A3 Freight Payment Blog


Shippers are being sent “to detention” by Hours of Service rules

Over the last year, as the new Hours Of Service (HOS) rules have been implemented, more shippers are seeing their freight spend increase and exceed their budgets in a new way.

Shippers of truckload freight are accustomed to transportation rate increases and, of course, fuel surcharges. But, now, a sleepy accessorial charge is wreaking havoc with transportation budgets. Detention charges and related layover charges are increasing at an alarming rate as the impact of the HOS rules are felt.

Shippers are hungry for benchmarking data as pricing on this accessorial service shifts. Transplace recently published the Transplace Accessorial Benchmark Study. Reporting on the results of the study, Supply and Demand Chain Executive (Bosecker & Hudspeth, 2012) noted that:

·         In the case of detention with power, 80 percent of carriers allowed for 2 hours of free detention.

·         Only 7 percent of carriers allow less than two hours.

·         The typical charge for detention with power is $50-$60 with time.

·         Most carriers billed in increments of 15 minutes while a significant minority bill in increments of no less than a full hour.

Detention delays may also force layovers charges that range from $100 to $250.

Shippers should use their freight payment data to monitor any increase in these charges and formulate a strategy to mitigate these fees by negotiating increased hours of free detention and reduced layover charges with their truckload carriers. 

Otherwise, they could receive some “punishment” of their own when monthly financial statemetns are produced and freight expense dramatically exceeds budget.

Reference:

Bosecker, C., & Hudspeth, B. (2012, February 2). FEBRUARY ONLINE EXCLUSIVE: The Case For Multi-Dimension Freight Benchmarking. Retrieved July 13, 2012, from Supply and Demand Chain Executive: http://www.sdcexec.com/article/10622746/february-online-exclusive-the-case-for-multi-dimension-freight-benchmarking

Posted by Ross Harris at 5:22 PM
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