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How Shippers & Receivers Are Eliminating Detention and Demurrage Fees

July 11, 2023
Joe Fitzpatrick

Detention charges levied by carriers for loading delays are painful. During the supply chain chaos of 2021, many companies discovered they can be unpredictable enough to present a business risk. But an increasing number of facilities have found a way to completely avoid incurring these costs.

Shippers and receivers should understand that driver detention fees are not a profit center for carriers. Every party involved in logistics would prefer to run on time. Many just have no confidence that it’s possible.

But that is a mistaken view. Eliminating detention fees can be:

  • Surprisingly straightforward
  • Aligned with strategic operations goals
  • Achievable for shippers and receivers of any size or complexity

This can be done with spreadsheet software like Excel, but a dedicated loading dock management tool can take care of it more reliably.
Before long, appointments are well spread out throughout the day, instead of all arriving at once.

Five Steps to Reduce Your Detention and Demurrage Charges to Zero

Step 1:

Get as many carriers as possible to make appointments with specific time slots if they don’t already. Even if they say there’s no chance their drivers can stick to the schedule, ask them to guess. Try to get an arrival time on record for each load.

Note: This step is easier if you have a web-based bookings portal for your carriers.

Step 2:

Track actual arrival time, along with the time when loading/unloading starts and when it’s completed. Collect this data for each load, alongside the carrier name and estimated arrival time. Ideally include details like weight, quantity or product type.

This can be done with spreadsheet software like Excel, but a dedicated loading dock management tool can take care of it more reliably.

Step 3:

Have your loading dock team start prioritizing loads that arrive closer to their estimated times. You might even decide to stop working a load midway through in order to quickly attend to a more punctual arrival.

Step 4:

Collate the data you’ve been gathering per carrier.

When you have enough to make a compelling case to a particular partner, set up a meeting to discuss loading dock procedures and efficiency. Show them the correlation between punctuality and dwell time. Include data on other carriers if necessary.

Use this to advocate for more faithful scheduling. You may offer to pay higher detention rates for loads that arrive on time, or even pledge to work such loads in under an hour. In exchange you might request that all fees for late arrivals be revoked, or even ask them to pay a late fee.

This should not be a hostile negotiation. Both parties will benefit from faster turnarounds at the loading dock, and the sharing of losses along with gains helps with accountability.

Step 5:

Use the data you’ve acquired to find bottlenecks and optimize loading dock operations. When carriers make appointments, offer time slots spread throughout the day. Your coordinator will quickly become adept at fitting more loads into a day when dealing with punctual carriers, while leaving more margin of error for the less reliable ones.

These processes can be streamlined with DataDocks, which allows you to set up your capacity per time slot, per dock door or even restrict specific carriers to certain days of the week.

At this point you should be on your way to completely eliminating the snowball effect caused by too many incoming loads at once.

How DataDocks Helps Eliminate Driver Detention

Success is more likely at each of these stages with a dedicated dock scheduling system.

First of all, eliminating constant back-and-forth phone calls between your coordinator and carriers saves effort on both sides. Replacing this with an automated carrier portal has the added benefit of avoiding miscommunication and doubt.

Booking portals for carriers are included with a number of logistics management systems, but almost all of these suffer from the same security flaw. Anyone can log in and book appointments at your facility unchallenged. DataDocks is different, and only provides access to your approved carriers.

Secondly, registering the timings for each step of the process is much simpler with DataDocks. Equipped with phones or tablets, the facility security guard, loading dock supervisor and shipping coordinator can each log arrival, start and end of loads in real time with a tap of the screen.

All of this data is made simple to navigate or export as concise reports, customized to your needs.

Finally, DataDocks makes it easier than ever to identify efficiency improvements. Managers can set up their KPIs along with capacity limits. The system will alert the team whenever an appointment is taking longer than expected, while predicting the true capacity of your facility. The coordinator can restrict certain carriers to specific times or docks, and easily make other adjustments based on maintenance time, vacations or other contingencies.

Before long, appointments are well spread out throughout the day, instead of all arriving at once

How Taking Care of Detention Supports Wider Business Goals

The benefits of getting loading dock operations under control extend beyond the immediate cost savings.

Cultivating strong relationships with carriers is quickly becoming a strategic advantage for shippers. As the direct-to-consumer market continues to grow, carriers are finding it’s in their best interests to be selective about who they do business with. Getting your carriers’ trucks worked and back on the road quickly is a sure way to be designated a shipper of choice.

The data gathered from loading dock operations plays an integral role in harmonizing warehouse and transport data. Without it, the dream of end-to-end supply chain visibility is all but impossible.

Then there’s the issue of workforce retention. The unpredictable schedules, bursts of high-intensity work and overall stress at the loading dock are a major contributor to employee turnover at all kinds of facilities.

Getting the loading dock right tends to create a ripple effect on other operations. Smooth receiving leads to diligent putaway, which helps keep inventory accurate. When congestion gives way to a calm, orderly environment by the dock doors, staging can also take place more deliberately.


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