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From Bottleneck to Industry Standard: Tackling Dwell Time in the Supply Chain

From missed delivery deadlines to unnecessary holding costs, the negative impacts of dwell time on the supply chain are well known. Excessive, unexpected dwell times can disrupt fleet operations, delay schedules and threaten relationships with customers, all resulting in a loss of productivity and reduced profitability. But what exactly is dwell time and how can commercial transportation companies address the issue?

Defining Dwell Time & Detention Time

Dwell time and its subset, detention time, are critical metrics for carriers to calculate. Dwell time is the total amount of time that a driver is at a shipper or receiver facility, including the time that they spend loading or unloading goods. The clock for dwell time starts as soon as they enter the facility, and the clock stops ticking once they leave the facility. Typically, drivers have about two hours of slack time to account for time spent at the facility when no action is taking place. Detention time starts after the slack time has passed, in this example at 2 hours, 1 minute. When this clock starts to tick, drivers have to qualify to request a dwell time or detention accessorial fee, where they can recoup some of the cost expended by sitting there idle.

The Federal Motor Carrier Safety Administration (FMCSA) estimates that detention costs the industry more than $3 billion annually in lost time and productivity, while severely impacting driver pay.

The Ripple Effect of Dwell Time Problems

Dwell time is a longstanding industry problem, and is currently one of the top 10 critical issues facing the trucking industry, according to the American Transportation Research Institute (ATRI). As the volume of goods transported via commercial trucks has grown, the dwell time problem has grown over the past five years and continues to inch up toward the top of the critical issues list, where it currently lands at number six in ATRI’s annual survey of transportation industry professionals.

One of the reasons for its ascent on the critical issues list is the recent hours of service (HOS) legislative changes that limit and define the available hours that a driver has on their clock for a given day, coupled with where they can safely drive. With these more stringent regulations it becomes imperative that drivers maximize the hours that they have on their clock and actually drive during that time, as opposed to sitting idle and waiting at a facility.

Since trucking was deregulated in the 1980s, dwell time has stimulated a cost issue that carriers are constantly trying to mitigate because most of the industry gets paid on a rate per mile – it’s only while the truck and driver are moving that revenue is coming in the door. While recently compounded by HOS legislation, dwell time concerns are long standing because of how carriers get paid in the marketplace and how drive time is utilized.

It’s not just legislation that’s putting pressure on the system, labor shortages at delivery locations can lead to disorganization at the receiving facility. If schedules and appointment windows aren’t managed properly and there are staffing shortages when it’s time to unload the truck, major problems can occur.

Carriers are sometimes late due to traffic, weather and other events outside of their control. While everyone is striving to deliver on time, those arrival windows can often be missed and one late delivery can compound the issue. Problems can also arise around the lack of credibility on reporting dwell time, because for the most part it was previously self-reported.

Accessorial charges related to dwell time can also muddy the water. Accessorial charges mainly encompass the way carriers get paid for the driver waiting at the facility or while getting unloaded. They're all different and don’t adhere to any industry standard – every shipper has its own fee structure that they pay drivers for sitting at the origin or the destination location.

That lack of standard leads to ambiguity across the board when it comes to reimbursement, like how it’s calculated and how it’s proven. In discussions with carriers, we’ve heard loud and clear that they often must jump through hoops to prove when they arrived and how long they were there for. Oftentimes, a driver may report one metric and the shipper reports another, making it difficult to record accurate times and align on payment.

Further, dwell time reporting methods themselves are also varied across the industry. Sometimes drivers create paper records with arrival and departure times. Sometimes GPS activities are used as a vehicle crosses a generic point radius polygon. However, even that technology can be imprecise with anywhere from a quarter mile to up to one mile around the generic polygon included in the radius, allowing for false positives by reporting that the driver is actually there when they're actually a mile away.

The Solution: Standardization and a Source of Truth

Top of the line distribution centers work efficiently and do a great job at loading and unloading carriers. However, there are no industry standards in place for their activities and the only way to get to the root of dwell time problems is to gain clear lines of sight on what is transpiring at a facility once a vehicle arrives.

Trimble is using its Fleet Manager and Connected Locations solutions to work toward an industry standard for dwell times. Our library of more than 4.7 million places across North America includes millions of detailed, true polygons around the perimeter of each site, giving a more accurate picture of when a driver actually enters a facility. Coupled with detailed entry and exit gate information, we’re able to better understand when vehicles arrive and depart, and then use this information to calculate average dwell time metrics for different facilities. This information then adds a new level of precision for route planners and dispatchers, enabling them to better know when and how dwell times might impact fleet movements before they depart from their place of origin.

Trimble is uniquely positioned in this space as a neutral, third-party source of factual data based on its library of places, visibility into asset locations and tractor and trailer details. By bringing all these data points together, carriers have access to a true view of what happened at the facility. Over time, these metrics can help establish industry standards around dwell time, delivering a comprehensive, consistent data set able to provide broader analytical insights about transportation activities.

Impact of the Solution

During the early stages of a fleet’s daily workflow, dwell time can add a significant degree of uncertainty where drivers have limited visibility around how quickly they can get in and out of particular locations and what to expect when they arrive. That uncertainty ultimately translates to risk. By providing average dwell time metrics during the bidding and procurement process in solutions like Trimble's Engage Lane, carriers can make more informed decisions around pricing upfront. 

The potential to build in accurate dwell time costs upfront rather than being reactive down the road, allows carriers to take that into consideration prior to bidding and make adjustments. When carriers are bidding on freight or new opportunities, usually all they have is their own data about how long their drivers have sat at these locations. The beauty of Trimble’s places library is carriers can see not only their own data, but they can access information industrywide.

For example, carriers can ascertain if a certain facility is a problem for everyone. They can look at new freight opportunities and understand, on average, drivers sit there for 30 minutes. They can look at another location because it’s a great origin and destination but learn that drivers sit at the origin for two hours and then weigh the options – that the driver has a good spot but is it worth having someone sit there for two hours? If it is, what’s the price for that time?

More informed decision making happens with the line of sight to dwell time earlier in the process. There’s a level of transparency about what drivers are getting into. Then there’s the ability for the price the carrier puts on this lane to last throughout the terms of the agreement. Or on the flip side, more visibility into why the contract goes up exponentially if they understand what the drivers are getting into.

In addition, when a shipper opens a large network bid, usually 30-40% of the lanes in that bid will not work out as originally planned, so new carriers must be found. Part of the reason for that turnover is the lack of transparency of information at the early stages of the bid process. Showing dwell time information at the point where shippers and carriers are deciding whether they do business together results in stronger overall plans.

How We Move Forward Together

At the end of the day, dwell time visibility benefits both shippers and carriers in an industry that’s under duress. Following years of disruption, the transportation industry ranks high among those with the most job openings. One reason for that is the amount of waste that happens at these facilities when drivers are sitting there. The drivers aren't getting paid, they're not on their next load and that next load probably brings them back home.

The importance of truck driving jobs and the movement of goods keep our economy healthy. The stakes are high: if truck driving stopped in the U.S., in three days hospitals couldn’t keep running and in five days we would experience significant food shortages. The inefficient use of drivers can impact essential resources quickly, and it’s why addressing this industry-wide problem is so important. Because it all comes down to one driver, at one location, on one load and making sure that we can get them moving so everything can piece together from there.

Want to see Fleet Manager or Connected Locations in action? Request a demo today!

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