Delivery Labor Fee

Delivery Labor Fee: The Ultimate FAQ Guide

This guide covers everything you need to know about delivery labor fee.

So, if you want to learn more about delivery labor fee, read this guide.

What is Delivery Labor Fee in Logistics?

Delivery labor

 Delivery labor

A delivery labor fee is a destination charge. It appears when the trucker helps to unload cargo at your warehouse or distribution center.

Note that this charge is applicable when the trucker spends 20 minutes or more unloading your goods from the truck.

How is Delivery Labor beneficial during shipping?

Delivery labor, while not so popular, provides several benefits:

  • You save a lot on labor when you use truckers to help unload cargo at destination
  • Accurate and faster unloading because of the additional help
  • You avoid detention, trucking wait fees, and other surcharges that may accrue because of delayed unloading
  • It helps you distribute products faster thanks to on-time delivery, unloading, and packing
  • Delivery labor allows you to return the empty shipping container to the port on time, avoiding the extra drop fees. This also reduces the chassis use days that may cause more charges on your invoice.
  • Most truckers have experience in cargo unloading. Hence, they will ensure the safety of goods while moving them from the truck to the warehouse or distribution facility.
  • It minimizes theft and loss of cargo. The chances of the truck driver stealing your goods are minimal than when you hire third-party laborers for the live unload.

Is Delivery Labor the same as Unloading?

In a way, yes!

Delivery labor is the help provided by trucking drivers in moving cargo from the truck to your facility at your destination.

Unloading is the same thing only that with this, it can happen anywhere. Unloading can occur at the port, at the customer’s premise, or the freight forwarder’s warehousing facility. Unloading is a generic term that describes the action of removing cargo from a ship, a truck, or a container.

Why do Trucking Companies charge Delivery Labor Fee?

In logistics, any cost that isn’t a simple per-mile transportation charge is quoted as an accessorial charge.

Truckers are often called upon to perform services other than just transporting cargo. Truckers may have to unload the cargo. This service, note, isn’t included in the per-mile shipping rate charge.

It would be unfair for a trucking company to charge the fees for unloading as part of the per-mile rate. This is because not all customers may need this additional service.

Cargo unloading and other extra services come at unique costs. Hence, it would be quite difficult to average out the cost without overcharging customers who only need simple shipment services.

To put it simply, logistics companies charge delivery labor fees because it is the only fair way to charge a customer for the unloading services. The same applies to other accessorial charges in shipping.

Who pays the Delivery Labor Fee in Shipping?

The shipper pays the delivery labor fee in shipping.

Here, the shipper can be the buyer/importer, freight forwarder, or customs broker.

How much is the typical Delivery Labor Charge?

The standard delivery labor charges vary depending on the trucking company you’re using as well as the type and volume of goods you’re transporting.

Note however that truckers charge a standard fee for the first few minutes. Extra hours are charged on a per hour basis.

Is Delivery Labor Fees applicable to all shipments?

Yes, delivery labor fees apply to all shipments as long as one trucker can handle them. It applies to freight that requires a lift gate, or for any freight that is palletized, skidded, or unitized.

A shipper may hire third-party off-loaders to offload the truck.

In this case, you won’t require the help of the trucker/driver to offload, and then delivery labor fees are not applicable.

What is the difference between Delivery Labor Fees and Demurrage Fees?

Dumurrage

Demurrage

Delivery labor fees comprise payments to the driver for unloading cargo at delivery location. Demurrage fees are charges assessed by the carrier to recoup its costs for holding goods at the terminal beyond the agreed free hours.

Demurrage fees will continue to add up even if the delay to pick up your cargo is because of congestion at the terminal. It is charged daily so collect your cargo as soon as possible to avoid hefty demurrage fees.

How do you cut Delivery Labor Fees in logistics?

The shipper may reduce their delivery labor fees by utilizing the maximum allowed weight of the shipment and having a flat rate labor fee charged at delivery.

Do not, however, exceed the weight limit.

When you take the services of a reputable company, you may get discounts which result in reduced shipping trickling down to the overall cost of goods.

You may pass on the savings realized from such discounts to your customers or use it to increase your profits.

