriers) works hard to keep things moving and maintain an efficient workflow so cargo arrives at its destination promptly and safely.
However, the freight industry is highly susceptible to technical issues, unforeseen circumstances, and personnel shortages, among other complexities that can result in unnecessary downtime and delays.
In many cases, delays are inevitable and may lead to detention, a universally disliked part of the freight industry as it can incur additional costs to all parties.
Generally, delays do not immediately lead to detention unless it exceeds the agreed-upon loading (at the pickup location) and unloading (at the delivery location) time, which is typically 2 hours.
In this post, we’ll dive deeper into what detention pay and fees are, their cost impacts, and the reasons for their occurrence. We’ll also explain why you should avoid detention and some of the best practices to do so.
What Is Detention Pay & Fee?
Generally, shippers and brokers inform carriers when their freight is ready to be picked up and delivered. The carrier will then send the vehicle with the required equipment and resources to load and unload cargo before initiating the transit.
Unfortunately, this process isn’t always as smooth as one would expect. In many cases, trucks arrive at the designated location but are forced to wait for the shipper or receiver to load or unload the cargo, due to a variety of reasons.
Often resource, space, and dock availability constraints may delay the loading or unloading of inbound and outbound cargo. The standard industry-wide detention-free period is two hours.
If the loading or unloading is not completed within the agreed wait time, typically exceeding two hours, but within the same day, carriers and shippers have to incur two types of additional costs – Detention Pay and Detention Fees respectively. We’ll elaborate on both costs below.
Note: If the delay exceeds 24 hours, it’s considered a layover which carries a separate fee altogether.
Detention pay is an hourly rate remitted to truck drivers that arrive at a location and end up waiting for cargo to be loaded or unloaded beyond the free hours stipulated by the carrier.
Drivers get the bulk of their income from moving cargo instead of waiting at pickup and delivery points. Hence, any time lost during these periods needs to be compensated, especially since drivers are regulated to comply with strict time limitations.
In other words, they can’t work overtime to make up for the income lost. Therefore, the purpose of detention pay is to alleviate some of the driver’s losses for not being able to haul loads during detention.
A detention fee, in contrast to detention pay, is the amount carriers charge shippers for every hour taken on top of the allotment time for loading and/or unloading cargo.
Carriers usually pay a percentage of this amount to drivers as detention pay to offset their income losses and use the rest to compensate for any operational losses, additional truck expenses, or administrative tasks, such as rescheduling, rerouting, warehousing, and more.
How Much Is Detention Pay for Truckers?
There’s no universal detention pay rate in the trucking industry. It varies from carrier to carrier and depends on a multitude of complex factors, such as policies, the scale of operations, type of truckload (FTL/LTL), cargo type, road conditions, state, and more.
Moreover, some trucking companies may not even offer detention pay at all. Therefore, drivers should always check their company’s compensation structure and policies beforehand.
A 2021 survey conducted by Owner-Operator Independent Drivers Association (OOIDA) showed that the average pay for truck drivers in the United States is around $46 per hour.
Here’s a more detailed breakdown of average detention pay:
- Owner-Operators (under own authority): $47 per hour
- Owner-Operators (leased-on): $50 per hour
- Company Drivers: $28 per hour
However, some companies pay lower or higher amounts. Overall, the pay ranges from $20 to $50 per hour. In contrast, the amount drivers get paid for hauling cargo is around $70 per hour, which is well above the average detention pay – something to consider.
How Much Are Detention Fees on Average?
Every minute of detention matters to carriers, as running behind schedules can disrupt the entire supply chain, ultimately leading to delays in stocking, fulfillment, and delivery.
As a result, carriers use the detention fees to cover the lost value of the detention time. With so much at stake, it’s no surprise that detention fees are costly and can exceed $100 per hour.
However, depending on the company and its relationship with its shippers, the fee can be discounted or waived. Moreover, some companies don’t even charge detention fees as part of their value proposition.
According to OOIDA’s survey, the average amount charged by carriers is $85 per hour which is more than enough to cover a truck driver’s detention pay.
However, depending on the delays and logistical issues caused by the detention, this amount may not fully compensate for the direct and indirect losses to the driver and the carrier. The survey also showed that drivers compensated per mile lose around $101.25 per hour of waiting.
What Causes Detention to Occur?
In most cases, detention is caused by shippers or brokers. However, there are relatively less frequent cases in which a carrier is at fault. We have highlighted below some of the most common causes of detention in the freight industry:
- Personnel Shortage – Loading and unloading can be a hectic and time-consuming process, especially when shippers need to move large quantities of cargo to warehouses. Both processes require adequate resources. The higher the numbers, the quicker the loading and unloading times. Unfortunately, labor shortages are among the most common causes of detention. Many shippers and receivers have insufficient on-ground personnel to load and unload cargo. Hence, they often take more time than usual, leading to delays.
