TONU Explained for Freight Brokers

TONU Explained for Freight Brokers

Freight 360 By Freight 360

What is a TONU (Truck Order Not Used)? In this blog we are going to break down one of the commonly disputed charges in brokerage and transportation.

Truck Order Not Used – Overview

As we covered in the past, a TONU, short for Truck Order Not Used, is an accessorial charge paid to a driver for their time when a load is canceled on them for a variety of reasons.  The load could be delayed until a later day, two drivers could be double booked on the same load, or perhaps the shipment was canceled altogether by the shipper.  Regardless of the circumstances, the TONU is intended to compensate the driver for their time spent on the load even though it wasn’t picked up.

Drivers like to be compensated for loads that are canceled since they feel they missed out on the potential to earn money from that load.  The tricky part is to determine where to draw the line with paying a TONU.  There is a difference between a load being canceled an hour before the pickup and a couple of days before the pickup.  I’m going to lay out three situations: one in which a TONU should be paid, one where it shouldn’t be paid, and a third which falls into a bit of a messy situation.

Example 1: Pay TONU

Let’s say it’s Tuesday, and you book a driver for a pickup tomorrow morning Wednesday at 10 am.  The rate con is sent and signed and you tell the driver to call you the next morning when they are on the way to the pickup.  The next morning, your driver calls you at 8:30 am letting you know that he is empty from his last delivery and on his way to pick up your shipment.  At 9am you get a call from your customer that the shipment has been delayed until next week because it’s missing something.  You have to call your driver and cancel the load on them just an hour before the scheduled pickup after they have already started to drive to the shipper’s facility.  This is a great example of when a TONU is in order.  Your driver was already working for you on your load and spent time as well as burned fuel to head to the pickup.  The fault here would fall on the customer who would be expected to pay a TONU of let’s say $200.  The carrier will likely ask you for a TONU, and you should verify with your customer the amount that they typically pay for canceled loads.  You would invoice your customer for a $200 TONU, create a new rate confirmation for your driver for $200, and everyone moves on with life.  You, as the broker, don’t make any money on this transaction, but you ensure your driver is fairly compensated for the little bit of time they spent working on your load that ultimately was canceled.

Example 2: Don’t Pay Truck Order Not Used

Now, let’s take a look at a different example.  Let’s say it’s Friday and you need to book a truck for a Monday pickup for one of your customers.  You talk to a driver who says they can be at your customer’s location Monday morning after they deliver tomorrow, Saturday, nearby and take their 34 hour reset.  You get a call from your customer Friday afternoon canceling the Monday shipment.  You then let your driver know that the shipment was canceled and you don’t have another load for them for Monday.  Your driver might ask for a TONU, but in this situation, it wouldn’t be warranted.  Let’s break this down and see why you wouldn’t pay a TONU.  First, the load was canceled days in advance, so your driver has ample time to find another load that suits their desired destination and rate.  Second, your driver wasn’t working on your load yet.  They were still hauling a load for someone else when you canceled the load on them.  This is where most brokers and shippers draw the line on paying a TONU.  If the driver isn’t on your time yet, and by that I mean they’re not working on your load, they shouldn’t be entitled to a TONU.  They are still on someone else’s time and dime per se.  If they had already delivered their last load, but hadn’t dispatched to your pickup yet, this might be a gray area that you would want to talk to your customer about.  But, in this case, the load was canceled three days in advance so no TONU is in order.

Example 3: The Messy TONU

There’s a handful of situations when a TONU might be asked of a driver but your customer refuses to pay it.  In these cases, you’ll have to make a judgment call as to whether or not you feel the driver deserves to be paid.  At the end of the day, if your customer isn’t going to pay it, you would be paying out of your own pocket to compensate the driver.  This is often done to keep a strong relationship with both your customer and a solid carrier that you feel deserves to be compensated.  Let’s say you book a carrier and your customer cancels the load 20 minutes later.  Your customer likely won’t pay a TONU since they canceled it so quickly.  But, the driver might have started driving to your pickup and turned down another load.  It can be a tricky gray area, and you might want to pay a small TONU out of your own pocket since the driver did spend some of their time, even though it was only 20 minutes.  If you were in their shoes, would you feel like you deserved a TONU?  That’s a good way to look at it.  Another example of a messy situation could include your customer changing the shipment weight or adding extra equipment such as tarps when the driver cannot meet those requirements.  You’ve got to put yourself in both party’s shoes and make a judgment call.

TONUs aren’t going away anytime soon, so be prepared to let down a driver every now and then when they won’t be getting the load they wanted.  To keep a good reputation with carriers, make sure you are proactive about getting a TONU approved as soon as your customer cancels or changes the load on you.  This will save the back and forth with your driver and customer, so everyone can move on to the next fire to put out in the freight world.

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