Trucking companies and shippers should clearly spell out standards and penalties for driver detention when negotiating contracts — and stick to them — unless they want federal regulators to define driver detention time and penalties for them. Carriers should also include restrictions and penalties for excessive driver detention in their rules tariffs to enforce their policies with non-contract customers.
That’s the message John Bagileo, a veteran transportation attorney with 40 years of experience in Washington, had for carriers and shippers at the SMC3 JumpStart 2014 conference in Atlanta. Detention, he said Jan. 22, “is a safety issue,” not just an economic or contractual issue between a trucking company and its customers.
“I’ve heard of drivers being held up to 14 hours,” to load or unload trailers, he said. “What kind of pressure does that put on a driver trying to observe the hours of service? It puts very strong pressure on truck drivers, especially owner-operators.”
The industry standard for acceptable detention is two hours, according to third-party logistics company Transplace, though some rules tariffs allow up to four hours, Bagileo said. In a recent study on accessorial charges, Transplace said 81 percent of trucking companies allow two hours free detention before charging penalties, with 66 percent of carriers charging for increments of 15 minutes.
Detention penalties charged by carriers have remained stagnant over the last two years, Transplace said in its annual benchmarking study, ranging from $25 to $90 per hour, with most shippers accepting surcharges of up to $60 per hour.
In recent Capitol Hill testimony on hours of service rules, Federal Motor Carrier Safety Administrator Anne S. Ferro challenged Congress to address detention time, Bagileo said. “It will be interesting to see if Congress takes up that challenge.”
Whether Congress acts on detention or not, the Federal Motor Carrier Safety Administration might, a prospect that should concern shippers and carriers. The nation’s top truck safety regulator singled out driver detention in a Jan. 14 speech at the Transportation Research Board’s 93rd annual meeting in Washington.
“Drivers have among the toughest jobs in our nation,” Ferro said. “They operate under very difficult conditions, they operate under extreme stress and they operate, frankly, in some cases with extreme disrespect when it comes to detention time.”
Shippers at the SMC3 meeting were aware of the problem, but said detention isn’t always easy to avoid. “We watch detention, and we’re super cognizant of being a carrier-friendly shipper,” said Joshua Dolan, senior director of logistics for Dick’s Sporting Goods, a $5.8 billion retailer with more than 550 stores. “On the inbound side, we try to push most of our product through a drop-and-hook (trailer) program,” which lets drivers quickly pick up full trailer and drop empties. “On the store delivery side,” Dolan said, “it’s a different story.” Unloading at some stores can take up to two hours, he said. “We’re a little bit limited in our recourse,” but Dick’s Sporting Goods can work with carriers “to ensure drivers are compensated.”
Clorox, the $5.6 billion consumer goods manufacturer, also uses drop-and-hook programs to speed inbound freight and avoid detention, but has similar outbound troubles, Jeff Shoemaker, group manager for transportation, told SMC3.
“On the customer end, it’s challenging,” he said. “There are some bad players out there. The idea is to take a strategic approach to getting costs out of the system and work with them to optimize (distribution) and eliminate the whole discussion.”
The FMCSA has been studying how detention affects drivers for a long time. As far back as 2001, an FMCSA study found a correlation between long delays in loading and unloading and crashes. Ferro has made detention part of a broad regulatory strategy of addressing truck and highway safety by targeting driver behavior.
The agency spent $500,000 over the past two years to study the effects of detention on driver fatigue, working with the Virginia Technical Transportation Institute.
The first phase of that study is complete. “We’ll be reporting on the first phase not too far in the future and preparing the ground for phase two,” Ferro said, noting that detention, “is an area of not just inefficiency in the supply chain but inefficiency that is placed on the back of truckers and for which they are not compensated.”
The FMCSA isn’t the first regulator to look at detention, however. Bagileo said the Interstate Commerce Commission, which was closed in 1995, once investigated the practice. And detention is still with us. Enforcement of penalties is an issue, he said.
“There are a number of (rules) tariffs that allow up to four hours for loading and unloading,” Bagileo said. “But it’s often tough to go into a customer and tell them to pay” a detention surcharge — especially when they can shift freight easily to competitors. The key to stopping detention is “more cooperation between carriers and shippers,” he said, and “the best way to address it is in the contract.” However, “if there was enforcement of penalties for keeping a driver beyond four hours, that might help,” said Bagileo. The question is, who should the enforcer be?