All information you’re looking for about bobtail fee is right here.
So, if you want to learn more about bobtail fee, read this guide.
- What is a Bobtail in Shipping Terms?
- What is a Bobtail Fee?
- Is Bobtail the same as Live Unload?
- When Should You Consider ‘Live Unload?
- When should you Consider a Bobtail?
- How Much is a Bobtail Fee?
- Why Does a Bobtail Fee Occur?
- How do Trucking Companies Assess Bobtail Fees?
- Does Bobtail Fee Increase with Time?
- Is Bobtail Fee Applicable to LCL Shipments?
- Who Charges Bobtail Fee?
- Can you Avoid Bobtail Fee? How?
- Is Bobtail Fee Negotiable?
- What Happens when Goods get Lost or Damaged in Bobtail?
- Does Bobtail Fee Cover the Cost of Non-Trucking Liability Insurance?
- What is Bobtail Insurance?
- Who Covers Bobtail Insurance during shipping?
- Does Bobtail Fee Include Loading/Unloading Costs?
- Does the Bobtail Fee Cover Warehousing Costs?
- Does Shipping Cost Include Fobtail fee?
- What Happens if you Fail to Pay Bobtail Fees?
- Is Bobtail Fee Inclusive of the Cost of Picking up the Empty Container after Unloading?
- Is Drop-and-Pick Fee the same as Bobtail fee?
- Which Factors Affect Bobtail Fees?
- How Can you Reduce your Bobtail Fees?
- What is Chassis Fee?
- Is Chassis Fee the same as Bobtail Fee?
- Can a Reliable Freight Forwarder help you Reduce or Avoid Bobtail Fees?
- What is a Drop-and-Pick in Shipping?
- How do you Pay Bobtail Fees?
What is a Bobtail in Shipping Terms?
Let’s first understand what a bobtail is.
It is simply a truck that travels without a trailer.
It is called a bobtail because the tractor drives around without its tail which is usually 24 feet.
Bobtail trucks are considered cargo-free; they don’t generate any income for the owner.
Bobtail in shipping
Bobtailing may occur because of the following reasons:
i. When the truck driver moves from the terminal to the warehouse to pick up a loaded trailer.
ii. When he/she travels back to the end-stage after dropping off the trailer containing cargo.
However, truckers don’t like bobtailing for some reasons like:
i. It’s dangerous and prone to accidents. The truck stability and braking level are not equivalent.
ii. They don’t earn cash from it but they have to fuel the trucks.
iii. It’s more or less a seasonal thing because it’s highly affected by the weather such as rain or snow.
What is a Bobtail Fee?
Bobtail Fee is also Referred to as a Drop Fee.
This is a fee charged by a tracker to drop off an FCL (Full Container Load) at a warehouse and pick it up once it has been unloaded.
The driver is contacted to pick up the empty container after unpacking has been done.
This may take up to 48 hours.
The amount charged by the driver reflects on your invoice or Flex port quote as a drop fee.
The chassis fee also appears on the invoice.
Is Bobtail the same as Live Unload?
Not really. They are different however most people interchange the two trucking terms.
As mentioned above, in bobtailing, the driver simply drops the cargo at the warehouse, leaves then come back to pick the container later.
Whereas in live unload, as the term suggests, it’s live.
Meaning there must be actual people during the loading and offloading to witness the process.
The truck driver doesn’t leave the warehouse when unloading is taking place.
Instead, they wait for the workers at the receiving dock to unpack the trailer then he/she leaves with the empty container.
The driver has to book an appointment of the exact time they want live unload to be done.
This process may take 1-2 hours. Usually, drivers consider 1-2 hours’ free wait as they wait for the cargo to be unpacked.
Once the two hours’ elapse, they start charging any additional time in hours.
Some drivers charge $75 per hour.
This wait time reflects on your invoice or Flex port quote as a Trucking wait fee.
The longer they take to unload the goods the more the trucking fee.
Loading a shipment may be done after some time or immediately.
It depends on the situation.
