A new day on detention pay?

May 17, 2018

John Bendel

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Is the industry turning a corner on the issue of detention time? Possibly, but don’t count on it.

At the Mid-America Trucking Show this year, Convoy, a load-matching, Web-based broker, announced it would pay drivers for detention time. If you book the load through Convoy and use the Convoy app, you only have to press a button, according to the company. You don’t have to do anything else.

“With the app, we can see when you arrived and when you departed,” said Kristen Forecki, vice president of carrier experience for Seattle-based Convoy. With that information, Convoy can track the delay time, she said. Payment of $40 per hour is calculated up to the minute from the end of a two-hour grace period.

Convoy PR person, Sarah Tobis, sent along a quote from a driver identified as Jim Spike.

“The biggest thing is you actually get the money and don’t have to talk to anyone,” Jim reportedly said.

True, Convoy’s compensation may not cover the entire cost for you and your equipment, but it’s sure as hell a step in the right direction. And given what seems like a  no-questions-asked policy, a bold one.

“Convoy’s detention guarantee is one of the most brilliant things we have seen in a while,” read the headline on a recent story in FreightWaves, the daily newsletter from the transportation data and analytics company of the same name.

Convoy may be the most visible Web company to offer detention pay. But it turns out they aren’t the only one, and they weren’t the first. That honor appears to belong to Fr8Star, which specializes in open deck loads.

According to Carl-Christoph Reckers, chief operating officer and co-founder, Oakland, Calif.-based FR8Star has been paying detention for some time now.

“When a shipper books with us, we present the accessorial rates upfront. So the shipper has to sign off on that,” Reckers said.

But the carrier doesn’t have to wait for the shipper to pay; FR8Star pays the carrier directly, though the process is not quite as simple as Convoy’s appears to be.

The carrier or driver must email or call FR8Star when the detention issue arises. FR8Star prefers a call. “That way you can have a dialogue and ask follow-up questions and actually resolve it much quicker,” Reckers said.

If the issue cannot be resolved on the spot, then FR8Star pays the carrier, usually within three days, according to Reckers.

The largest detention award to date? Reckers said one company called for a specialized trailer but was unable to load it for one week. “We paid the carrier more than $10,000 in detention,” he said.

Why get involved with detention at all?

“We’re very successful keeping carriers and building up loyalty. That’s what drives our business. We see carriers sticking with us after they’ve booked the first couple of loads,” Reckers explained. That gives FR8Star an advantage in today’s capacity crunch.

Convoy cites the same reason. Paying detention generates loyalty that benefits shippers. “Ultimately it gives shippers better access to capacity,” Forecki said.

The company has been testing the detention program for six months, she said, and has been able to give feedback to shippers, some of whom were unaware of the delays. One, she noted, didn’t realize that trucks were often lined up outside its facility simply waiting.

Maybe they should look out their window once in a while.

Will other brokers – Web-based or not – provide similar detention pay guarantees? Will guaranteed detention pay become standard?

That depends on two things.

First, will the idea succeed for Convoy and FR8Star? It appears that for FR8Star, it already has. But theirs is a niche operation. Convoy, on the other hand, is competing with the biggest, most established brokers out there, and you can bet they’ll all be watching.

The chances are high that Convoy’s paid detention will work, at least says FreightWaves. According to their calculations (forgive me if I don’t detail them), the economics make sense.

But I said the future of paid detention as an industry standard rests on two considerations. The second is the economy.

The freight market at the moment favors carriers big time – possibly the most in recent memory. But it will not last. It never does. And when this unusually high demand wanes, when carriers are once again hotly competing for loads, will guaranteed detention pay survive?

How important to shippers will the assurance of capacity be when brokers and carriers are knocking on their doors offering concessions for freight? Will some brokers, traditional or Web-based, still be willing to demand shippers commit to detention reimbursement when others don’t? Will brokers pay out of their own margins?

Guaranteed detention pay is a worthy idea, but its ultimate success is uncertain at best.