Whether it’s a monthly post-mortem to review detention fees or relying on your old-fashioned FIFO (first-in-first-out) methods, we need a better way to manage detention in the industry.
Detention is universally considered inefficient and wasteful, capacity draining, and a siphon on your supply chain budget. But at the same time, your business may depend on it to handle storage capacity or labor constraints.
So, how do you stop excessive fees from spiraling out of control? How do you get out of the endless month-end meetings on supply chain budgets and back to focusing on strategy and growth? You avoid unnecessary costs with visibility-driven insights that can be harnessed in the field instead of debated in the conference room.
Viewing your supply chain as a series of trailing indicators and action plans keeps you playing from behind. Teams get locked into motions that make sense in one season but not the other — or fall into carrier-driven FIFO methods that throw your priorities to the wayside.
The answer to this is proactivity. Knowing something will occur with enough time to make the right decisions based on your current needs. When it comes to detention, being alerted that a specific trailer is exiting free time will allow teams to assess if unloading it to avoid the penalty is the best move.
For example, imagine you have a yard full of hundreds of trailers from a dozen providers, each with their own detention agreements. Next-generation applications can track the detention clock of each trailer, alerting your dispatch crews to impending charges. They can now make the call to hold onto the trailer longer and prioritize other inventory or create a move task that avoids hundreds of dollars in fees.
However, predictive insights are only good if they can be acted upon, and multiple layers of communication are detrimental to timely action. It will be too late to make a difference if it requires a phone call (or even two).
For frontline employees, tools that quantify and surface insights, such as new ETAs or capacity leaving free detention time, can help quickly and continually generate savings opportunities. With training on business rules and more time to understand the trade-offs of action or inaction, frontline associates can systematically avoid detention fees while balancing competing business needs (e.g., flexing storage space versus maintaining cost).
FourKites customer Trane Technologies employs Dynamic Yard in its yard and has succeeded by giving decision-making powers and capital-generating insights to its frontline users. In just three months, they were able to get to a net positive on their investment by having a more intelligent approach to managing detention within their supply chain. Learn more.
When technology enters the equation, scenarios that are seemingly impossible to tackle become easier to manage. Take intermodal detention as an example: when a container outgates at a port or a rail ramp, the detention clock oftentimes starts to tick. How can you reconcile the time spent on the road when it arrives at your facility for unloading?
Teams today struggle with that question and will frequently allow containers to “cut the line” to get unloaded first. This sends shockwaves through your operation as intelligent inventory prioritization in the yard – or choosing what inventory to unload next based on your business needs – falls to the wayside, and schedules must shuffle to accommodate new expectations.
By deducting time on the road from the time left on the detention clock as it enters your facility, you’re left with the accurate amount of time available to complete unloading. But manually asking each driver how long it took them to make the trip is time-consuming, inaccurate, and only adds to your cost-to-serve.
Visibility tools that integrate the yard into the network can solve this problem. Since the container is already being tracked from the port or rail ramp to your facility, it can automatically deduct time spent in transit from free time. Standardizing detention clocks for intermodal and truckload shipments helps level the playing field for your associates, giving them greater autonomy over their tasks while still enabling them to prioritize loads that will incur fees.
The bonus of digitization is the audit trail that comes with it. There’s no question how long something stayed on your site if there’s a geofence record — or a gate check-in and -out timestamp — from a reputable third party to back it up. That means that when you receive an erroneous detention fee, you can dispute it on the spot with hard metrics and a record trail.
That level of redundancy, a geofence location, and a gate entry and exit timestamp help stand up to scrutiny when dealing with erroneous carrier charges.
Henkel tracks over 1 million loads annually and successfully uses FourKites data to dispute carrier detention fees.
How often do you receive detention fees months after the event occurs? This process is a time drain on teams as they react to inbound claims, requiring hours of manual time to validate charges.
What if you could submit valid charges to your carriers at the end of each month as a part of your month-end book-closing process?
That means less reliance on carriers to submit claims months after the fact, a lower cost to serve, and a proactive approach to your claims process. It also enables more consistent reporting for better root-cause analysis so you can continue to drive these fees out of your supply chain. A true win-win for you and your carrier network.
The key to proactive management of detention fees starts and ends with comprehensive visibility. Whether it’s a container leaving a port or a month-end analysis of fees levied by carriers, a digital twin of your operations keeps associates proactive and costs in check.
If you have any questions or would like to learn more about proactively managing your detention fees on your own, contact us at [email protected].