The main difference between these two terms is;
in bobtailing the driver doesn’t wait for the container to be unloaded while in live unload they wait for the container to be unpacked.
When Should You Consider ‘Live Unload’?
Live unload may be a great shipping method.
However, ensure you liaise with your driver early in advance.
Consider live unload:
i. If the goods being unloaded are perishable hence they need to be unpacked before going bad.
ii. If the companies have a lower shipment.
iii. If the cargo you are unloading will take a maximum of two hours.
iv. Bear in mind any time above the two hours is charged a fee.
v. If the goods are palletized (being transported on a pallet) and the warehouse has a forklift. They can help you unload the cargo within the given time frame.
vi. If the goods are fragile and they are not in large quantity.
vii. Therefore, the driver needs to watch as they unload to ensure they handle them with care.
viii. Love unload can be a good option where the parking space is limited.
When should you Consider a Bobtail?
Bobtailing may be a great shipping option:
i. If your cargo cannot be unloaded immediately after arriving at the terminal.
ii. If the goods cannot be unloaded quickly. Meaning if it to be done immediately, it would take more than two hours hence increasing the trucking wait fee.
iii. If the warehouse does not have enough manpower to unload the cargo faster.
iv. If the warehouse is already congested, hence they may need to clear the cargo they have in stock before unloading the ones you have brought.
v. If the cargo contains loose loaded cartons which may take long to unpack.
vi. If the goods are fragile need to be handled with care.
vii. In the process of handling with care, they may take a really long time.
How Much is a Bobtail Fee?
Bobtail fee is charged according to the goods you are shipping.
Usually, the fee is half your shipment.
Meaning you may incur a higher cost if your goods are in large volume and a small amount if the volume is less.
Why Does a Bobtail Fee Occur?
Well, in shipping, containers are mostly delivered either via drop and pick, live unload or drop off.
Drop and pick, the driver drops off the cargo at a warehouse, picks an empty container, and leaves.
Live unload the truck driver gives a specific time for unloading to take place.
If the goods cannot be unloaded immediately or within the given time, the shipper may choose to drop off method.
This way the shipper may save on cost while the trucker saves on time.
It’s a win-win for both of them.
In bobtailing, the trucker drops the cargo, leaves the warehouse then comes back after 48 hours to pick the container.
This may require him/her to make an extra trip to the warehouse hence the rise of drop fee.
How do Trucking Companies Assess Bobtail Fees?
Some of these trucking companies offer shipping and handling services while others have hired their truckers.
If a customer chooses to work with a trucking company, money is paid to the company directly.
The driver is then given an amount they have agreed on.
Knowledge of costs you may incur is fundamental in any business.
Understanding the cost structure helps trucking companies know the cost per mile hence they can charge their shippers.
Trucking helps them know the profit they will eventually make.
They calculate their cost per mile by deducting expenses like fixed cost, variable, and salaries.
Poor bookkeeping can mess up your business.
Does Bobtail Fee Increase with Time?
Every business has a peak and off-peak season.
Equally, in international trade, there are seasons where the goods you are importing or exporting are in high demand and some, where the order is low.
It’s affected by what you are selling and in what season.
Variation in bobtail fee reflects the nature of supply and demand.
Truckers normally take advantage of such seasons.
When the demand for goods is high in some months, they charge a higher fee because they have a lot of work from different customers.
When the season is slow, they charge a lower fee due to the scarcity of jobs.
As a trader, understanding demand peaks can help you in your business.
Is Bobtail Fee Applicable to LCL Shipments?
Bobtail fee doesn’t apply to LCL (Less Container Load).
As the name suggests, this fee is only associated with FCL.
LCL cargo is charged by calculating the volume of the goods.
If you are shipping goods that don’t fill the entire container, instead of transporting partially empty containers, consolidate your goods in one container.
Of course, it depends on the nature of goods.
It will save you time and money.
Who Charges Bobtail Fee?
