What is detention cost in supply chain?

Detention cost in supply chain refers to the fees charged by carriers when trucks, trailers, or containers are held at a shipper’s facility longer than the agreed-upon free time for loading or unloading. It’s a financial penalty designed to compensate carriers for lost time and reduced equipment utilization when delays occur at warehouses, yards, or docks.

In supply chain management, detention cost is both a performance metric and a financial risk. It reflects inefficiencies in yard or dock operations and can significantly increase total transportation spend if not properly managed.

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How detention cost works in the supply chain

• Free time window: Shippers and carriers usually agree on a grace period (commonly 1–2 hours) for loading or unloading.
• Detention begins: If the truck is not released within this window, detention fees start to accrue on an hourly basis.
• Causes of detention: Poor dock scheduling, labor shortages, paperwork delays, or yard congestion often lead to detention costs.
• Carrier billing: Carriers track wait times through check-in/check-out logs, ELDs (electronic logging devices), or yard management systems (YMS) and invoice shippers for excess time.
• Impact on drivers: Detention time also eats into drivers’ federally regulated hours of service (HOS), limiting their ability to take on additional loads.

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Why it matters

• Cost impact: Detention fees can add up quickly, sometimes costing hundreds of dollars per truck per day, increasing overall freight spend.
• Carrier relationships: Frequent detention issues frustrate carriers and drivers, potentially leading to reduced service or higher rates.
• Operational efficiency: High detention costs often signal bottlenecks in warehouse or yard operations.
• Driver productivity: Delays reduce driver utilization and efficiency, impacting carrier capacity and reliability.
• Supply chain performance: Detention disrupts schedules, slows freight flow, and increases the risk of late deliveries.

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Common questions about detention cost in supply chain

How is detention different from demurrage?
Detention occurs when trucks, trailers, or containers are held too long at a warehouse or yard. Demurrage applies when containers sit too long at a port or terminal. Both result in added fees.

Who pays detention costs?
Shippers typically pay detention costs to carriers if delays are caused at their facilities. In some cases, contracts may allocate costs differently between shippers, brokers, or 3PLs.

How much does detention cost?
Rates vary by carrier and contract, but detention fees are often charged hourly and can range from $50 to $100+ per hour.

Can detention costs be avoided?
Yes. Improved dock scheduling, labor planning, digital check-in systems, and real-time visibility tools help reduce detention.

How does technology help reduce detention?
Yard management systems (YMS), transportation management systems (TMS), and visibility platforms can automate scheduling, provide alerts, and measure dwell times to identify process gaps.

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Putting it all together

Detention cost is a common but avoidable expense in supply chain management. It compensates carriers for delays, but it also highlights inefficiencies that ripple across operations — from driver dissatisfaction to higher freight rates and late deliveries.

By investing in better scheduling, visibility, and automation tools, businesses can reduce detention costs, strengthen carrier relationships, and improve overall logistics efficiency.

In short: detention cost in supply chain is the fee carriers charge when loading or unloading takes longer than agreed — and reducing it is critical for controlling costs and keeping freight moving smoothly.