The movement of goods from one place to another, especially internationally, consists of various processes. Drayage is one of the most important aspects of business logistics. It is simply the movement of goods or cargo containers over a short distance using a truck. The distance can be from a port or terminal to a warehouse or distribution center. Find out more about drayage and its processes in the rest of this article.
Types of Drayage
Drayage serves different purposes in the logistics industry. In most cases, it is the last link between the supplier and the goods owners. Likewise, it can serve intermodal purposes by linking different transportation modes, i.e., ocean freight to air freight.
Thus, drayage can be categorized into different types, depending on the logistics needed. Each type is highlighted below with its characteristics.
Intra-Carrier Drayage
Intra-carrier drayage is a short-haul that uses one transport system to move goods and cargo in the same carrier network. It can be used to move goods within an airport’s docks or transport goods to a freight station from the port. Moving a cargo from a rail terminal to a warehouse with a single carrier is a good example of inter-carrier drayage.
Characteristics
- It is within the same carrier network
- Mostly used within the ports for moving from one dock to another
- It is usually a short haul from truck to truck or rail to rail.
Inter-Carrier Drayage
In some situations, goods must be transported by different carriers before reaching the warehouse or final destination. For instance, goods dropped off by a train at the station can be further moved using a truck. This situation is known as inter-carrier drayage, which is essentially a drayage process involving different transportation modes.
Characteristics
- Two or more modes of transportation is involved
- Usually, longer distances than intra-carrier drayage
Pier Drayage
Ships are one of the most prominent means of transporting heavy cargo. As such, moving containers from a seaport to a warehouse, distribution center, or rail ramp is known as pier drayage. Due to the peculiarity of transportation from port to other destinations, it is sometimes called port drayage.
Characteristics
- It transports from the port to other destinations
- It is usually within the same local area as the port
- It mostly makes use of trucks.
Shuttle Drayage
If there are excess containers, a shipping hub may run out of room. The process of transporting the excess cargo to temporary storage is called shuttle drayage. Docks usually employ shuttle drayage to solve storage challenges, especially when there are no more spaces on a ship to contain the available cargo in the port.
Characteristics
- Usually, transportation within the local port area
- It involves the use of trucks
- It transports the cargo from the port and returns it when space is available.
Expedited Drayage
When cargo needs to be transported urgently from a dock or rail ramp, expedited drayage is employed. It is mostly employed for transporting perishable goods since it is the fastest type of drayage. It can also be used when a cargo has to reach its destination as soon as possible.
Characteristics
- It is faster than other types of drayage
- It is used for transporting perishable goods and items in high demand
- The process is equally faster compared to other types.
Door-to-Door Drayage
Door-to-door drayage is mostly used in e-commerce. It is a transportation system that delivers directly from the port to the final customers’ doorstep. Middlemen and business intermediaries also use this option to transport goods from manufacturers to different customers without having to directly influence transportation.
Characteristics
- It is commonly used in e-commerce
- It uses truck mode of transportation to deliver to different warehouses or destinations
- It saves cost as it handles multiple deliveries at once.
The Importance of Drayage in the Supply Chain and Logistics
Drayage in the logistics industry serves many important roles. Its essentiality cannot be downplayed due to its numerous benefits. Below are some of the benefits:
- Efficient Cargo Movement
Drayage is essential for smooth cargo transportation out of port, docks, and rail ramps. It ensures the easy flow and movement of cargo between different modes of transportation, consequently reducing transit time and enhancing supply chain velocity.
- Supply Chain Optimization
Drayage has been instrumental in removing bottlenecks associated with cargo movement. Streamlining cargo transportation out of ports has greatly helped supply chain operations and delivery.
- Reduces Port Congestion
If not for the integration of Drayage, ports and docks will suffer congestion, which could slow down supply chain operations. The easy and consistent cargo movement has helped reduce congestion and enhance swift supply to warehouses and businesses.
- Improved Cargo Security
The swift movement of cargoes adopted in the drayage process has helped ensure cargo security. Less handling encourages a reduction in the risk of damages.