Bobtail fee is charged by the trucker who you have entrusted to drop off your FCL container at a warehouse and pick it up once it has been unloaded.
Can you Avoid Bobtail Fee? How?
Am sure any route or means you can use to avoid paying fees is music to your ears.
Luckily you can avoid a bobtail fee.
Here is the catch, once the trucker deposits FCL cargo at a warehouse, then leaves empty, you will be charged a bobtail fee.
To avoid the fee, the truck driver should drop off the trailer, hook up with an empty container, before leaving the warehouse.
This way the trucker may not make several trips to the terminal hence he/she may keep away from the bobtail fee.
In other words, you will go for the drop and pick method instead of bobtailing.
This is very common in drayage shipment.
Is Bobtail Fee Negotiable?
Negotiation is an in-thing in business; everyone is trying to save their coins.
It has even forced sellers to set a higher price to allow a bargaining window for their customers/clients.
In most businesses, once you come in contact with the service provider, it’s possible to negotiate.
You can settle for a price that is fair to both you and your trucker.
However, they usually have a flat fee they can’t go beyond.
It is easier to bargain if you are shipping volumes of goods regularly using the same trucker.
But if it’s only one offload, it might be hard to negotiate in fact, they may charge you twice the freight rate.
Note prices vary depending on the trucker you are dealing with.
Some may charge a flat fee; others charge doubles your shipment while others don’t charge you an extra fee.
If the terminal is in the delivery location or just a few miles from the port.
Do your research to see who suits you best.
What Happens when Goods get Lost or Damaged in Bobtail?
Truly, we live in an imperfect world. No shipping method will guarantee 100% safety of your cargo.
Especially goods that pass through long routes or need more handling due to liability issues are prone to either loss or damage.
label to avoid damaged goods
Loss and damage are common in e-commerce and international trade.
In case it happens. Here’s how to go about the process.
i. First thing first, check your luggage thoroughly before signing the Bill of Landing
ii. Report to your carrier immediately; preferably within 3 days either via phone, email, or social media.
iii. Back up your claim with receipts containing the value of lost items. In case the goods are damaged, take a photo and send it as well.
iv. Your claim will be inspected to reveal when exactly the incident happened whether during transit or delivery.
v. Once they confirmed when it happened, they will send you an email if it’s during delivery.
vi. If it was during transit, a claim form will be sent.
vii. The carrier will pursue the claim using your insurance and keep you updated on every step they make.
viii. The process may take 28-30 days.
ix. Once everything is sorted, you will be refunded the amount equivalent to your goods. However, the insurance will deduct 10% (fixed) of the amount for the claim processing fee.
Does Bobtail Fee Cover the Cost of Non-Trucking Liability Insurance?
Bobtail fee doesn’t cover the cost of non-trucking liability insurance.
What is non-trucking liability insurance?
It is a liability that provides coverage when you use a truck for personal activities such as picking kids from school or going for groceries.
Basically, you need it if you are driving the truck for non-business purposes.
Like any other job, truck drivers have off days.
Interestingly, you may find them still moving around with big trucks.
Don’t blame them they got used to them.
Non-trucking liability insurance protects them from liabilities they may incur in the process of doing their businesses.
You may need insurance:
i. If you are driving a truck for non-business purposes
ii. If your motor carrier requires the insurance in a written agreement i.e. lease
iii. If you want to avoid high liability expenses in case of an accident.
Non-trucking liability insurance doesn’t cover goods you are transporting.
It only caters for damage or injury to a third party or business.
It may include the cost of repair of replacement or medical expenses
Some companies are kind enough to offer coverage for trips home after making deliveries.
It is not as wide as other trucking insurance policies hence it’s not costly.
Insurance companies calculate premiums by checking your driving history, no of times you have used the truck for personal use, and limit requests.
non trucking liability insurance
What is Bobtail Insurance?
Bobtail insurance is liability insurance that provides protection when you drive a truck without a trailer.
Do I really need bobtail insurance?
You may ask.
