Take a look at our Fall edition of Point to Point, presented by Averitt, with topics including the challenges of driver retention, shipper success story with AudioFormz, FTZ's and bonded warehouses, and the role of technology in driver safety.
Point FALL 2022 Logistics insights provided to you by 1 2 IN THIS ISSUE 3 4 AUDIOFORMZ & Averitt Partner to Deliver Sound With Style THE ONGOING Challenge of Driver Detention FTZs & BONDED WAREHOUSES: Clearing Up Mis- conceptions
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THE ROLE of Technology in Driver Safety
THE ONGOING CHALLENGE OF DRIVER DETENTION
Truck driver detention is nothing new. The issue has been discussed, debated, and argued about for years. Yet, in all that time, the challenge has only worsened – causing increasing ripples across supply chains and throwing off truckload delivery schedules that were already impacted by supply shortages, capacity issues, and an ongoing driver shortage. In this article, we examine some of the contributing factors FIRST, WHAT IS ‘DETENTION?’ Driver detention refers to the time a truckload driver is delayed at a stop while waiting for their truck to be loaded or
unloaded. The industry standard dictates that trucks should be loaded within two hours. After that, the shipper is expected to pay an hourly rate for every hour that a driver is detained. This detention fee adds a real cost to the shipper, as well as to the driver. While these fees may seem reasonable from the driver’s point of view, they aren’t always paid. And even when they are, they don’t fully cover the cost of a stationary truck’s lost time. In 2019, The American Transportation Research Institute (ATRI) did a study on driver detention. Compiling information from 1,900 drivers, they found that between 2014 and 2018: • Drivers reported a 27.4% increase in delays of six or more hours. • There was nearly a 40% increase in drivers’ reports of pickups and deliveries being delayed over the past 12 months due to customer actions. • The negative impact of detention on carrier revenue and driver compensation is likely even greater among smaller fleets (those with fewer than 50 units), 20% of whom report that they don’t charge for detention in order to stay competitive.
• The average national wait time has risen to 156 minutes. It’s no coincidence that “Detention/Delay at Customer Facilities” was ranked as the second highest concern among commercial truck drivers who participated in a 2021 survey by the American Transportation Research Institute. (Driver compensation and Parking tied for the top spot. Also, the #2 ranking is specific to Commercial Truck Drivers. When aggregated with responses from Motor Carriers, Detention ranked 7th – still up two spaces from 2020.) All of that lost time adds up. According to a 2018 study by the Department of Transportation, commercial truck drivers lose between $1.1 and $1.3 billion in pay every year because of detention time. And there are other consequences of detention. When a truck driver is not loaded within the allotted time, it sets back the whole driving schedule and raises the potential for any or all of the following situations: • The driver can run out of legal driving hours and no longer have time to get goods to their destination. (Current regulations state that a driver can only be on duty for 14 hours, with 11 of those spent driving.) A delay at one shipping point can cause the driver to
miss an appointment at the next pickup – generating even more detention time. • If unable to meet their next appointment, a driver may lose that load altogether to another carrier. • Detention time can cause a driver to take unnecessary risks on the road in an effort to make up for lost time – potentially increasing the likelihood of an accident. WHAT’S BEING DONE? (Not as much as you might expect.) As part of the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) passed into law last year, the Federal Motor Carrier Safety Administration (FMCSA) has initiated a study on truck driver detention with the goal of measuring its impact on highway safety and workforce wages. Unlike previous studies, the Department expects this one to provide more insight thanks to data collected from electronic logging devices (ELDs). Before ELDs, shippers could disagree over how much time was really spent in detention. Since the ELD mandate took effect in 2017, it’s become far easier to accurately track and report a vehicle’s time in a particular location. Still, while the federal government – CONT. PG2
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AUDIOFORMZ & AVERITT PARTNER TO DELIVER SOUND WITH STYLE
in the past with damages, but I can tell you with Averitt, it’s just a world-class operation.” “We rarely have damages at all with Averitt, and, they cover all the regions of the country,” Cherry adds. “That helps us as well because we have dealers from California to Florida. So just talking and working with Averitt, explaining our needs and [Averitt] addressing them, is awesome.” “When we initially started [our] conversation with AudioFormz and Ronnie, his greatest pain points were having a consistent contact and a consistent transportation provider,” Cindy Bumbalough, Averitt’s Director of International Solutions, says. Averitt Transportation Specialist Debra Legate adds “We identified some of the challenges that AudioFormz was having with their customers, both on service, transit times—and also claims—and Averitt was able to provide better service, better on-time to their customers, and with fewer claims.” “We started with domestic freight,” Cherry says. “Debra came in here and mentioned that Averitt had an international freight division as well.” Bumbalough adds “When we began providing transportation for Ronnie’s LCL cargo coming inbound,
