How much does detention time cost the trucking industry?

Jason Cannon: 
CCJ's 10-44 is brought to you by Chevron Delo, heavy duty diesel engine oil. Now there's even more reasons to choose Delo.

Matt Cole:
Detention Time is a costly problem in trucking, but how much exactly does it cost the industry?

Jason Cannon:

You're watching CCJ's 10-44, a weekly episode that brings you the latest trucking industry news and updates from the editors of CCJ. Don't forget to subscribe and hit the bell for notifications so you'll never miss an installment of 10 44. Hey everybody, welcome back. I'm Jason Cannon and my cohost is Matt Cole. Detention time and delays at customer facilities have been among the trucking industry's top concerns since 2019. And according to the American Transportation Research Institute's latest top industry issues report, it ranks as the number eight concern among survey respondents.

Matt Cole:
While detention didn't make the top 10 concerns for motor carriers, it was the number four top concern for truck drivers. In September actually released the results of a new study on the costs and consequences of detention. Joining us on the 10 44 once again is Atris Alex Leslie, to talk about the findings of that research.

Alex Leslie:

As always, all of our research begins as a priority that our research advisory committee votes on, and that committee is made up of folks with trucking companies, but also industry suppliers, lawyers, insurers, drivers, really across spectrum of the whole industry and its partners. And they identified the costs of driver detention as a real need, not simply researching the problem of driver detention, but to specifically identify how much do drivers lose a year to detention, how much does the industry lose in productive hours or wasted fuel or lost revenue to detention to really get those big picture numbers. And so that was how it began. But of course, it's also frequently a top issue in our annual industry issues survey too. So there are all kinds of motives really for doing this research

Jason Cannon:
To compile data for the study A TRI surveyed drivers and carriers and used existing data and to stay consistent with the industry. Standard defined waiting time beyond two hours is detention time. Alex explains what all that information revealed in terms of lost time and lost money

Alex Leslie:
Over 135 million hours in 2023 were lost to detention, which is just a huge drain on productivity. Again, if you think about that's lost time, that trucks could be on the road making money that's lost time that drivers could be doing anything else, but it's also economic productivity. It's an inefficiency drain on the industry as a whole, which impacts how our industry can expand, how fast we can respond. And if you add dollar numbers to that, that ends up being about 11 and a half billion in lost revenue. So revenue that could have been made during that time, or if you want to look at it from a direct expenses perspective, $3.6 billion. So 11 and a half billion in lost revenue. But even if you set that aside, even just while carriers are sitting there, they are spending 3.6 billion in direct expenses that are not reimbursed. So that's after any detention fees are paid by shippers.

Matt Cole:
While detention is extremely costly in terms of time and money lost, the overall trend of detention is improving for carriers and drivers.

Alex Leslie:
So between 2014 and 2023, we saw that detention, the number of stops with detention dropped by about six and a half percentage points, which is good, but it was still at 39.3% of all stops. So 39% of all stops had at least some detention in 2023. So there was a slight improvement and it's worth saying that, but the number, the percentage still remains far too high. And it does vary as well based on what part of the industry you're in, whether you're a man or a woman, whether you're doing spot market freight or contract rate. So again, improvement, slight overall, but depending on who you are and where you are in the industry, you might not see as much of that improvement.

Jason Cannon:
As Alex mentioned, how often and for how long a driver is detained depends on several factors like gender, contractor, spot freight, their industry sector, and a lot more. He goes more into those after a word from 10 44 sponsor Chevron lubricants.

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Alex Leslie:
So if you just look at men, male drivers, they experienced detention in about 37% of all stops. So a little bit below the sort of overall average, but that's because women experienced detention on about 49% of all stops, which is again, it's too high, it's too high for both male and female drivers, but it's also, hatchery's done some research recently on women drivers and the barriers they experience to entering or remaining in the industry. And a lot of that is aggravated by detention. So things like access to bathrooms, we found that only 44% of facilities allow drivers to use the bathroom while they're there. Only 50% of facilities allow drivers to park while they're waiting. So for women drivers for whom safety and health and hygiene are greater concerns, they experienced attention more. So it's really sort of a double whammy unfortunately for women drivers.

If we look at spot market and contract rate, the difference is for contract freight, about 33 point half percent of all stops had detention For spot market freight, though that's 42 and a half. So again, you're more likely to be detained if you are moving spot market freight than on contract. And both of those differences were statistically significant as well. Both the gender and the freight type. Refrigerated 56.2% of their stops involve at least some detention. So at least some time over that two hour threshold, which again, we all know that refrigerated is really the worst for detention. Yeah, that number continues to be really high. It's certainly lower in truckload. It gets a little bit lower as you move into the other specialized sectors as well. But refrigerated really continues to be, and in fact, actually refrigerated got actually worse from 2014. It was the one breakdown category where detention time or rather the number of stops with detention actually got worse.

Matt Cole:
ATRI's research also found that detention can play a significant role in driver turnover.

Alex Leslie:
We came at that question from two different angles. The first was from the driver's side of things. We asked drivers, have you quit a driving job in the past due to excessive detention? And 34 point a half percent said that they had. So again, over a third of all drivers said that they'd left a previous job because of detention. Now, we also came at it from the carrier data side of things. So we had carriers turnover data, and we also had their average dwell times and we found that there was a statistically significant relationship there. Carriers who had longer average dwell times had higher average driver turnover rates. So whatever way you want to come at it, those two findings reinforce each other and really give a clear picture that detention is a real driver of turnover. On the topic of driver compensation for detention time, we did find that a majority of carriers do pay some form of detention pay to their drivers.

