Capacity shortage forces retailers to penalize late deliveries

 (Photo: Shutterstock)
(Photo: Shutterstock)

Kroger Company has become the most recent retailer to impose fees on late deliveries in a further sign of tightening US freight capacity. The company will charge an accessorial fee of $500 for deliveries that arrive more that 2 days late.

This move follows Wal-Mart’s similar mandate this past summer when it began to enforce a policy of charging suppliers for late deliveries.

Kroger claims that it loses ten percent of sales due to items that are out of stock because of late delivery, spoilage, and other factors that are caused by inefficiencies in the supply chain. The company says it cannot afford this unnecessary expense, especially at a time when online competition is squeezing margins.

The new resurgence in passing along some of the liability for lost revenue to shippers in the form of assessorial fees could provide an impetus for the implementation of new  technologies across the supply chain for agricultural producers and carriers.

One example is blockchain technology which will provide transparency in supply chains for purposes of tracking shipments. Smart contracts will lay out the agreements between shippers, carriers, intermediaries, and customers by instantaneously assessing chargebacks and post-charges, settling payments, and keeping tabs on freight ownership.

Another spin on the issue could be on-time freight insurance. As FreightWaves reported earlier this year, European insurance giant AXA has begun to offer insurance policies that protect supply chain participants against late-arriving cargo flights. So far no companies offer this product in the US but it certainly is possible that this model could be utilized in the trucking freight industry in the US.

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One Comment

  1. You obviously don’t think things through or you don’t know truck drivers. Now your capacity is going to be even shorter and the only drivers your going to get are the bottom feeders that will take anything. Should have tried raising your rates. You all just keep coming up with scams to cheat drivers out of money and then wonder why there are not enough good drivers. How stupid can you get? Never mind, your well on your way to answering that question already!

  2. Charlie
    You forgot to add. That it takes them in most cases, 4 hours to unload the truck with no pay.
    Plus the Lumper ( forklift driver) fees they charge the driver( truck) to for unloading their product.

  3. They know a market correction is coming not to their benefit, but for their loss(ELD’s). They know ELD’s will hurt their suply chain. ELD’s will limit the delivery of a load. They want to penalize drivers to cover their loss. Not too many drivers are willing to deliver to these places in the crack of dawn. It will only get worse.

  4. Pure ignorance of these grocer/ retailer chains. Hold you hostage in their docks for hours no detention. Have to pay lumpers for them to unload the truck when this should be worked out between shippers and consigned not the trucking co. A gate fee at places to even get on the property (absurd). I just think to myself of all the times getting off loaded at these places I hear the excuses of shorthanded, short forklifts after 5 hours, bad weather, breakdowns, it’s a no win situation for truckers. Yea and try to collect a check for detention……….. Yea ain’t happening! So when these big box stores do this arrogant stuff, I don’t book loads that go into these places. Hopefully their rates will rise and they will figure it out but I’m sure never will. Been at it for 25 years and still no change……

  5. Yeah, they don’t mention how long they keep a driver in the door. I have been in a door at Kroger Arizona for more than 6 hours. MAYBE, we will start charging them $500 an hour after the first hour. See how they like that.

  6. These drivers are correct.wal mart .kroger.heb.many can arrive 1 to 2 hrs early.wait 1 to 3 hrs to get a door.then be at the door for 3 to 4 get unloaded. They Want to whine about a few trucks being late.need to worry about the ones you have waiting.

  7. A company that has absolutely no regard for carriers wasting thousands of hours to get unloaded at their facilities, wants to penalize carriers?

    Kroger could vanish tomorrow and the trucking industry wouldn’t even have a hiccup, this new rule will only hurt Kroger when carriers refuse to accept Kroger loads.