it started from Shanghai and we moved cargo from Guangzhou and Xiamen in South China up to our North China facility in Shanghai to load it out in our Asia boxes coming inbound because of the speed and efficiency to market that Averitt’s service provided.” “I have multiple suppliers in China.” Cherry says. “You know, now I have someone [with Averitt] I can talk to about consolidating all these goods into one container and get them over here, which saves the company a lot of money.” “So as it worked out,” Bumbalough says, “he [Ronnie and AudioFormz] became one of our flagship accounts on the new Asia Express Service to Dallas.” “I would never have had that just by dealing with my individual suppliers over there,” Cherry says. “They just care about their goods.” “And honestly,” Bumbalough says, “he was looking for some customer service as well.” “Averitt by far has the best customer service and support for us,” Cherry explains. “International freight happens late at night. I mean, it’s midnight here, but it’s, you know, 10 o’clock there in China. And there’s many times I’m shooting over emails to Averitt and Cindy, and I get a response at 1:00 in the morning.” “That doesn’t happen with anybody else!” Legate especially enjoys the business relationship Averitt has with AudioFormz, citing how special it has been to witness their growth over the years, from typical, small beginnings to where they are now in their industry. “The people at Averitt are awesome to work with,” Cherry says. “At the end of the day, it’s about building the relationship and partnership.” “Partnering with them,” Bumbalough adds, “ Being shoulder-to-shoulder with them, and being dedicated to their success with them. There’s no greater feeling.” Perhaps most importantly, Averitt simply makes doing business—even international business—easier. “It makes my life a lot easier knowing that I have one company that can handle international and domestic freight,” Cherry summarized. P to P
Watch the video at Averitt.com/AudioFormz
AudioFormz–an exciting company based in beautiful Canton, Texas that outfits UTVs, side-by-sides, and golf carts with audio equipment and lighting accessories – has partnered with Averitt to become one of the flagship accounts in Averitt’s new Asia Express Service, delivering from China all the way to Dallas, Texas. The power of one provider for a cutting-edge company like AudioFormZ is proving to be an effective and powerful match. AudioFormz, which operates out of its new, 36,000-square-foot facility on 17.5 acres, has been creating innovative, fiberglass products for the mobile audio industry since 1999. “Our products are bulky but lightweight, so we have to build custom pallets for shipping,” AudioFormz Owner Ronnie Cherry says. “We’ve always had issues
when there’s more labor on site to assist. Factor in whether the cost of operational losses due to detention outweighs the cost of extra labor and/ or equipment. An additional forklift and an extra set of hands can make a big difference. Drop-hook programs: If you’re able to implement a drop-trailer program, you can effectively remove detention from the equation. Your drivers can simply unhitch and move on to the next pickup/delivery. Clarifying the stakes: This is another point rooted in fostering better communication. Sometimes, shippers simply don’t realize the domino effect a few minutes delay can cause. Making them aware of the compounding
Communication: It may sound obvious, but oftentimes simply contacting the shippers and receivers to inform them of the scheduled appointment and prescribed loading time can cut down on detention. Sending alerts of a truck’s position can also ensure that everything’s ready to go when your driver arrives. Route optimization: Using routing and scheduling software not only helps you plan the most efficient routes, it can also help you prepare for different “what if” scenarios. Real-time updates, coupled with in-cab telematics, can also help ensure that your drivers are on-time. Using the proper labor and tools: Orders can be prepped more quickly
impact these stoppages have on both productivity and profits can go a long way toward reducing instances of detention.
FROM PG1 – acknowledges the problems associated with detention time, it has, thus far, avoided getting directly involved. They see the problem as one that’s best left to the industry itself to solve. As one spokesman for the FMCSA said, “The costs of rigorous data collection and analysis would likely outweigh the benefit, and FMCSA primarily views detention as a market efficiency problem best addressed by the private sector.” TIPS TO HELP REDUCE DETENTION TIME Everyone loses when a driver is detained. But fixing the problem requires some coordinated efforts. Here are a few steps that can help minimize surprises and result in fewer cases of detention.
