Jul 14

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What Is Drayage Shipping

8 minute read
Brian Kempisty
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Among all the shipping, delivery, and freight transportation services utilized daily across the supply chain, drayage services are perhaps one of the most critical of the shipper services provided to the industry today. The best shipping and service drayage depends on meeting customer needs and expectations while also addressing market trends and their volatility. 

Additionally, the services involved in port drayage are in a near-constant state of change, making it critical that shippers, carriers, 3PLs, and customers stay in communication with one another. Understanding the logistics required for drayage shipping necessitates at least a basic understanding of the current state of the market. From driver and capacity shortages to ongoing pandemic-related disruptions, the supply chain is under pressure to adapt, improve, and satisfy consumers’ and shippers’ growing needs and concerns across multiple markets and industries. According to Supply Chain 24/7, “The truck driver shortfall hit 80,000 drivers in 2021 and is expected to grow to 160,000 by 2030.” 

The driver shortage is just one of many challenges facing the logistics industry. For example, U.S. inflation and rising diesel prices are increasing the cost of shipping loads; there is also a shortage of containers and chassis due to a surge in consumer demand due to the global pandemic. Meanwhile, customers expect companies to provide real-time tracking to ensure products arrive on time. Therefore, shippers and transportation providers must optimize their services to adjust to a changing landscape. Yet, the supply chain keeps moving, and drayage shippers must overcome these challenges to succeed. This article will describe the intricacies of drayage shipping and how drayage and port container management works.

What Is Drayage?

Drayage logistics and drayage services are vitally important parts of the transportation industry. As the world has become dependent on global supply chains, the drayage industry continues to see extreme growth, notably during the pandemic. But unfortunately, most people still do not fully understand these services.

According to an April 2022 report from Market Watch,the Global Drayage Services market size is estimated to grow at CAGR of 2% with Revenue USD 2.90 bn during the forecast period 2021-2025. The YOY (year-over-year) growth rate for 2021 is estimated at 1.49% by the end of 2025.”  Drayage shipping involves retrieving shipping containers from a local port or railroad facility and then moving that cargo to another location like a trans-loading facility, distribution centers, shipping hubs, warehouses, and retail stores. 

Understanding what drayage is in shipping and what drayage means for logistics and truckload services is increasingly essential for shippers.  Drayage also involves the movement of material by truck, air, sea, or railroad. Improved drayage shipping bolstered by technology for better visibility, container tracking, and planning helps ensure all goods are transported safely and efficiently.

By industry standards, port container drayage logistics and port container transportation are at the forefront of supply chain logistics and freight management. While shippers often focus on first-mile delivery services and the initial customer encounter, dray shipping and short-haul transportation are equally important. Better processes and management of drayage moves help shippers keep customers satisfied and brand reputations strong. Conversely, poor drayage execution from the arrival port to the next destination keeps brands’ products from getting to their customers on time, harming profit margins and the brand’s reputation. The key to improvement is through a strategic approach to drayage logistics. 

What Characteristics Must be Present in Quality Drayage Shipping?

Managing the drayage of containers from port to warehouse, DC, or temporary storage is vital to the domestic and international supply chain. Well executed drayage services and container logistics makes it easier for shippers to balance costs and profits. In addition, improved visibility into the process of drayage shipping and drayage logistics makes it possible to ensure the highest quality of services. This, in turn, makes it easier for service providers to keep profits and expenses balanced. 

Every decision logistics managers make regarding drayage services and implementing successful crisis management protocols, customer interactions, and team member collaboration ensures customers can manage expenses more efficiently. As highlighted by SupplyChainBrain, “US business logistics costs, or USBLC, rose 22.4% in 2021 to $1.85 trillion, representing 8% of 2021’s $23 trillion gross domestic product. Inventory-carrying costs rose by 25.9% in 2021, and transportation costs jumped 21.7% — in the ocean by 26.3%, for the road by 23.4%, and parcel carrier services by 15.2%.” As logistics and transportation costs increase, it is more important than ever for shippers to utilize all the resources available today via service providers who offer technology to improve drayage processes. Here are some of the characteristics of best-in-class drayage shipping services:

1. Scalability, Versatility, Adaptability, and Affordability 

The most reliable drayage provider will offer quick and easy options to help shippers scale and adapt to current market trends. In addition, they will ensure consumer demands are met with versatile drayage shipping options. Customized services, predictive planning, and on-demand resources will ensure all drayage container shipping and freight management requirements are met at competitive rates. 

