Shipments don’t always go as they should, and your logistics costs can rise. When you have to cancel a pickup or delivery, you need to know the consequences and how to deal with them.

Let’s face it, sometimes stuff happens. Extra fees such as TONU charges can undermine your profitability. In this article, we’ll look at why the charge occurs and what you can do to avoid it.

What is TONU in Logistics?

TONU, an acronym that stands for “Truck Order Not Used”, is a standard logistics term used to describe a last-minute cancellation fee. In the transportation industry, not every delivery or pickup goes according to plan. Circumstances can change and a customer may decide to cancel a prearranged, agreed to appointment.

Although we don’t like having to pay extra fees of any kind, the TONU fee helps balance the scales of time and effort.

 

 

Why Do Companies Charge a TONU Fee?

The TONU fee exists to help carriers recoup some of their losses. As the old saying goes, “If the wheels aren’t turning, the truck isn’t earning.”. From a transportation company’s point of view, trailers and trucks should always be moving. In other words, the time they sit idle is lost potential income.

The trucking industry is massive, and with so many vehicles on the road handling shipments every day, you can bet there are going to be instances where TONU comes into play. According to one of North Americas leading trucking associations:

10.93 billion tons of freight (primary shipments only) was transported by trucks in 2021, representing 72.2% of total domestic tonnage shipped.

Source: Trucking.org

For carriers, having to charge a TONU fee on top of having their time wasted is in itself very frustrating. It takes time and effort to plan a route and prepare a truck for a pending order. In worse case scenarios, a driver can already be on the road or waiting at the pick-up location when they receive a cancellation notification.

What Causes a Truck Order Not Used Charge?

The trucking industry is massive. With so many vehicles on the road handling shipments every day, you can bet there are going to be instances where TONU comes into play. According to one of North Americas leading trucking associations:

10.93 billion tons of freight (primary shipments only) was transported by trucks in 2021, representing 72.2% of total domestic tonnage shipped.

Source: Trucking.org

Since we depend on the trucking and logistics industries to move so much on a constant basis, there are a wide variety of reasons that can trigger a TONU fee. Some of these include:

• Supply chain delays
• Last-minute shipment cancellations
• A load is not ready for pickup
• Construction site delays
• Inappropriate transportation ordered
• Incorrect pickup time entries
• Unexpected manufacturing delays
• General human error

Most of us like to think our plans will roll out like clockwork, but as you can see, the future is not always predictable.

Examples of Truck Ordered Not Used

Let’s say a request is put in for a trucker to deliver a twenty foot shipping container, but at the last minute the order is changed to a forty foot shipping container. If the change is made outside of the agreed timeline limits, which can be anywhere from 4 to 24 hours, this may result in a Truck Ordered Not Used charge.

Another instance could involve a carrier scheduled to pick up a load at an agreed day and time, but the manufacturer discovers an error in product spec at the last minute and has to rework the shipment. Because the manufacturer has no choice but to cancel the expected pickup until the order is corrected, a TONU fee is charged.

How Much is a Typical TONU Charge?

The amount of a TONU charge can be related to the size of the vehicle ordered or the transportation company’s policies – or a combination of both. Typical TONU charges start at about $150.00 (USD) for a dry van, box truck or prime mover. With refrigerated (reefer) shipments or special equipment containers, the charge can escalate to about $300.00.

On average, the industry standard Truck Order Not Used fee is rated at $250 (USD). An experienced logistics partner understands the need to anticipate shipping issues and will negotiate the TONU charge ahead of time with the trucker and dispatcher as a contingency. When the instance arises, the TONU charge will be invoiced as soon as the official cancellation is received.

Is TONU Just for Cancellation Only?

In a word, yes. A TONU fee is specifically related to an order that’s completely cancelled. Other accessorial shipping penalties such as layovers and detentions have their own separate fee structures. Some transportation companies will charge by the hour whereas others charge a flat or daily fee depending on the nature of the delay.

For instance, a Layover Fee can be charged when the driver gets delayed by the shipper or receiver by 1 or 2 days. A Detention Fee can be incurred if a driver is delayed at the point of pick-up or delivery for longer than the allowed by the Bill of Lading grace period.

How are TONU Charges Collected or Paid?

In the event of a TONU charge, there has to be proof of a breach of agreement. The trucker can verify a charge by showing a record of the time the booking was made, trip confirmation, arrival at the requested location if applicable and lastly, cancellation the arrangement by the customer.

The trucking company will then generate a TONU fee invoice to the customer or the freight forwarder based on the trucking arrangement. If there is a third party involved, such as a freight forwarder, logistics company or freight broker, the truck may opt to charge the third party directly depending on the agreement.

Generally speaking, the party that scheduled the service or arranged a service agreement with the trucking company will be liable to pay under the terms and conditions laid out.

For freight forwarders, it’s common practice to pass TONU charges along to the customer in the event of a cancellation or last minute change to the pickup/delivery agreement.

How to Avoid TONU Charges

As mentioned, sometimes things are just out of your control. However, there are a few things you can keep in mind to help avoid TONU charges:

1. Know Your Contract: You should have a solid understanding of the details of your shipping contract. You can also expect to incur TONU charges at some point so it’s a good idea to be familiar with the specific conditions that trigger the charge, how much it’s going to cost you and how it gets paid.
2. Communicate: Maintaining open lines of communication is key to avoiding a TONU charges and ensuring successful pickup and delivery executions. Should a problem arise or your plans change, communicate with the trucking company immediately to see if the situation can be resolved without penalty.
3. Set Expectations: Although it’s difficult to anticipate all scenarios, it’s great practice to discuss how timelines, conditions, rates and payments are to be treated by your transportation provider in the real world should the need arise. Once again, an experienced logistics partner will be up front about policies and be glad to answer any questions you may have.
4. Plan Ahead: Good planning starts with good organization. Make sure everyone on your team is familiar with the details of your shipping and transportation schedule ahead of time. It’s also a good idea to have a contingency plan in place so your team knows how to deal with shipping cancellations effectively.