Hello, everyone. Today, we’re going to discuss what detention is and how you, as an independent truck dispatcher, might be dealing with it.
Detention is a massive issue for the trucking industry. But before we dive deeper, let’s define what detention is. Detention is compensation to a motor carrier, paid for detaining or delaying their trucks at shippers or receivers beyond a reasonable time. In simpler terms, if your client’s truck has been sitting at the shipper or receiver longer than what’s considered reasonable, then your client is eligible for some sort of compensation, technically.
So, first off, what is this “reasonable time”? Well, the industry standard is 2 hours for loading and 2 hours for unloading. If it takes longer than 2 hours to load a truck, you could technically request detention. Similarly, if it takes longer than two hours to unload your client’s truck, you could technically request detention. So you might wonder, why do I keep using the word “technically”?
Well, while your client should receive detention if their truck is detained, it doesn’t always happen. First of all, detention is governed by the broker-carrier agreement, an agreement signed between a freight broker and a motor carrier. If you read through this agreement, you might find terms outlining when and how much your client will be compensated.
Some brokers have their terms clearly outlined. They’ll state, “If a truck is delayed for more than two hours at loading or unloading, we will pay $35 an hour.” So now you know what to expect. If your client’s truck is delayed, you simply notify the broker, who should, based on the agreement, pay out detention to your client.
However, as you read through the terms and conditions in the broker-carrier agreement or a rate confirmation, you might find that some brokers will only pay detention after four hours of a truck being detained. Or, on some loads, they may clearly state that they won’t pay detention, period, no matter what.
Unfortunately, in such cases, you can’t demand any compensation because you’ve agreed to their terms. So, if you want to know if your client will be compensated and how much, you need to read through the terms and conditions, either in the broker-carrier agreement or on the load rate confirmation.
Alternatively, you could ask a broker at the time of booking a load, “Mr. or Mrs. Broker, will you be paying detention on this load, and at what rate?” Speaking of rates, at the time of me making this video, rates for detention range from $25 to $50 an hour. And while $50 an hour may sound like a great rate for sitting and doing nothing, it’s still a huge problem for the trucking industry and for you and your client in particular.
Let me provide you with an example to prove my point. Imagine your client’s truck arrives for a delivery at 10 a.m. Your client waits two hours to get unloaded. It’s already noon, and nothing has happened yet. You reach out to the broker, inform them of the situation, and the broker tells you not to worry.
They will pay detention after two hours, and, as a matter of fact, they’ll pay it at $50 an hour. Now, your client’s truck is further delayed for another four hours before it’s finally unloaded. Your client will then receive a new rate confirmation with an extra $200 added. So, everything seems pretty great, right?
However, let’s look at this from a different angle. Your client has lost six hours out of their workday. They arrived at 10 a.m., waited two hours until noon only to find out they’re not being unloaded. Then it took another four hours to empty the truck.
It’s 4 p.m. now. More than likely, the next load you booked for them has already been canceled because your truck wasn’t empty and couldn’t pick it up. So you have to find another load. And since it’s already pretty late in the afternoon, you may or may not find a suitable load. If you don’t, your client has lost an entire day of work.
Even if you do find one, your client will be limited in the number of hours they can still drive to deliver this load. So now, instead of generating, let’s say, $1,500 in revenue, your client has earned a measly $200. And that’s definitely not a good scenario for them. That’s why detention is a huge problem; it affects your client’s productivity and costs them a lot of money.
Another significant issue with detention is that you’re not always going to be able to collect it. Freight brokers will do whatever they can to avoid paying your clients. Now, there are a couple of things you can do to increase your chances of getting detention. First, talk to the freight broker in advance.
Ask them if they’ll pay detention and at what rate. This sets the expectation from you that you’ll be demanding some sort of compensation if your client’s truck is detained. So the broker will probably act accordingly. Second, keep track of time and communicate properly.
As the two-hour mark approaches and your client’s truck isn’t loaded or unloaded, you’ll want to call the broker. Notify them via email too, saying the truck isn’t being unloaded and it’s been two hours. You’ll expect to get detention for every hour after that. This happened to us when a client called five hours later, saying, “Oh, well, I just got unloaded.”
Can we get some sort of detention? Sure, we’ll try, but it would’ve been better if you’d told us at the two-hour mark. That way, we can notify the broker and say, “Mr. Broker, it’s going to cost you money for our truck sitting there.” Usually, the freight broker calls the shipper or receiver and says, “Hey, this is going to cost money; we need to get this truck moving.”
This can sometimes speed up the process. But without proper communication, none of that will happen. So please, tell your clients or their drivers that as soon as they realize they’re not being loaded or unloaded on time, they need to let you know. Another thing to do is ask your client or their driver to note their in-and-out times on the bills of lading.
For example, if they arrive at the facility at 10 a.m., it should be noted. If they leave at 4 p.m., they should ask the receiver or shipper to write 4 p.m. and preferably sign next to it. This clarifies the arrival and departure times on the freight documents, giving you a framework for requesting compensation. Also, if your client is late for their pickup or delivery appointment, they likely won’t be compensated for delays. They’ll be blamed for not arriving on time and thus not being loaded or unloaded on time.
Even though you can still ask for detention in such situations, you should explain to your client that they didn’t arrive on time, and the broker likely won’t compensate them. Now, let’s revisit our initial example of a truck arriving at 10 a.m. and leaving at 4 p.m. Assume you notified the broker at noon that your truck was delayed. The broker said they’d pay $50 an hour. So, by 4 p.m., you’re owed $200 in detention pay.
At this point, reach out to the freight broker and say, “Mr. or Mrs. Broker, our truck just got empty. We’d like to request four hours of detention. Could you please resend us a rate confirmation with the detention noted?” The broker should issue a new rate confirmation, adding $200 to the previously agreed rate. If you’re dealing with a reputable broker, they’ll probably send this right away, and your client can proceed with billing the load and receiving the extra $200.
However, if you’re dealing with a less reliable broker, they might come up with all sorts of excuses, from needing client approval to who knows what. In such scenarios, stay on the broker. If they don’t send a rate confirmation right away, call them in an hour, two hours, the next morning, and the next afternoon. Make sure they understand you won’t let this issue go.
Some brokers actually hope you’ll forget about it, allowing your client to bill the load without added compensation, saving them a few hundred dollars. If possible, advise your client to wait and not bill the load. Stay on this particular broker as long as you can.
By now, I hope you have a better understanding of what detention is and how you might deal with it. If you have any other questions, please post them in the comments, and we’ll try to answer them for you. With that said, we’re wrapping up this video, and I’ll see you next time.
Copyright by Roman Shmundyak October 2023
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