Have you ever been in a situation when you or your customer’s freight has been held hostage? Freight Hostage load scenario is stressful and unpleasant for all the parties involved, and the resolution might be very time- and energy-consuming.
Why do carriers hold freight hostage?
The practice of “holding freight hostage” or “holding goods hostage” occurs under either one of two related scenarios. The most likely scenario occurs when a carrier refuses to deliver a shipper’s goods in the carrier’s possession while en route to a delivery until such shipper pays the carrier for a past due transportation debt.
The second scenario occurs when a third party logistics broker (“3PL“) requests a carrier to hold goods hostage because the 3PL has not been paid by the shipper for past due amounts.
A carrier might be looking for guarantee of the payment before they release the load:
- Previous payment history
- Destination change
- Significant changes in load details
- Potential claim
What can you do to prevent this?
- Communicate and notify carriers of possible changes
- Know your lanes, facilities and common issues
- 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
Resolution For Holding Freight Hostage
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. 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.