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Beware: 5 Factors That Can Hurt Your Final Mile

As an importer, you have no doubt spent considerable time reviewing the elements involved in the import of your goods and the many moving parts required to ensure a smooth logistics supply chain.

Typically, importers tend to focus on the big picture in terms of container costs and transit times. However, just getting your container to port is usually not the final objective. There are important aspects of that last portion of your logistics supply chain, such as transporting your goods the final mile to your door. If you are like many importers, that final mile is completed with the assistance of trains and trucks, and is not without risks.Final Mile

The trucking industry has experienced significant pressures in recent years. Federal regulations regarding emissions and work hours, driver shortages, fluctuating markets, and even weather affect your trucking rates. Additionally, your overall rates will depend on things such as the classification of your cargo and shipping location (of course). Let’s examine some of these factors and possible charges, unique to the trucking portion of your logistics supply chain.

Fuel Surcharges

All drivers are familiar with the ups and downs of fuel prices. However, those in the trucking industry must pay particular attention to variations in fuel prices because the price of fuel is a primary factor in the cost of moving your freight. To offset increased fuel costs, carriers have made it a common industry practice to include a fuel surcharge, usually based on the U.S. National Average Fuel Index. These charges are typically assessed on a per gallon basis and can fluctuate on a weekly basis as carriers carefully monitor fuel costs.

Chassis Rental / Chassis Charge

Prior to 2009, the United States was the only market where ocean carriers provided chassis to trucking companies. When carriers phased out the practice of providing chassis equipment, however, importers saw an increase in trucking rates because drayage companies were forced to rent chassis equipment from third-party leasing companies or invest in their own chassis equipment. Subsequently, these charges are passed on to importers with the typical chassis rental fee ranging from $25-30 per day. Charges increase the longer the chassis is in use to move the container.

Clean Truck Fee

The Clean Truck Program was implemented in 2009 by the Ports of Los Angeles and Long Beach in an effort to reduce emissions in and around the ports. This program requires that trucks operating at the port comply with emissions as defined by the 2007 Federal Clean Truck Emission Standards. The Clean Truck Fee (CTF) is assessed by the Ports of Los Angeles and Long Beach on every loaded container move that is performed by trucks that are not fully or partially exempt under the Clean Truck Program, and marine container terminal operators are required to collect the $35 fee. According to the Port of Los Angeles, emissions have dropped by as much as 70 percent as a result of the Clean Truck Program.

Traffic Mitigation Fee

In 2005, as part of ongoing efforts to address traffic congestion, security, and pollution at the ports of Los Angeles and Long Beach, marine operators formed PierPass, a not-for-profit company. To facilitate cargo movement during off-peak hours when these ports were less congested, additional night and weekend shifts were added at both ports. Consequently, the Traffic Mitigation Fee (TMF) was implemented to help cover the costs for the additional night and Saturday marine terminal shifts created by the PierPass OffPeak Program. The TMF is charged for non‐exempt containers that move through the port during peak hours (Monday – Friday, 3:00am to 6:00pm) and acts as a financial incentive to move cargo during less‐congested times.

Driver Wait Time

Typically, one hour of wait time or free time is allowed by the trucking company to accommodate the loading or unloading of freight. However, the Department of Transportation -- Federal Motor Safety Administration (FMSA) --implemented new regulations which limit the total amount of on-duty time for drivers. These changes impact the amount of free time that a trucking company will allow for loading or unloading of freight. Understandably, trucking companies must recoup lost revenues that result from longer wait periods. 

The trucking element of your door delivery can have a tremendous impact on your logistics supply chain. Our Smart Logistics expertise can pay out in huge dividends and ensure that your goods travel the final mile without interruption.

If you would like more information on this subject matter, please inquire about our services here.

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