The anchor story in the “Detention détente” multipart feature was published September 14, 2015, at this link. The series continues below.
In 2012, a commenter posting as “Hammer Lane” here at OverdriveOnline.com offered $65 an hour as a fair rate to charge for detention as drive time tightened with hours and electronic logs. Turns out, that rate is very close to one calculated for the “Detention détente” feature using industry average benchmarks.
At once, as shown in the small fleet detention-rate examples in the multipart feature, there are different ways to skin the cat when it comes to setting rates for detention.
In recent Overdrive polling, an overall majority of readers indicated either total revenue per mile (38 percent) or profit/net income per mile + fixed cost per mile (45 percent) as appropriate benchmarks for detention rates.
The example below of a $64 hourly rate is what the latter could look like based on the average owner-operator business income and mileage numbers of independent owner-operator ATBS clients in 2014. Such one-truck independents made more than $60,000 in net income on 97,500 miles on average. Those clients’ average fixed costs (including truck and trailer payments, insurances and the like) are added in the second part of the calculation to be covered under the final rate.
Just matching profit, or net income, in detention rates doesn’t fully cover owner-operators’ costs, says Todd Amen, ATBS president; including fixed costs makes for a more accurate compensation. In addition, but not part of the calculation below, you can add your average variable hourly costs to idle or run alternative climate-control devices.