Get quotations from several sources (companies) and choose the best in terms of efficiency and best rates.

Use packaging boxes of correct size and dimensions to avoid extra charges associated with extra-large boxes.

Does Delivery Labor Fees factor into the Final Cost of shipping?

Yes.

Cost of shipping is the total expense incurred in moving goods from origin to final destination.

Delivery labor fee in this is an expense that you incur to ensure goods are safely unloaded and delivered to your destination location.

So yes, delivery labor fees factor into the final cost of shipping.

How is Delivery Labor Fee calculated?

When the tracker takes at least 20 minutes to unload the truck, they are entitled to a fixed amount as a delivery labor fee. Any extra time that the trucker takes during offloading is charged per hour.

If the tracker helps the buyer with lift gate services, a standard fee is charged which is usually higher.

The truck will have electric or hydraulic equipment fixed at the back of the truck to help lift the weights of the cargo.

Not all trucks are fitted with hydraulic equipment, so you need to let the trucking company know you need the lift gate.

You may incur extra charges in case you need a lift gate to offload your cargo, and it is not available. That means that your cargo will be redelivered, which will cost you more.

Is Delivery Labor Fee Negotiable?

Yes, delivery labor is negotiable under different circumstances.

As this is an accessorial charge, you can always ask for a discount especially if you’re a regular customer of the trucking company.

Does the Delivery Labor Fee cover risks in unloading?

No.

The delivery labor fee is the price of the unloading services paid to the driver/trucker. The labor fee does not cover any damages or loss that may occur during cargo unloading.

Who takes Liability in case of Damage or theft during Cargo Unloading?

Last mile delivery

Last mile delivery

It is pretty common for cargo to get lost or damaged during unloading.

Unfortunately, most trucking companies don’t take responsibility for this. Remember, delivery labor is an outside arrangement.

It is not part of the last mile delivery contract. As such, any liabilities are only borne by you (buyer/importer).

It’s worth noting though that most truck drivers are disciplined and won’t steal goods when offering delivery labor services.

They have employment contracts that bind them to ensure professional and reliable service delivery.

However, if you suspect misconduct in terms of cargo theft during delivery labor, you may launch a complaint with the trucking company.

They should be able to give you the right way forward.

Regarding cargo damage, this liability is also not borne by the trucking company.

You, the buyer, will solely bear this loss.

That is why it is important to consider your options when requesting for delivery labor.

If shipping goods that require special handling, it is better to hire skilled lumpers to do the task.

Moreover, it is important to get last-mile cargo insurance to give you additional protection against the risk of damage, theft, or loss.

Choose one that covers your liability in case of damage or theft during cargo unloading.

How do you Ensure Safe Unloading during Shipment Delivery?

If you are in the business of importation, it is important to know how to pack and secure your cargo during shipping.

The unloading process can be considered as one of the most vulnerable phases of shipping. It is the time when your cargo can easily be damaged or lost.

Proper packaging using the right materials is essential in ensuring your cargo reaches its destination in good condition.

It may also prevent damage during unloading. Securing the cargo well during loading is also vital. It will keep goods from toppling and falling over during unpacking.

The quality of unloading also affects the safety of goods in the delivery process. Off-loaders should be trained and skilled in handling many loads for unloading products safely.

If not, find skilled labor to do the unloading. This will help avoid losses due to poor handling during the unloading process.

If you’re transporting large volumes or special goods, make sure that you use the right personnel and equipment for the unloading.

How do you pay Delivery Labor Fee when shipping?

Usually, you will pay the delivery to the cargo transportation company after the trucker has helped in offloading the cargo.

The company sends you an invoice and you my then do a bank transfer from your account to the company’s bank account.

You may also consider other payment options acceptable by the trucking company such as credit card payment, or PayPal.

How does increased Delivery Labor Fees affect your Import Business?

Increase delivery labor fees delivery increases the cost of shipping.

Ultimately, you will have to factor in this increase into the final cost of your product setting prices a little higher.

Note that a high cost of goods tends to driver away customers, especially if your goods are higher priced that the competitors.

You may choose to pass on this extra charge to customers or not. The latter, beware, will eat into your profits.

