Delivery Penalties

Michael Ludwig

Well-Known Member
Jul 6, 2009
1,933
2,811
113
64
Simcoe, ON
20
So, how do we all feel about the shift to early or late delivery penalties to big box retailers?
Has this changed your approach to dealing with them? How has it affected your pricing for such loads?
 
In Canada we have made deals with Walmart/Loblaws/SDM/Most of Sobey's to pick up and just work their freight charges back into the cost. We are struggling with the rest but we make it work, it is the same old story the bottom 20% cause all the problems. Some of them are getting so ridiculous that we are telling them to pick up their product because the fines are worth more than the order. This is what we do so we have to always figure a way.
 
So, how do we all feel about the shift to early or late delivery penalties to big box retailers?
Has this changed your approach to dealing with them? How has it affected your pricing for such loads?


My approach hasn't changed. I've managed to grow old and fairly wealthy without dealing with them at all..
 
I find certain brokers are very unreasonable when it comes to late charges.
 
I don’t believe they are referring to late charges imposed by freight brokers. The topic appears to be late charges imposed by large shippers such as food chains and big box retail chains.
 
We have managed to grow each and every year without dealing with the big box stores. If everyone would stop bowing to there uncommom business practices including manufactuers that bend over to sell them product it would shut down there supply chain and they would sure change there thoughts.
 
  • Like
Reactions: Nawk
We try to avoid those loads as much as possible because they are becoming totally ridiculous with fines and penalties! Don't be early, but don't be late.... the check-in time at the shipping/receiving office is the ACTUAL arrival time, not when you arrived at the gate, we will only accept deliveries when such and such planets are aligned in the sign of Leo only, etc, etc and it goes on and on!
I'm pretty sure a load of canned goods, laundry detergent or baby diapers that is a few minutes late or early will not send the entire universe into total chaos! On the flip side, these large chains have absolutely NO PROBLEM making your truck wait for hours on end even if it is on time.
A few years back, we were picking up a load at a P&G facility. My driver was there for 10 hours to load and when it came time to ask for detention, their internal "system" said he was only there for 2 hours, even though we had proof that he was there for the entire 10 hours!
I think it is total BS, if you ask me.
 
You figure if 1 DC fines 5K a day which I'm sure it's is more you would be looking at 1.5 million a year and that is just 1 DC so not bad money right to the bottom line. You should see all the other fines they have , Out of Stock, Didn't keep your 3 month avg above a certain %, skids did not conform to size etc etc etc. You wonder why things cost so much?
 
Our company policy is pretty simple. We do not pay any fines or penalties due to delivering late, period. So we do not charge them to any carrier ( if it's a load we sold to an outside carrier )
That's it. Less headaches!
 
  • Like
Reactions: marylou
The problem is more widespread than just fines to delivering carriers. It was explained to us by a large multinational supplier of various food products, that the retail store, i.e. Loblaws or Sobeys, fines them when product is not available, or late. Not to say that this process is ethical or correct, but like everything else in our industry, the “fines” flow downhill.
 
As a general rule of thumb we don't service Loblaws, Sobeys, Walmart, or Costco. However, that is not to say that if I am stuck somewhere, I won't take one of their loads. However, I have to feel very good about the load or I will simply run empty.
I was recently part of a conference that included the big U.S. carriers (the big ones we are all familiar with), and the question I posed here, was posed to them. They have some very interesting and creative ways of dealing with these deliveries.
One carrier does not even accept their business under any circumstances. It's company policy to run empty rather than take these loads.
Another score cards them. They have determined that 40% of their loads to one particular receiver will be fined, so they incorporate that projected fine total across all of their rating, then surcharge it. If the customer does not like their pricing, they are fine with that ... "find someone else to haul your goods".
Others, if there is any sign of risk at all of being fined, simply refuse the load from the outset, even if they have to cancel it at the last minute.
In general, none of the big U.S. carriers will work for Walmart or Safeway at all.
What I found equally fascinating was all of these carriers put their driver comfort/health/well being at these types of shippers and receivers ahead of profits, and generally incorporate a "driver-aggravation-surcharge" buried in the rate. They pay a bonus to drivers to service these types of shippers/receivers.
As a result of my question here, I have also found that most of us, in some way, shape , or form, tend to mirror in some aspect or another, pretty much the same general principles as the large U.S. carriers when it comes to these types of customers.
So, after all is said and done, it begs the question; "If mainstream transportation in North America does not service the type of customer that makes its bones off the backs of its carriers, who then services these customers, and why?".
Kind of thought provoking for a Friday isn't it :)
 
  • Like
Reactions: DIETCOKE
I definitely like the "aggravation surcharge"! That would go nicely with my "babysitting" charges (the have-you-done-your-job-yet-so-I-can-do-mine charge)
 
It would seem that the carriers who service this type of shipper/receiver, specialize only in it. In other words, it makes up the bulk of, or their entire business operation. To try and incorporate the demands that these shippers make as an occasional back haul, is way too difficult as Michael mentioned above. It really isn’t any different than any other “specialized” transportation, it just has it’s own unique set of challenges.
 
It would seem that the carriers who service this type of shipper/receiver, specialize only in it

It's like anything else we do in this business you make it work or you don't do it, know the pitfalls and avoid them at all cost.
 
As a general rule of thumb we don't service Loblaws, Sobeys, Walmart, or Costco. However, that is not to say that if I am stuck somewhere, I won't take one of their loads. However, I have to feel very good about the load or I will simply run empty.
I was recently part of a conference that included the big U.S. carriers (the big ones we are all familiar with), and the question I posed here, was posed to them. They have some very interesting and creative ways of dealing with these deliveries.
One carrier does not even accept their business under any circumstances. It's company policy to run empty rather than take these loads.
Another score cards them. They have determined that 40% of their loads to one particular receiver will be fined, so they incorporate that projected fine total across all of their rating, then surcharge it. If the customer does not like their pricing, they are fine with that ... "find someone else to haul your goods".
Others, if there is any sign of risk at all of being fined, simply refuse the load from the outset, even if they have to cancel it at the last minute.
In general, none of the big U.S. carriers will work for Walmart or Safeway at all.
What I found equally fascinating was all of these carriers put their driver comfort/health/well being at these types of shippers and receivers ahead of profits, and generally incorporate a "driver-aggravation-surcharge" buried in the rate. They pay a bonus to drivers to service these types of shippers/receivers.
As a result of my question here, I have also found that most of us, in some way, shape , or form, tend to mirror in some aspect or another, pretty much the same general principles as the large U.S. carriers when it comes to these types of customers.
So, after all is said and done, it begs the question; "If mainstream transportation in North America does not service the type of customer that makes its bones off the backs of its carriers, who then services these customers, and why?".
Kind of thought provoking for a Friday isn't it :)
Anyone that takes cheap freight and then accepts fines of any kind wont be in business long, some freight brokers love this business but carriers don't. You might see me collecting buggy's, or working as a greeter when my freedom 85 retirement package kicks in but otherwise i stay away from Walmart
 
  • Like
Reactions: Grandpa