Yes, you need it irrespective of the times you drive your truck.
whether you drive under someone else’s trucking authority or if the trucker’s liability insurance that you have protects you while under shipment.
You only need bobtail insurance if the truck you are driving is under someone else’s trucking without a trailer attached to the truck.
For example; a truck driver drops off goods at warehouse A then moves to point B without the trailer.
Bobtail insurance may provide coverage between the two points just in case something like an accident occurs.
Realistically, this bobtail insurance provides a wider coverage as compared to non-trucking liability insurance.
Who Covers Bobtail Insurance during shipping?
The policyholder covers bobtail insurance.
This policy only takes care of liabilities.
It only covers you if involved in an accident while driving a truck bearing another person’s trucking authority with no trailer.
It covers you if you get into an accident while on your way to pick cargo, after dropping a load as you go to pick up more goods, or after you are done with the trips.
Bobtail insurance doesn’t cover driver injuries, damage to your property whether by accident, natural disaster, or even loss of income.
It only covers; Third-party property damage, legal costs, medical bills, and settlement expenses.
The cost of insurance is affected by various factors like;
limits requested, the number of times the truck is used without the trailer, driving history, annual receipts, experience in the industry, number of trucks you own or operate, etc.
The average rates are $35-$60 per month for a million-dollar coverage.
While obtaining insurance, all you need to do is know what you want, collect the information needed, way the options you have then purchase it.
However, the insurance policy may vary from one company to another.
Liaise with cover wallet advisors to help you access companies with the best rates.
Does Bobtail Fee Include Loading/Unloading Costs?
Sadly, it doesn’t.
A bobtail fee only covers for transportation of cargo from the port to the warehouse.
For loading and offloading, you have to pay an extra cost to hire a professional who can assist you in the activity.
Bear in mind the given time is normally 2 hours.
If your team takes longer, you may be charged extra container loading/unloading time.
Choose a team that may save you time and money.
If you want your trucker to unload goods you will pay for the delivery labor fee.
Does the Bobtail Fee Cover Warehousing Costs?
Sure it does.
Once the driver drops cargo and leaves, the appointed team unloads the cargo and provides free time storage for 48 hours.
If the driver takes longer than 48 hours to go for the empty container, you will be charged a demurrage fee.
The demurrage fee is calculated per day; the longer the container stays the more you pay.
warehousing in bobtail shipping
Does Shipping Cost Include Fobtail fee?
No, it doesn’t.
The shipping cost only covers for transportation of cargo from the country you are importing from to your county’s port.
You incur other charges depending on the means of transport you will use from the port to the warehouse.
If you choose to use a trailer, you will pay a bobtail fee.
Fobtail in shipping
What Happens if you Fail to Pay Bobtail Fees?
Every decision has consequences.
If you don’t pay for your bobtail fee as agreed with your carrier, you may be charged for a per-diem (Latin) or per day fee irrespective of your call date.
You may only be considered if you had prior arrangements.
Per-diem charges maybe $50-$100 per day.
Moreover, it may vary from one port to and carrier to another
Is Bobtail Fee Inclusive of the Cost of Picking up the Empty Container after Unloading?
Once you have paid a bobtail fee to the trucker, it’s inclusive of dropping off cargo and picking the empty container.
You don’t have to pay an extra fee.
drop and pick in shipping
Is Drop-and-Pick Fee the same as Bobtail fee?
No, they are not the same.
Drop and pick fee occurs when you deposit your goods at the warehouse and hook up with an empty container.
It is therefore less than a bobtail fee.
It has offers sometimes. Belgium for example has a 50% discount on drop and hook done at night or early in the morning.
Bobtail fee on the other hand is a bit costly because the trucker has to visit the warehouse twice.
Which Factors Affect Bobtail Fees?
Bobtail fee is influenced by the following factors;
i. Seasons- there are pick and off-peak seasons.
ii. You will pay a much higher fee if you ship goods during peak seasons as compared to off-peak.
