Battle of The Docks

Battle of The Docks

Copyright 2004, Traffic World, Inc.

The fallout from the new truck driver hours of service regulations may be found at the back door to your operations - the shipping dock.

Recently, I received an e-mail that read as follows:

"The new hours of service regulations have caused a number of carriers to shorten their free time for loading and unloading. I have some questions. I''m not going to get into the merits of the charges themselves but rather who should pay? If we are doing the loading and unloading and cause the excess time, we should be responsible regardless of the freight terms. If a shipment is outbound and detention occurs at the destination, should not the consignee be responsible even if the freight is prepaid and we have signed section 7? And the same should apply on a collect inbound shipment and the shipper caused detention; isn''t this his bill to pay?"

Great questions, but since this isn''t Colin Barrett''s Q&A column, I''ll leave the technical stuff to him. As a general rule, (absent a review of the tariffs) detention is borne by the party that caused the detention.

The answer, however, isn''t nearly as important as the real question: Shouldn''t my customer or supplier be responsible for doing something that drives up my costs? In a perfect world, the answer would be "yes." But we don''t live in a perfect world.

Chances are pretty good that most of the shippers who read Traffic World work for "sales driven" organizations. That''s a euphemism for: "We''re in a dog eat dog competitive environment and we''ll do almost anything that''s honest to keep our customers happy."

In other words, if you''re a transportation professional whose budget is getting dinged for all the accessorial charges, tough luck. Don''t even think of passing along charges for detention and waiting time to your customers or critical suppliers.

But given the magnitude of these accessorial charges, something has to give. As Traffic World has chronicled, since waiting time counts against the on-duty driving time, trucking companies have been increasing the charges by 100 percent to 300 percent (depending on whether it''s the second or third stop in a multistop move). And, the situation is likely to get worse as the year progresses. Hopefully, senior level executives will wake up and address the factors that are driving up your costs of doing business. However, until that great awakening occurs, there are certain things that transportation professionals should be doing immediately.

First, appointment times are going to become increasingly important. With some carriers billing for waiting time in 15 minute increments and other carriers putting certain facilities on their "no load" lists because of excessive waiting time, companies will mandate appointment times.

One shipper said the cost of being charged for appointment times (e.g. $36 per appointment) is significantly lower than the cost of making a trucker wait. We have seen instances of carriers charging detention charges of $90 to $150 an hour.

Second, become a "dock expert." Let''s be honest, the shipping/receiving docks are one of the most overlooked areas in your company. But the HOS changes are putting the efficiency of this area under the spotlight.

Invest the time needed to improve your dock operations if they need to be more efficient. Take action if you''re seeing accessorial charges from carriers delivering to your customers or you are getting feedback about your suppliers'' or customers'' docks. Let the appropriate people in your organization know what impact this will have on your cost of doing business with that customer or supplier.

Many companies are running customer profitability analyses; this is something that needs to be addressed.

Finally, be prepared to reevaluate shipping terms. Some shippers are taking the drastic step of converting their "worst" customers - in terms of waiting time and dock operations - from prepaid to collect and in some instances mandating customer pickups because of the waiting time issue.

Prospectively, the rule will be this: "If you make the trucker wait, you''re going to pay." For one senior executive who expressed concern about the increased accessorial charges, I suggested he view the truck as one gigantic taxi. If you ask the taxi driver to stop and wait awhile, the meter will continue to run. If you make the truck wait, the meter is going to run and you''ll have some very unpleasant accessorial charges.

In the HOS arena, the battle of the docks has begun. Make sure you''re in a position to win the battle.

-- Regan is CEO of Tranzact Technologies, a Chicago-based logistics information company.