Drayage shipping can be a smooth, inexpensive step of the supply chain process for some companies, while others are forced through an expensive nightmare in which their shipment’s progress grinds to a halt for days, leading to customer service issues. drayage fees are the cost of moving goods a short distance, often containers from the port to places such as a warehouse or distribution center, usually in the same metropolitan area. Companies must have a good game plan for their drayage shipping to ensure the supply chain runs correctly and deliveries are made on time while ensuring drayage fees don’t hit them hard in the wallet.
This article describes the different types of drayage fees, how to calculate the freight weight cost in drayage, and how to save money when using drayage shipping.
Factors that Impact Drayage Fees
The weight of the shipment and how far you are moving are often the most critical factors in determining the cost of drayage fees. But there are other fees involved that you need to keep in mind. Here are some factors that impact how much you pay in drayage shipping:
- Weight and size – The size and weight of shipments vary greatly, and thus, so do the costs associated with it. Heavier loads require more resources to move and take more time, so they will cost more. An overweight fee may also apply if the weight exceeds the maximum allotted. The shipment size follows the same rules, with larger ones, also referred to as out of gauge, more expensive.
- Distance – The miles you travel from the port to the next destination can affect drayage fees significantly. Drayage shipments often require a longer journey, especially if traveling within a large metropolitan area or even to a nearby city.
- Origin and destination – Where are you picking up the container from, and where is it going? Each hub is different in terms of the costs and how long it takes to get the shipment on its way.
- Mode of transport – How are you moving the goods during drayage shipping? Trucks and vans are often the most efficient method of transportation to get the shipment to its next destination, but the type of vehicle and equipment required to move the freight adds to the costs. How easily the cargo can be loaded and unloaded must also be considered. Does the shipment require a forklift, or will a pallet jack suffice? How does the merchandise need to be stacked? Special loads need special attention, which adds expenses.
- Other considerations – Fragile shipments must be handled carefully, which adds time and costs. The type of packing also plays a role in how long the drayage process takes. Was your shipment stacked correctly at the origin point, and if not, will that add time to the process? Floor-loaded crates are a quicker, less expensive way than using pallets. All of this needs to be taken into consideration.
Different Types of Drayage Fees
Transporting shipments, no matter the distance, may still add up price-wise. Here are some of the different types of fees associated with drayage shipping:
- Flat rate – Flat rates charge one price, and the quoted price is what you’ll pay — there won’t be any additional variable costs. Flat rates are often used for shorter distances or lower volume shipments, and the price is predetermined regardless of size or weight. If the flat rate is the linehaul rate, calculate the cost by multiplying the shipment’s weight by the distance covered.
- Weight-based – A hundredweight, known as a CWT, is a unit of measurement that calculates how much your shipment weighs in 100-pound increments. The heavier the goods are, the more you will be charged as additional resources are required to transport the freight. In drayage, costs usually run between $60-160 per CWT. More on how CWTs work is found later in this article.
- Peak surcharges – Different prices will be applied depending on when you transport the items. If shipments must occur during the night, weekends, holidays, or busy season, you should expect higher prices than off-peak times. If goods must move immediately, peak surcharges may come into play depending on the day or even the time.
- Accessorial charges – They may include driver detention (making them wait may result in overtime), tolls, fuel charges, terminal charges, additional stops required, and equipment costs, including if any special equipment is essential to finish the job.
- Other charges – Some other fees you may run across include:
- Drop fees are charged if a carrier can’t load the freight immediately and instead has to drop the shipment at its destination and pick it up later, often resulting in costly delays.
- Pre-pull fees occur when a container is pulled to prevent it from going into demurrage, but it is not loaded and delivered on that same day. The carrier is now forced to store the container.
- Chassis split fees – If a chassis isn’t available at the port or ramp, a driver will need to travel to another location, adding extra time and mileage costs.
Avoid Fees Whenever Possible
Keeping to a tight schedule for each step of the process is essential, especially when avoiding detention and demurrage fees. Demurrage (leaving your shipment at the port too long) and detention (taking too much time to return empty containers) fees add up quickly if the process continues past the allotted number of “free” time (usually 3-7 days). Both of these fees can run over $100 per day and keep increasing in rate the longer you are late.
Other Possible Ways to Save on Drayage
Working with Port X Logistics is the best way to help cut down on possible fees that may be avoided and make your supply chain process run more efficiently, and here are some other ways to try and save:
- Implement better communication and coordination before and during the process
- Use technology to streamline the process
- Keep records of every transaction
- Use a more direct route when possible
- Use different types of packaging
- Make sure the shipment is packed correctly
- Load and unload during off-peak times
- Avoid tolls when possible
- Invest in reusable storage containers
- Compare rates among various providers
Port X Logistics Helps With Your Drayage Shipping
Knowing what your drayage fees will be is often a complicated process. Even though drayage is one of the shortest in the supply chain process, it’s a vitally important one that can make or break a business. It’s good to do your homework and know what’s in store. Unique circumstances are bound to arise, and you’ll have to fix problems as they arise throughout the process. In these volatile times for shipping, it’s good to work with a partner who communicates with you, can help with any drayage issues, and has your best interests in mind.
Port X Logistics helps with drayage shipments, offering just-in-time solutions to fix supply chain issues. Port X Logistics offers drayage service from all ports and ramps throughout the United States and Canada, giving you live tracking of your shipments so you always know what is happening and are never left in the dark. Visit Port X Logistics today to see how they can help your company reach its goals and have the smoothest drayage process possible.