Are Delivery Labor Services applicable to Goods that require special handling?

No.

Delivery labor service does not apply to goods that require special handling, as these special skills and equipment to unload.

Goods that require special handling may be dangerous goods i.e. HAZMAT, fragile items like glass, or OOG which require the use of special equipment.

Special handling involves additional time, costs, and procedures that a truck driver may not be able to offer.

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How does Delivery Labor Fees Factor into your product landed costs?

Charge of delivery labor fees is a value that will eventually land in your product landed cost.

Note that landed cost is the sum of all expenses required to bring a product from its origin or manufacturer to its final destination.

These expenses typically include costs for purchasing goods, packaging materials, shipping or freight charges, insurance, and taxes as well as accessorial fees.

The delivery labor fee is an accessorial charge.

It occurs during last mile delivery and yes, it factors into the final landed cost of the product.

You have to consider all costs and fees, including delivery labor, when calculated the final cost of shipping the product and setting its market price (if importing for resell purposes)

Product landed cost is a key element in determining the profitability of any business.

Therefore, it is important to make sure that you have accurate landed costs for your deliveries.

Can seeking a Freight Forwarding Partner help you avoid or Lower Delivery Labor Costs?

Yes.

A freight forwarding company is not only a forwarding agent but also offers other services like consolidation and inventory management.

They also offer planning and documentation help, arranging pickup and delivery as well. This makes them an essential partner in your supply chain.

Freight forwarding companies provide this service for a fee besides the shipping costs.

If you use them as ‘your one-stop shop’, a freight forwarder will help you get your products shipped with minimal or even no delivery labor costs.

It is important to find freight forwarder who can save you money in shipping.

The best freight forwarder is the one who can provide shipping services across different modes of transportation.

They should have the capability to all kind of shipments including full container loads and partial loads, line-haul loads, or full truckload shipments.

Are there exceptions to the Delivery Labor Fee?

Yes.

If you are a regular client to the logistic company, they may discount you on the delivery labor fees.

A freight forwarder offering you import haulage may also give you a delivery labor discount. This is only if their service package includes last mile delivery. Most forwarders also offer this service for free to repeat customers. So you may want to establish some loyalty with your import/shipping partners.

Who pays for Delivery Labor when shipping under DDU or DDP terms?

The buyer/importer pays for delivery labor both under DDU and DDP terms.

On the DDP incoterm, the seller delivers goods to the buyer’s premises. He pays for all costs including clearance fees at the customs, VAT, all taxes, and import duties.

The seller takes care of the entire risk of loss until the cargo gets to the buyer’s door. He does not, however, pay for the unloading of cargo.

With DDU shipping, the seller takes care of all costs until the cargo gets into the buyer’s country.

The buyer then takes over the shipment and pays for VAT and/ or customs charges as applied in their (buyer’s/importer) country.

In both terms, the buyer/importer is responsible for all shipping costs including last mile delivery of cargo.

So in both terms, unless otherwise agreed upon by the buyer and seller, the buyer pays for delivery labor whenever necessary,

Is Delivery Labor Fee legal?

The primary job of the truck driver is to safely deliver the cargo to the buyer’s premises.

If the driver helps to unload the cargo at your premises then it is reasonable that you pay for the offloading labor.

This is keeping in mind that cargo loading and unloading is outside their service jurisdiction and the trucking company’s per mile rate.

So yes, delivery labor fee is legal as it is payment for a service rendered.

What is the difference between Delivery Labor Fee and Lumper Fee in Logistics?

As stated severally, a delivery labor fee is the amount paid to the truck driver for physically unloading your cargo at destination.

The fee applies when the trucker spends over twenty minutes offloading.

 Lumpers

Lumpers

Lumper fees are the amount paid to third-party workers (lumpers) hired to help with the loading or unloading of cargo at a destination.

The truck driver either pays the lumper fee in cash or issues them with a cheque.

The amount the trucker pays to the lumpers (lumper fees) is then reimbursed to him by the buyer/shipper or the carrier.

At BanSar, we will help you in all freight forwarding services to any global destination – talk to us now.

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