- Miscommunication – Due to the complex dynamics at play, the chances of miscommunication are extremely high at every touch point of the transit and from every party involved (shipper, broker, and carrier). For instance, a driver may arrive at a pickup location to find that the cargo isn’t ready to be loaded. Miscommunications can also occur due to a lack of clarity about who is supposed to report to drivers when the containers are empty and ready to be returned. Both these situations are among the most recurring causes of detention in the industry.
- Layovers – Many trucking companies that have driver layovers often deal with scheduling complications that lead to a ripple effect and affect their entire supply chain. As a result, shippers may not have the resources or machinery to load or unload cargo when they arrive after a shift in schedule.
- Customs & Documentation – Another major cause of detention is delayed customs clearance issues or incorrect information. As a result, many drivers often have to wait at a port for hours before they initiate the hauling process. This waiting period typically incurs detention fees and pay as carriers and drivers are forced to trade off other shipments that could have been made during the wasted hours.
- Production Issue – Finally, many shippers, especially manufacturing companies with regular freight shipments, hold their cargo due to quality issues following production. As a result, they force truckers to wait for hours or even more before loading their cargo into the vehicles. In some cases, they may even have to short-ship cargo.
Why You Should Avoid Detention
Detention is a concerning aspect of the trucking industry as it can affect every party involved in the value chain. Shippers, carriers, and brokers all try to avoid detention as it leads to unnecessary costs, productivity losses, higher operating costs, and other issues.
For carriers, it takes away the opportunity for their drivers to do more trips and generate more profit or income. In the long term, detention affects the relationship between carriers and shippers due to the disruption in the overall workflow.
Carriers want to maintain positive relationships with shippers and brokers. However, this becomes difficult when they have to deal with frequent overtime, tight scheduling, and deadline extensions.
However, detention remains an obstinate problem in the trucking industry and there’s no way to eliminate it entirely. The only thing that can be done is to limit its occurrence to minimize detention fees and pay as well as the underlying disruptions it causes.
Best Practices to Minimize Detention
Fortunately, there are workarounds you can use to circumvent detention; most of them are well within reach for every party involved. Below are some of the best practices to minimize detention.
Complete Your Groundwork Pre-Emptively
Since documentation and payment are among the most common causes of delays, the best way for shippers and brokers to prevent detention is to proactively prepare custom clearance documents and pay the related duties before their shipment arrives.
Doing so will minimize the wait, loading, and unloading time and save hundreds if not thousands of dollars in detention fees over the long term.
Reconfirm Pick-Up & Delivery Details
Since miscommunication happens all the time, one good practice for carriers to avoid detention simply entails reconfirming pick-up and delivery detail. It’s also important to alert shippers timely so that they can prepare for loading or unloading well in advance.
This will prompt shippers to organize the required personnel and equipment to ensure timely cargo loading and unloading. Moreover, reconfirmation would notify carriers in advance regarding any changes in plans from the shipper’s or broker’s end so they can adjust their workflow proactively.
Plan Your Scheduling Early
Shippers can plan their production, packing, and quality assurance processes ahead of time to account for buffer. Doing so will ensure that their cargo is ready in time for loading.
Similarly, carriers can plan their scheduling early to account for any uncertain issues and prepare for them proactively. Early scheduling may seem like a simple practice, however, it can make a huge difference to freight management and minimize detention.
Avoid Cutting Corners
Cutting corners is a practice commonly employed by truckers to expedite shipping times when they’re behind the clock. This practice often leads to accidents and breakdowns – both incidents that cost more in the long run.
Similarly, shippers often strive to achieve a balance of productivity and cost, and would often skimp on additional resources to maintain a consistent workflow. This would ultimately cause delays during peak periods.
Fortunately, there are many strategies carriers and shippers can employ to avoid cutting corners. The simplest one is to outsource shipments when a truck requires maintenance and source for contract-based manpower during busy seasons respectively.
Track All Movements
Tracking has become one of the most essential activities in the freight industry. State-of-the-art technologies such as electronic logging devices enable carriers to monitor cargo movement periodically or around the clock.
Apart from enhanced visibility and security, tracking enables carriers to adjust their schedules and make other important operational and strategic decisions to avoid detention.
Moreover, well-documented tracking by carriers would be undisputable evidence during any occurrence of detention, keeping shippers and brokers vigilant at all times.
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.