2. Outstanding Customer Experience and Service Options

Shippers expect that their shipping partner provides container tracking, competitive dray shipping rates, and good communication.  

3. Superior Expertise and Industry Insight Access

The longer a drayage company has been in business, the more likely they have experience planning and operating the logistics for a customer.   The leading drayage companies have superior expertise, practical and applicable technology, and access to drayage shipping data and resources that otherwise would be inaccessible to smaller companies

4. Competitive Pricing Options and Pricing Tier Opportunities

Another essential characteristic to look for when seeking a reliable drayage provider is competitive pricing and a strategy focused on reducing total costs of transportation. Knowing drayage service and offering the best drayage shipping is essential, but in many cases, shippers are still mindful of rising shipping costs.

5. Reliable Delivery Through Improved Logistics

Dray shipping depends on the speed and reliability of services. Due to port backlogs and inland congestion, many retailers miss out on sales and revenue due to delayed receipt of inventories and poor logistics management. Drayage shipping services behave like dominoes — when one gets knocked off track, the rest of the supply chain is soon to follow. 

How Does Container Drayage Impact Shipping?

Drayage shipping management is the first leg after a container is transloaded from the vessel to the drayage or port truck. Drayage kicks off the process of further inland distribution, as the container or the goods in the container make the journey to their final destination. Statista estimated that more than 31 million twenty-foot equivalent units (TEU) of cargo made their way across the Pacific Ocean in 2021. This made Trans-Pacific routes the largest shipping zone in terms of load size globally. As a result of globalization, the volume of sea trade was more than 11 billion metric tons in 2020-2021. It has only climbed higher as recovery efforts continue across domestic and international markets. According to industry experts, determining what container drayage is depends on the drayage classification and the driver dynamic involved. 

Typical types of drayage seen include: 

  • Inter-carrier drayage – The movement of cargo that involves drayage logistics and planning to secure shipping within a short distance among different carriers.  
  • Expedited drayage – Over-the-road drayage shipping, most commonly used for time-sensitive products or goods that need fast or delicate delivery handling.
  • Port-to-door drayage – Local carriers deliver retail orders to the customer’s location with drayage container port container-focused dray transportation. 
  • Shuttle drayage – Freight is temporarily held elsewhere before following standard drayage shipping practices to help alleviate port congestion and backlogs.
  • Pier drayage –  Dray shipping and planning takes cargo to a dock or pier from another site and utilizes cross-docking and unloading processes.  

Understanding these drayage shipping options can help customers understand the right match for their business.  

Need-to-Know Tips to Help Providers Lower Drayage Shipping Costs

 The expenses related to dray shipping services come down to how shippers overcome rate fluctuations, customer demands, and capacity issues. , 

Supply Chain Quarterly noted in a June 2022 report that current drayage rates are up nearly 30% compared to the previous year. In addition, port disruptions have fueled delays which are excepted to continue and likely worsen. The report also highlighted an 18% increase in rates in the national drayage spot charges for the third quarter of 2022, compared to a 7% increase in drayage shipping costs last year.

The following tips help logistics managers make cost management easier for their drayage shipments. 

Improve Turn-Times For Containers

Drayage logistics makes the drayage transport mode more efficient, including lower container turn-times. Faster services and easier management of containers are critical for drayage shipping, as ports are congested when trucks are not available for pick up.

Take Advantage of Local Warehousing 

There’s nothing more frustrating than speed and accuracy problems at the distribution center, often causing financial loss, unhappy customers, and damage to the brand. Drayage service providers often have warehousing options in their solutions offered, or partners to ensure goods are stored, even temporarily, before moving to the next leg in the journey. Proximity to port, connected systems, and a disciplined approach to drayage shipping services in combination with local warehousing means products are distributed faster, accurately and damage-free.