WORKING TOWARD SOLUTIONS
The issue of driver detention is one that impacts businesses throughout the transportation industry. At Averitt, we’re committed to bridging the gaps with our customers by focusing on clear communication and building long-term relationships. While there’s no single, instantaneous fix for the detention problem, we know that by working together and setting clear expectations, we can help ensure a win-win situation for everyone. P to P
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FOREIGN TRADE ZONES AND BONDED WAREHOUSES: CLEARING UP MISCONCEPTIONS
Southeast Asian Nations, South Korea, China, Japan, Australia, and New Zealand – signed the Regional Comprehensive Economic Partnership. THE STORAGE QUESTION Bonded warehouses are another common consideration for shippers trying to reduce their freight spending. But once again, terminology creates a stumbling block – specifically when it comes to understanding the difference between a Bonded Warehouse and a Bonded Container Freight Station. Bonded Warehouses were introduced in the 1800s to create storage for goods before a duty was paid. Goods stored in Bonded Warehouses go through the usual Customs processes, and duties are due when the goods are transferred from the warehouse for distribution. Because no duty is collected until the product is withdrawn for consumption, Bonded Warehouses give importers more control over their finances. But unlike FTZs, products in a Bonded Warehouse can’t be opened, modified, or altered – cartons must leave in the
For all the variables of international commerce – with its endless combinations of commodities, origins, and destinations – there are still some things all shippers have in common: a desire to streamline the supply chain and reduce freight costs. Two of the most common ways they achieve these goals are through Foreign-Trade Zones (FTZs) and bonded warehouses. But despite their commonality, there are several misconceptions regarding each. In this article, we try to clear up some of these misunderstandings and help you better understand how each method could benefit your business. A ZONE BY ANY OTHER NAME The first problem is that the term “Foreign-Trade Zone” is often used interchangeably with “Free- Trade Zone.” But they’re not the same thing. (This misunderstanding isn’t helped by the fact that they share the same initials). The most significant difference between the two lies in their location. A Foreign-Trade Zone is a designated location on U.S. soil – typically at or near a Port of Entry – where incoming goods are handled, manufactured, and re-exported without intervention by U.S. Customs and Border Protection (CBP). In a Foreign-Trade Zone, merchandise is treated as international commerce outside the jurisdiction of the U.S. Since the goods (both domestic and foreign) within an FTZ haven’t cleared Customs, these zones allow for increased freedom of movement for goods and more streamlined administrative procedures. They allow companies to operate their supply chain more effectively by enabling them to legally avoid duties and merchandise processing fees. Foreign-Trade Zones were established by Congress in 1934 to “expedite and encourage” foreign commerce while keeping jobs on American soil. Any merchandise not expressly prohibited by the Foreign-Trade Zones Board may be admitted into a zone without going through formal Customs procedures or paying import duties. Forbidden items include anything considered detrimental to public health, interest, or safety. Once inside the FTZ, goods can be manipulated, repackaged, repaired, modified, or undergo additional manufacturing, then be re-exported without Customs being part of the process. This makes them particularly useful for American firms that import components they incorporate into products destined for export, since they save on both incoming fees and duties that would be incurred if shipping their product domestically. A Free-Trade Zone, on the other hand, is located outside the United States. Free-Trade Zones are defined by the World Bank as “duty-free areas, offering warehousing, storage, and distribution facilities for trade, transshipment, and re-export operations.” As with Foreign Trade Zones, they represent a class of special economic zone where goods may be taken in, stored, handled, and re-exported without being subject to customs duties. The chief difference lies in their location outside of the United States. In November 2020, the world’s largest Free- Trade Zone was established when 15 Asia-Pacific countries – including 10 members of the Association of
WHICH IS BEST FOR YOUR BUSINESS? FTZs and Bonded Warehouses are options for companies looking to store their products long-term while minimizing paid duties. Each has its advantages, so it becomes a matter of what’s the right fit for your business. According to U.S. Customs and Border Protection (CBP), some of the advantages of using FTZs include: • CBP duty and federal excise taxes are paid only when the merchandise is transferred from the zone for consumption. • Merchandise is not subject to U.S. duty or excise tax while it’s in the zone. • CBP security requirements provide protection against theft. • Merchandise may remain in a zone indefinitely, subject to duty. The advantages of using a Bonded Warehouse include: • Duty is not collected until the merchandise is withdrawn for consumption. • If no domestic buyer is found for the imported articles, the importer can sell merchandise for exportation, thereby eliminating the obligation to pay duty. While the differences may seem slight, each has advantages depending on your specific business needs. At Averitt, our International team has the experience and expertise to help you navigate the nuances of these and other decisions impacting your international shipments. If you’d like to learn more about how to streamline your supply chain and minimize freight costs, contact our team at 1-866-249-8496 , view our email directory on line at averitt.com/contact/directory, or simply email CustomerService@Averitt.com and our friendly associates will guide you to the department to meet your needs. P to P
same condition they arrived. A primary advantage to Bonded Warehouses is the storage time allowed – up to five years in the U.S. This creates an opportunity to delay the introduction of a product to market until it’s most profitable for the shipper. Container Freight Stations (CFS) are different animals altogether. A CFS is a facility that consolidates or deconsolidates freight before preparing it for the next leg of its journey. Unlike a bonded warehouse, a CFS is intended for temporary storage – it allows you to hold your product in bond just long enough for the customs clearance process to be facilitated. A CFS is involved in an export-import transaction, both at the point of origin and the destination. As such, they’re responsible for customs clearance procedures and documentation for all shipments. But a chief point of distinction is the fact that freight can typically only be stored in a CFS for up to 15 days. If the freight does not ship out within that time, it will be seized by Customs. Extensions are allowed but normally require a written request. Such extensions are typically for one additional week.
