What Is A TONU Charge — and 3 Ways to Avoid Truck Order Not Used Fees

A little planning, clear communication, and some project management help can go a long way in helping you avoid TONU fees.

Summary:

You can plan everything out perfectly, but sometimes, things don’t go as planned — especially with High Stakes Freight® shipments. In this guide, we’re going to examine TONU fees, what they cover, and, most importantly, what you can do to avoid them.

What is a TONU fee

TONU — an acronym that stands for ‘Truck Order Not Used’ — is a standard term used in transportation logistics for a last-minute cancellation fee. TONU charges are designed to compensate the carrier for the lost time and potential revenue resulting from miscommunication or a change in plans. Unfortunately, this seemingly innocuous fee can significantly impact the bottom line if not managed properly.

Are TONU fees only for cancellations

There are a number of circumstances that can trigger a TONU fee, including:

• A last-minute shipment cancellation
• The load is not ready for transport
• Construction site delays
• Unforeseen manufacturing delays
• The wrong kind of transportation was requested

Usually, TONU fees refer to orders that are completely canceled, though. If you’re having delay issues like layovers or detentions, there are separate fees for those. Some transportation companies charge an hourly fee for layovers and detentions, and some charge a flat or daily fee, depending on the delay.

Layover fee: A fee for when the driver gets delayed by the shipper or receiver by 1-2 days

Detention fee: A fee for when the driver is delayed at the pick-up or delivery location for longer than the agreed Bill of Lading grace period 

Why transportation companies charge a TONU fee

A TONU fee is just as frustrating for the carrier as it is for you. But, this fee is in place to help carriers recoup some of the losses their business faces from a canceled load. Trailers are always scheduled to be moving. So when a transportation company has an idle truck, they’re losing money.

Oftentimes by the time a job is called off, time and resources have already been dedicated to pick up the load. Worse, sometimes the driver is already on the road or already waiting at the pick-up location when the cancellation comes in. 

How to avoid a TONU fee

Delays in the pipeline and full-out cancellations are an unfortunate part of the High Stakes Freight® and transportation business. However, there are a few tips to keep in mind to hopefully avoid them. 

Optimize Scheduling and Planning.

Proactive scheduling and planning play a pivotal role in avoiding TONU charges. Shippers must accurately forecast their shipping needs and provide carriers with reliable schedules. Carriers, in turn, should meticulously plan their routes, taking into account potential delays, traffic conditions, and other variables that could impact timely pickups.Utilizing advanced route optimization software can help carriers streamline their operations, ensuring that trucks are dispatched efficiently and arrive at the pickup location on time. Additionally, logistics partners can implement dynamic scheduling solutions that adapt to real-time changes, reducing the risk of cancellations and delays that might trigger TONU charges.

Keep communication channels open.

One of the primary reasons TONU charges occur is due to communication breakdowns between shippers and carriers. Establishing clear and efficient communication channels with everyone, from your logistics partner to your shipper and receiver, is crucial to avoid misunderstandings that can lead to canceled or delayed orders.

Additionally, creating standardized procedures for order confirmation and changes can help minimize the risk of TONU charges. Shippers should provide accurate and timely information about load availability, pickup locations, and any potential delays. Similarly, carriers should promptly communicate any issues or changes in plans that might affect their ability to pick up a load as scheduled.

By fostering a culture of transparency and collaboration, shippers and carriers can reduce the likelihood of TONU charges and create a more resilient and efficient supply chain.

Set clear expectations.

When you’re working with a trusted transportation partner, they’ll be upfront about their TONU policies. But, don’t hesitate to ask questions or for any clarity so that you can ensure there aren’t any conflicts regarding timelines, conditions, rates or payments. Setting clear expectations up front helps keep everything calmer and more clear during a potentially tough situation if you have to cancel. 

A TONU fee’s average cost

A TONU fee typically runs between $150 to $300 per truck, averaging around a standard rate of $250 across the industry. Your logistics partner usually negotiates the TONU directly with the trucker and dispatcher, it is always set ahead of time in your terms of agreement contract so you know what to expect. You can also expect to be charged for this right after you cancel, or within the timeframe that the intended pickup was supposed to originally happen. 

A real-life example of a TONU charge

Let’s say a modular builder requests a pickup for a Wednesday morning in June. A customer, who has worked with their trusted transportation company before, got in touch with the transport team a few months before the move, telling the company about the project and the timeline. 

On the morning of the pick up, and already at their staging yard with the trailers, the transportation company gets a call from the shipper saying there were major delays at the construction site and they need to cancel the pick-up. 

The agreement says that cancellations must be made within 24 hours before pick-up or delivery. 

If the client had called and communicated with the people on site earlier to confirm plans for the following day, there is the possibility that the cancellation could have fallen within the 24-hour notice period outlined in the policy. But, they didn’t check in the day before, and that morning they got the bad news that the site just wasn’t ready for the shipment. Unfortunately, they had to pay a TONU fee, and the transportation company lost time sending their truck out that morning.

Pro Tip: Hire a construction logistics project manager

Connect with a professionals in construction logistics project management to ensure that situations like this don’t occur. From site visits to constant updates and clear communication, a logistics partner will help everything run as smoothly as possible, meaning you don’t incur avoidable fees like the TONU charge.

Read more:

• Expert Insight: Project Management Software for the Modular & Offsite Construction Industry
• Logistics Project Management MSG Sphere Las Vegas, NV
• What Is a Freight Transit Buffer and Why Do You Need It?

Stream Logistics is a transportation logistics company specializing exclusively in High Stakes Freight® , or freight where there is significant risk in moving your product. We help you transport freight when there are projects with timelines and delivery sequences, shipments with high complexity, and shipments with unique constraints.