Have you ever been in a situation when your or your customer’s freight has been held hostage?
Hostage load scenario is stressful and unpleasant for all the parties involved, and the resolution might be very time- and energy-consuming.
Being prepared and aware of the potential risks is the best way to try and avoid these situations as much as possible.
Why do carriers hold freight hostage?
Carriers might refuse to deliver a load until their demands are met. Not surprisingly, the demands are usually payment-related. A carrier might be looking for payment or guarantee of the payment before they release the load for a variety of reasons:
Previous payment history
The carrier either has not been paid for the load they have hauled in the past and demands the payment for it before delivering the load in question, or has previously faced significant deductions on other loads and wants to be paid for the load in question upfront and in full.
The original destination has been changed after the load picked up, and the carrier is looking for the rate increase for the extra miles or having to cancel their planned reload.
Significant changes in load details
The carrier is looking for more money that initially agreed for hauling a load which is different from what they have been told originally (weight increase, dimension change, temperature, etc)
The carrier has been held at the shipper for a while and refuses to deliver a load until they receive a guarantee of the payment or the payment itself with the detention charge added.
The carrier is aware of a potential claim or back-charges on the load they are hauling and refuses to deliver a load until they are sure they will be paid in full.
In a double-brokerage scenario, the actual carrier might have a problem with the ‘originally contracted’ carrier and hold the load hostage until the latter meets their demands. In this case, taking care of the issue might get even more messy.
What can you do to prevent this?
- Communicate and notify carriers of possible changes as soon as possible
- Know your lanes, facilities and common issues and plan them in
- Use Rate Confirmations/Carrier Agreements to outline the requirements
- Use carrier vetting by implementing the use of public records as well as internal database and historical data
- Know double-brokerage red flags and stay away from it
- Focus on creating long-term partnership with carriers and using dedicated carriers for your dedicated lanes
Both, the carrier and the shipper/broker have their reasons to stand their ground - the carrier is afraid they will not receive any payment for hauling the load if they just trust their opponent and deliver it, and their counterpart is afraid to pay upfront and never have the load delivered. Arriving to a consensus might be a tough task, and there are constant disputes about the best strategies you can use. Sometimes the easiest way to resolve it is to provide a legal guarantee of the payment once the load is successfully delivered.