- It Encourages Flexible Transportation
Drayage supports the flexible movement of cargo, including scheduling and routing. It accommodates changing supply needs and is effective for flexible processes such as door-to-door supply.
Possible Challenges Associated With Drayage and How To Navigate Them
When employing drayage for the movement of your cargo, there are possibilities of experiencing some challenges. Identifying these issues helps you prepare adequately ahead. Here are some of the likely difficulties you may face and how to address them:
- Route Planning Challenge
Effective planning of your drayage route can be of great concern. This is always a challenge when you are moving across a busy or congested city with heavy traffic. If not properly handled, this challenge can consequently lead to other issues such as delayed delivery, increased fuel consultation, and additional expenses.
To navigate this challenge, you must properly review the city activity before initiating the Drayage. You must ensure the process is done when there is less traffic, no road closure, or any other delay.
- Port or Terminal Delay
There is a possibility of witnessing a delay in the port or terminal. This can be a result of unforeseen circumstances such as canal blockage, elongated customs clearance, and rail strikes. When all of these are in place, the drayage process can be delayed, causing an interruption in the supply chain.
To avoid this, you must be fully aware of the condition of the port or terminal before initiating your Drayage process. Likewise, you may need to ensure proper documentation of everything that is needed for customs clearance to avoid any kind of delay.
- Shortage of Chassis
When transporting containers from a port or terminal to their final destination, the truck makes use of the chassis on which the container sits. Interestingly, drayage carriers don’t own chassis, but rent it from the terminal. There are situations where chassis shortage can cause an extreme delay in the drayage process.
In order to address this, avoid shipping during the peak shipping seasons. These periods are known to experience massive drayage operations, which eventually lead to chassis shortages.
- Challenges of Additional Charges
There are stipulated fees associated with a drayage process. However, a carrier can incur additional charges when proper care is not taken. This mostly happens when the carrier has exceeded the Last Free Days before the movement of the truck. Also, an additional fee will be paid if the container is returned late to the terminal or port.
Avoiding additional charges is as simple as having a proper plan. Ensure that you move your cargo within the Last Free Days (LFD), which is the number of days given for your cargo to stay freely in the port. Likewise, you must avoid any form of delay while retaining the container and bringing it back to the port.
Drayage Cost and Charges
The drayage service includes a diet structure that you must be aware of before engaging it. Understanding these cost implications allows for faster processing and swift customer clearance. You need to be informed that these charges can vary depending on cargo type, distance, and additional services required. Below is an overview of the charges you need to know:
- Terminal Charges
This is the fee for the terminal or port where the cargo will be picked up. It is related to the movement of the container and can vary from port to port.
- Chassis Usage Fee
You will need to pay for the chassis used with the truck while mounting the cargo. This is paid to the terminal, too, and can vary from port to port.
- Fuel Surcharge
This charge covers the fuel the truck consumes during transportation. The value is usually based on the present fuel price and changes when the price fluctuates.
- Demurrage
There is a stipulated time when your cargo can stay freely on the port after delivery by the ship. This period is known as the Last Free Days (LFD). Exceeding this period will attract a few, called demurrage.
- Drop Fee
This is the fee that will be paid when a truck needs to deliver the container and come back for it later. This usually occurs when the offloading of the goods requires a lot of time.
- Special Handling Charges
Special goods such as hazardous substances, heavy equipment, and special care goods will incur additional charges. This is necessary because handling them requires additional attention.
- Additional Stop Charges
This charge is usually associated with door-to-door drayage. It is charged when the truck has to make multiple stops to offload goods.
Conclusion
The drayage market size keeps expanding by the day. It is forecast to experience an annual growth rate of 2.52% between 2024 and 2028, with a growth value of $3.60 billion. A proper knowledge of the drayage service as provided in this article, will guide you to become a player in the industry. Conclusively, Drayage aids a seamless transportation of cargo and goods within the terminal and other distribution networks which is an essential aspect of the logistics industry.
