Best way for the industry and/or govt. to tackle detention?
As indicated in summer-conducted polling above, most readers favor industry-based solutions to the problem of uncompensated waits at shipper/receiver docks to government-based solutions, as has been advocated by the Obama administration’s DOT and as I wrote in the lead story in the “Detention détente” multipart feature’s lead story last week. The measure in the administration’s Grow America Act highway-bill draft (as yet unsuccessful) would not only require at least a minimum wage to be paid by carriers to employee drivers for detention but any time, more or less, spent on-duty, not driving.
With the detention series wrapping up today, find some reactions below, the first, most-lengthy one from the Florida-based “Red Light Bandit,” an owner-operator with decades of experience. He wrote in with the following comment on detention issues, including driver pay for lost time, rates charged by carriers, including owner-operators with authority, and more. While the largest share of readers favored an income-based approach to setting hourly detention rates with customers, Bandit favored more aggressive tactics, as do others, in this day and age. And as other readers noted, responding to the income-based hypothetical benchmarking calculations I made in this story toward providing an example of an industry average hourly rate for an independent, such an approach doesn’t adequately compensate in situations where long waits cause a complete reconfiguration of the weekly schedule, causing missed appointments/loads down the line. Find more discussion of that at bottom.
You are right on the money in respect to detention time. In the world of accounting and credit/debt, an item which is sitting idle that otherwise could have been generating some form of income is called “potential revenue lost” or something to that effect.
What the smart people in the trucking industry have been doing all these decades is taking advantage of the less intelligent people. It is stealing — but if the people go along with it, it has some form of legal term: mutual agreement, or something like that. I am not in the legal profession.
Drivers sitting being held up for whatever reason are losing money because the wheels are not turning — unless they happen to fall into that very small category of paid hourly LTL company drivers.
I see it this way: The max potential earned income is a truck going down the interstate at the maximum legal speed, 60-65-70-75 mph. Take the typical income for a company driver ($0.30-$0.50 cents per mile) or revenue for an owner-operator and then take the detention time (1, 2, 3, 4 hours, whatever it may be) and multiply it by that. That is the lost potential revenue of that driver or owner-operator.
If an owner-operator gets $2/mile for hauling loads and is held back at the shipper or receiver for 2 hours, that owner-operator has a lost potential revenue of 2 hours of driving at max highway speeds of, say, 70 mph, or 140 miles at $2 per mile.
That is $280 the owner-operator could have been generating.
What is the typical detention pay (if any at all) — $8-$10/hour?
You can see it is a situation of the smart taking full advantage of the less so. It is an ongoing practice that has embedded in the trucking industry for at least 50 years. Many older drivers can tell you of no detention pay — lost money just sitting there acting as portable storage containers for a company, being used and taken advantage of.
Like most other things in the trucking industry, things change very slowly, if at all. Owner-operators are fighting each other over loads — and shippers know this, hence the insulting low rates near poverty level. Owner-operators who are not aware of their actual cost per mile take loads that pay less than their operating costs, and end up delivering not for free, but out of their pockets. Those types do not last long in the business, but are usually replaced by young, eager owner-operators trying to get a foot established in the industry. They end up getting used and abused, ground up in the meat grinder and spit out as well.
It takes a seasoned owner-operator, who is a professional businessman along with being a professional motor vehicle operator, to make it in this cutthroat industry.
Knowing their costs and expenses is key, refusing loads that pay less than profitable percentages is key, and knowing not to be used and taken advantage of as temporary storage facilities at the docks is another.
Remember, that truck could have been unloaded in 15 minutes (I have unloaded a 53-footer with a helper using electric pallet jacks in 15 minutes personally), papers shuffled and that truck back on the road ASAP.
Time is money. Lost time is potential earned income lost. The key is to get smart.
It’s time for owner-operators to stand up for their businesses. Demand, don’t ask for, detention money to be put into the lease agreement. If the owner-operator has their own authority — make sure that the customers know about this. Brokers will try to sidestep and evade this topic as much as humanly possible — or try to pocket that money for themselves. –“Red Light Bandit,” Florida Expedited Delivery
Other voices in response to the “Detention détente” feature
“Bill”: Although I’m not in favor of ELDs, I’ve been saying all along that they will assist us in growing a pair. The time will come when $100 an hour detention pay will be mandatory. If not, then get another truck — should be our answer to brokers who won’t pay. This year I have flat-out left shippers and have threatened receivers to put their loads in storage. We simply can’t put up with the laziness of others that costs us revenue. Lost revenue means more time on the road and less at home with our families. Say no to cheap freight and no to excessive dock time. Things will change.
Kenneth Williams: It’s not the lack of pay for detention time that angers me [as much as] it is not getting miles by blowing an hour going from a truck stop 40 miles away from a city, then waiting over 6 hours to get loaded and then only getting 5 hours drive time that day. Then you go to unload and lose another day to get your next load, and $50 is not going to cover the lost time. And now this is a normal day for us as truckers…. Now if you’re a team operation you can just switch drivers and make up the lost miles, but if your a single owner-operator. This means we make less money or stop hauling out of certain docks.
Thomas Lawson: Until shippers and receivers are held accountable and we receive a rate that is the same as we would get if we were driving down the road, these practices will continue. Because the carriers and brokers think they deserve a cut of the money that the owner-operator or driver should get. I once was told by a dock foreman that unloaders should be paid, and I agreed that the receivers should hire them since it’s their freight that’s being unloaded. If you buy something at the store do they supply someone to put it in the car and unload it when you get home? Same principle, isn’t it?
“18 wheel Freeway Princess”: I find it odd that more than a few shippers/receivers will charge a “late fee” if you are not on time/early for your appointment (some as few as five minutes, some one hour … and everything in-between). One shipper that my company services charges $250 if more than 15 min. late and without a phone call 12 hours prior. I wonder if I could charge them $250 if they are more than 15 min late loading me without a 12-hr-prior notice!
Detention pay has, as a generalization, gotten better since I first started in ’91. Always make sure on the Rate Con (appropriate name, “con”) that you are satisfied with the detention pay. I had one broker not include any detention clause, so I penciled a simple contract: Detention is started at 2 hours, paid in 15 minute blocks rounded up. Rate is $75 per hour for the first 4 hours. If load/unload is not complete by the fourth hour, subsequent detention pay is $3.50 per minute. Carrier reserves the right to void this entire contract if detention reaches the fourth hour; however, payment shall still be due from broker for accrued detention.
Via Overdrive‘s Facebook page, respective to rates:
Chuck Guintard: Here’s the problem for all you freight haulers. If it’s $65 (hourly), J.B. Kuntz will charge $59, Wenner will charge $45. It’s a race to the bottom. Everyone thinks they can do it cheaper, and end up working for free.
Dean M Habhab: Detention should be what you make if driving down the road. $100-plus.
Donna-John Poole: $75 to $100 per hour after two is fair.
David W. Elwin: How can you calculate fair when someone takes six hours to unload, then you miss your reload and have to sit for a day looking for another load. $64 an hour, no! Try $500 an hour and that would guarantee you’re out the door promptly.