Consider the Accessorial Costs and Fees

Cost management remains a driving force for BCOs, or shippers, for growth. Shippers should expect their drayage service provider to offer transparent rates, including any other fees, so shippers have all they need to choose from various drayage shipping options. Accessorial fees, surcharges, fuel surcharges, storage costs, and chassis splits must be considered carefully when calculating drayage shipping costs.

Sort and Organize Loads Away from the Port

Thoughtful logistical planning and deconsolidation will continue to be critical components of drayage shipping, management, and planning. Streamlining the deconsolidation process of drayage container port containers and ensuring fast distribution and execution of dray shipping is possible with proper planning. Moving off congested ports makes it easier to not only sort and distribute the cargo but frees up the docks for other containers to be loaded and unloaded to keep things moving. 

Choose Shipping Methods Other Than Long-Hauls

Improving end-to-end drayage shipping requires shippers to rethink processes and improve standards related to shipping, loading, unloading, and hauling services. In addition, utilizing local drivers and transportation providers saves shippers and customers time. As a result, ports remain clear, drivers keep moving, dray shipping routes flow, and customers receive shipments. 

Know what Associated Labor Costs are Needed

To fully understand container drayage shipping and how it relates to the labor and other accessorial costs associated with cargo shipping, shippers must consider what goes into drayage transport and container shipping. The more hands involved, the more shops and changes a container makes, and the more stops along the way, the more the transportation cost will increase. Streamlining the process ensures that shippers can answer the question, “what is container drayage service availability and cost?”

Push Notifications for Delivery Expectations

Push notifications and real-time communications make meeting and exceeding expectations easier with every load hauled, no matter what it might entail. 

Pre-Consolidate For Easier Drayage Scheduling

Drayage shipping experts also look for ways to cut costs and ensure loads get consolidated and inspected ahead of time. Taking the time to package, organize, and group cargo ahead of time helps streamline loading processes related to dray transport. Everything from scheduling to loading to final delivery can benefit from pre-consoliation work ahead of time.      

Monitor the Impact Drayage has on Shipping 

In addition, experts in drayage services will also keep a keen eye on the market, track market trends, customer habits, and historical data, and utilize innovative tools and modern tech to perfect shipping services.  

Collaborate and Coordinate For Maximum Impact

The final step that can have long-term positive impacts on drayage shipping is perfecting the practice of collaborating and coordinating with other industry leaders, third-party partners, and team members.  To keep drayage transport and delivery service optimized will require ongoing teamwork, networking, and support throughout the supply chain.

Roll With the Punches and Weather Disruptions With Proven Dray Shipping

Shippers and transportation service providers must respond with tailored responses that focus on individual customer needs and goals. Disruptions will continue, and while they cannot be stopped, good drayage service, logistics, management, and response can make all the difference. 

Statista revealed in a mid-2022 report that “over half of surveyed supply chain professionals stated that they found supply chain disruptions and shortages extremely or very challenging. During the survey, demand-side challenges, such as faster response time, were cited among the most difficult hurdles supply chain companies face.” In addition to those challenges, the freight markets are a highly interconnected array of companies, shippers, suppliers, manufacturers, retailers, and shippers. 

The entire supply chain relies on every other component working smoothly, and at the heart of nearly every leg of the supply chain journey is drayage shipping services. To ensure a strong network between a company and its suppliers, manufacturers, retailers, and customers, a solid dray transport chain is necessary to facilitate the distribution of goods to customers quickly, effectively, and affordably?

Master the Modern Supply Chain and Perfect Drayage Logistics and Shipping

Drayage shipping s comes down to maximizing visibility and insight into all areas of operation, knowing which solutions work best for any given load, route, customer, or need. Port X Logistics drayage shipping services are designed to meet the needs of shippers of all sizes and specializations today. As a result, lowering costs and expenses is possible. However, it requires the correct partnership and access to the latest innovative tools and technologies. Contact Port X Logistics to get started.

Brian Kempisty