How GPS Trailer Tracking Can Help You Manage Detention Costs

What Are Detention Costs?

Detention costs are additional charges levied when assets like trucks, trailers, or maritime containers exceed a designated "free time" during loading, unloading, or return processes. These costs can vary depending on the mode of transportation and can significantly impact operations if not properly managed.

Costs for Truckload and Less-Than-Truckload Shipments

For truckload and less-than-truckload shipments, detention costs come into play when drivers spend more time than scheduled at a customer's site for loading or unloading. This is also known as demurrage or delays. In these scenarios, detention charges are usually based on a flat rate for every 15 minutes the driver is delayed above the allotted free period. These costs generally range between $15 and $100 per hour.

Costs for Maritime Shipments

In maritime shipping, detention costs arise when containers are not returned to the designated depot within the agreed-upon free period. Generally, this time is a few days after leaving the port. The free period starts when the container leaves the port, and most carriers grant a free period of between three and five days before charging detention fees. The charges are usually on a daily rate and range from $50 to $100 per day.

What is the Impact of Detention?

Detention times that extend beyond the designated "free time" have cascading effects on logistics operations. The repercussions can be significant, whether it's a trailer delayed at a dock or a maritime container not returned on time. Understanding the nuances of these impacts, especially between transportation methods, is vital for any fleet manager or shipping company.

Less-Than-Truckload Shippers

When drivers face extended detention times, their available working hours diminish, which can subsequently disrupt delivery schedules and even put them at risk of hours of service violations. This delay can lead to customer dissatisfaction, creating the potential for lost loads and affecting the earning potential of the shipping company. Additionally, the pressure of extended wait times at customer sites may make drivers feel compelled to make up for the lost time, possibly leading them to cut corners with safety checks or even drive faster than usual.

Maritime Shipping

When containers are not returned within the agreed free period, they remain out of circulation. This non-availability means they can't be utilised by another shipper, directly affecting the potential revenue that the equipment could have generated. Additionally, repeated instances of these extended detention times can strain relationships between the carriers and shippers, potentially jeopardising long-term business collaborations. Delays can also disrupt the flow of operations, introducing inefficiencies in the movement and management of other containers in the fleet.

The Purpose of Detention Charges and Why Carriers Need to Track Time

Detention costs are charged so carriers can recoup some of the losses incurred due to business disruptions. It's a means to offset operational, financial and efficiency challenges.

For carriers, having a mechanism to accurately track detention time is highly valuable. This process ensures that they're fairly compensated for the time and resources spent and provides transparency to shippers, fostering trust and smoother business relationships.

The Impact of GPS Trailer Tracking on Detention Costs

GPS tracking technology like Teletrac Navman’s TN360 platform is helping operators manage detention costs more effectively. By offering real-time visibility, carriers gain a deeper understanding of their operations, leading to fair charges and fostering transparency for shippers.

Impact For Less-Than-Truckload Shipping

In the less-than-truckload industry, geofencing technology paired with GPS tracking has emerged as a vital solution. By pinpointing when a trailer enters a customer site, carriers can precisely measure the duration a driver and trailer spend on-site. This accurate data paves the way for transparent and justifiable detention charges. When integrated with an Electronic Wok Diary (EWD), dispatchers can access valuable insights into a driver's remaining available time. During unexpected delays, this data empowers dispatchers to make real-time adjustments like reassigning loads to minimise disruption to delivery schedules.

Impact For Maritime Shipping

For maritime operations geofencing around ports and return depots, combined with GPS tracking, allows carriers to seamlessly monitor a container's journey from port departure to depot return. This system simplifies detention time calculations beyond the designated free period and gives shippers a clear breakdown of any detention charges they face.

In both these segments, GPS tracking technology benefits carriers and shippers alike. For carriers, it guarantees that detention fees are billed accurately to shippers. For shippers, it offers transparency for the reasons behind such charges, promoting a culture of trust and open dialogue between both parties.