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THE ROLE OF TECHNOLOGY IN DRIVER SAFETY
DRIVER ALERT SYSTEMS Driver fatigue can happen at any time – even among those who follow proper protocols and don’t knowingly violate hours of service guidelines. That’s where driver alert systems can prove invaluable. These systems detect the level of a driver’s drowsiness and subsequently warn them to get off the road. They use advanced algorithms to observe and analyze factors like the time of day, length of the trip, frequency of turn signal use, and the driver’s steering behavior. FORWARD COLLISION WARNING AND MITIGATION SYSTEMS These systems aim to reduce accidents caused by a driver’s inattention. Using cameras and sensors, they alert drivers if they’re getting too close or tailgating another vehicle. They depend heavily on LiDAR – light detection and ranging – technology, which uses pulsed lasers to determine the distance between objects. In many cases, they’re paired with functions such as automatic emergency braking (AEB) and lane-keeping technology, which help keep drivers and trucks safely clear of other vehicles. For instance, Averitt tractors utilize the Detroit Assurance System, which features Active Brake Assist and Adaptive Cruise Control to adjust the truck’s cruising speed automatically. ELECTRONIC STABILITY CONTROL Electronic stability control (ESC) focuses more on the equipment than the operator. Much like driver alert systems, ESC observes things like steering wheel activity and tire movement. But instead of measuring a driver’s drowsiness, it looks for signs of slippage or loss of traction. Once a problem is detected, the system can immediately do things like decrease speed or lower the engine power of the vehicle. This quick reaction time and high accuracy rate makes ESC particularly useful during unexpected road events or under bad road conditions. CAMERAS For any driver, visual limitations can be dangerous. Fortunately, cameras offer a simple solution. By providing the driver with a clear view of the area around the truck, cameras help assess blind spots – not only on the move, but also in reversing and docking situations. A rearview camera on the trailer and side-view cameras on the tractor can help a driver visualize blind spots, while a front-facing truck dash camera can serve as an eyewitness to collisions and other driving risks.
ARTIFICIAL INTELLIGENCE AI is also making its presence felt in the trucking industry. By helping with things like route planning and traffic monitoring, AI applications can help truck drivers avoid risky traffic situations. That said, the rise of self-driving trucks attracts the most AI attention. Since TuSimple’s successful 22-hour trial run from Phoenix to Dallas in 2019, interest and implementation have only increased. While proponents argue that self-driving trucks could make roads safer in the future by reducing the hazards of tired or distracted driving, there’s still a long way to go – and many sides to the issue. advantage of is the Side Guard Assist. This helps to detect objects in a driver’s blind spot. It has both a visual and audible warning system to make the driver aware of vehicles they may not be able to see directly. Click here for a handy PDF of safety features on Averitt trucks. Technology and the focus on proper education is one of the reasons Averitt has been honored by the Tennessee Trucking Association with their First Place Safety Award for both LTL and Truckload. P to P SAFETY ADVANCES AT AVERITT One recent development Averitt is taking
Trucking is an indispensable part of the US economy, accounting for roughly 70% of all goods transported nationwide. Truck driving is also the most common job in roughly 28 of the country’s 50 states. Yet every time a truck driver gets behind the wheel, they face risks. The occupation ranks among the most dangerous in America, with upwards of 766 fatal injuries annually. Although 80% of these accidents are caused by cars and other passenger vehicles, accidents can also be caused by any number of factors – such as careless handling of the truck, driver fatigue, and equipment failure. This leaves fleet managers and safety directors with the tall order of maintaining a culture of safety in their company. Fortunately, modern trucking technology is evolving rapidly – as are the protocols that can improve safety for drivers. New studies indicate that implementing such accident mitigation systems as forward collision warning and automatic emergency braking (AEB) could reduce the frequency of certain accidents by as much as 40%. Given the enormous human and financial costs associated with trucking accidents, an investment in safety technology can pay enormous dividends. Here we outline a few of the technologies contributing to the improving safety of fleets nationwide.
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