That usually kicks in after that two hour threshold. But what we found is that that amount of detention pay doesn't fully cover what drivers could be making if they were actually driving during that time. So what we found is that, again, when you add those numbers up, drivers end up losing each year between about $640, about $1,300 in income. And again, that's after they receive detention pay. So that's just the delta between detention pay and what they could have gotten if they were driving, which that's about 1% of the average driver income. So that's a real amount of money that makes a real difference at the end of the year in terms of lost driver income.

Jason Cannon:
Detention also leads to faster driving speeds, both before and after drivers are detained. At a customer facility

Alex Leslie:
Detained drivers are going to be driving a little over 14.5% faster than trucks that are not detained. And what's interesting is that that's actually over a 48 hour period. So it's the 24 hours after a detained stop, but also the 24 hours before a detained stop. One of the interesting findings was that drivers don't just drive faster after, but actually they drive faster before, and that could be because they know from past experience that this shipper is going to probably detain them. It could be that they're communicating with other drivers, which we know happens now more than ever, thanks to a lot of new communication and technology and so forth. So for me, a really important takeaway here is that drivers, they don't just react to detention. It's not something bad that happens and then they have to play catch up. It's something that they have to anticipate. Drivers are spending valuable time and energy constantly thinking about where am I going to be detained next and what can I do? What do I have to do to try to minimize that beforehand as well as afterwards? And that is, again, we're asking drivers to really be concerned constantly about this issue that's completely out of their control, and as a result leads to driving faster.

Matt Cole:
Another problem with detention that actually found is that carriers are only being paid on a little over half of invoice detention fees, which is less than half of all detention time since carriers don't always bill for detention.

Alex Leslie:
Carriers invoice their customers on average about 75% of the time. That varies by sector. We've got all those exact numbers in the report too, but overall about 75%. And then of those invoices that are actually sent out, only a little over half, 55% are actually paid. So that means at the end of the day that only a fraction of detention incidents ever see any kind of compensation from shippers. It's about 41% of all detention incidents involve detention fees actually getting paid. And what that means, of course, is that motor carriers are not compensated for the expenses that they end up paying, right? You still got to pay that truck payment, even if you're sitting there, you still got to pay your insurance premiums. Even if you're sitting there, you still got to pay for the fuel that's burned while you're idling, and you still of course got to pay those driver detention pay as well, which is again, one of the reasons why driver detention pay doesn't fully match.

What they could be earning is that motor carriers aren't getting fully compensated either, so they're not getting fully compensated, which means drivers don't get fully compensated. Again, that lost expense is really what's behind that big 3.6 billion indirect expenses. That is after customers pay detention fees, again, only in that 41% of the time. Now, a couple of the reasons why detention fees are only actually ever paid 41% of the time on the carrier side, there are incidents where carriers say, look, I can't rock the boat here. This is an important customer to me. If they were to pull freight, we could be in trouble, so I'm not going to bill them for everything that I should. It could be because a carrier knows, look, I've billed this customer in the past and they're not going to pay me, so I'm not going to bother wasting the time.

On the shipper side, they know that they can often get away with it. There may be disqualifying factors like if a driver arrives 10 minutes late to the appointment, that might disqualify them from detention fees from the customer, even if the customer keeps them detained three hours, which is well longer than that 10 minutes, right? Even if they were 10 minutes late because they were detained at their previous stop. So there are all kinds of these little reasons that factor in and make these current system of detention fees inadequate to the task of compensating carriers and drivers.

Jason Cannon:
So what can carriers do to solve their detention problems? Alex explains.

Alex Leslie:
The big one that we recommend, of course, is negotiating those detention fees. We at attri between this report and our operational costs report, we've put out the numbers that hopefully can give leverage to motor carriers for favor negotiations here, right? We've shown costs go up by huge percentages over the last several years, and at the same time, detention fees have only gone up by a small fraction of that total cost change. So negotiating detention fees is one way that we as an industry probably need to take that step to push customers on this. Another approach is through basically trailer optimization. The more you can shift as a carrier to drop and hook rather than live loads, obviously that reduces your potential for detention. It doesn't erase it. There's still detention that you see even in dropping hook loads, right? If you don't know where you can drop, you're still stuck waiting for someone to tell you.

But overall, that is something that we know helps. Another factor is one of the biggest things that we hear from the customers and shippers that we talk to is a lot of them or a lot of folks at the higher levels of those organizations, they simply don't know how big of an issue detention is. They hear about it, but it's one of those issues where until you really see the data on it, you think, oh, that could just be drivers complaining. Well, it's not, and we need carriers and shippers to communicate better about how much of an issue it is, and hopefully, ACT's report here can help be a conversation starter or something to point to say, look, this is the problem. Here are the numbers. Which, by the way, those lost productive hours, 136 million every year. That doesn't just hurt motor carriers and drivers. It hurts shippers too, right? It means that they're getting their deliveries slowly. It means that they're going to have more late appointments because of their own detention. So the more that we can communicate that, hopefully we'll continue to lead to more improvements.

Jason Cannon:
That's it for this week's 10-44. You can read more on ccj digital.com. While you're there, sign up for our newsletter and stay up to date on the latest and trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.