Similarly, drivers charge lesser fees at night and early in the morning because they are not as busy as they are during the day.
iii. Distance- the longer the distance from the port to the warehouse the more the bobtail fee.
iv. The kind of trucker you choose will affect the bobtail fee since the fee varies from one trucker to another.
v. If it’s your first time shipping and you are not familiar with the field, truckers may take advantage and con you.
vii. If you are shipping fewer goods often instead of more goods less times you may pay a more bobtail fee.
How Can you Reduce your Bobtail Fees?
The following ways can help you reduce your bobtail fee:
i. Look for a trucker that suits your budget.
ii. Ensure you have all documentation and logistics needed by the trucking company.
iii. Don’t be too strict to the carriers, allow them to be open-minded with the way they load and offload goods. You may get good rates.
iv. Pre-clear all your cargo and give delivery instructions to your trucker.
v. Send your cargo to the port early in advance to give the trucking company ample time to schedule pick and delivery.
vi. Ensure the loading and offloading team are ready to take action once the container arrives to save on the driver’s time.
vii. If you are dealing with a large volume of goods, hire a logistics company to assist with the fee.
viii. Ship during off-peak seasons and allow at night pick-ups
ix. Develop a good relationship with your trucker.
x. Ship more goods less often.
xi. Look for carriers that are located near your ship point.
What is Chassis Fee?
Chassis fee is charged on ocean containers that are carried by truck.
Meaning if your cargo gets to the seaport then it’s meant to be transported to the warehouse via truck, you will pay for this fee.
Is Chassis Fee the same as Bobtail Fee?
They are different however there is a thin line between the two fees.
Both are charged according to the container capacity.
FCL has a fixed rate while LCL is charged according to the volume of the cargo.
Both of them are attached to the trucker.
However, the chassis fee is paid to ocean carriers at the port while a bobtail fee is paid to the trucker.
Chassis fee is meant to encourage the trucker and shipper to use their own chassis for pickup and deliver ocean containers.
Hence it can be avoided just like the bobtail fee.
Can a Reliable Freight Forwarder help you Reduce or Avoid Bobtail Fees?
A freight forwarder can be a great investment in your business.
‘Experience is the best teacher,’ they say.
They have been in this business longer than you.
Hence they know all the tricks, dos, and don’ts.
They can hook you up with carriers who have the best rates.
Similarly, they can show you the best way to avoid paying a bobtail fee other than drop and pick (if any).
What is a Drop-and-Pick in Shipping?
In case you have come across the term drop and hook, don’t get confused.
It’s the same as drop and pick.
Drop and pick means the truck driver drops off the container with cargo at the warehouse.
It is then picked up a different empty container from the same warehouse, for the next delivery.
They don’t wait.
Trailers are loaded or unloaded before the truck driver gets to the warehouse.
In some companies, trailers being dropped are picked at a different facility.
It’s a fast and effective shipping method; the driver doesn’t have to wait or make several trips to and from the warehouse.
Nonetheless, it can only happen if you have containers coming in the warehouse quite often, or if your company receives a high volume of deliveries.
It’s worth noting that drop and pick doesn’t happen instant; as it may sound.
Sometimes drivers may wait for even 48 hours before receiving an empty container from a company that has unloaded their cargo.
Drivers may receive incorrect trailer numbers; the trailer may be located at the wrong place or sometimes the trailer you need may be behind other trailers .
Therefore, you have to wait for the yard dog to remove the ones in front for you to access yours.
Additionally, the trailers available may not beat the same weight you wanted as a result you may end up issuing an incomplete delivery thus frustrating your customer.
Freight forwarder in shipping
How do you Pay Bobtail Fees?
This may depend on whether you deal with a trucker directly or a trucking company that offers to ship and handling services.
Whichever you decide to use, ensure you work with them hand in hand providing necessary information.
This includes a call date to pick empty container from the warehouse back to the terminal.
Once you agree on the price, terms, and conditions, you can go ahead and pay for the bobtail fee.
That’s it – all information you need to know about bobtail fee.
In case you have any question, feel free to contact BanSar.