In logistics, drayage is a cargo transportation service that's especially valuable in the modern trade market. Since ports are extremely busy places, it's an important consideration for direct-to-consumer companies. This guide will define drayage and explain why it's important. Learn about the different types of drayage, trucks, and fees.
In ecommerce fulfillment, drayage is defined as a form of moving cargo over a short-distance, typically after a lengthier journey by land or sea. It may also be referred to as dray services. The service requires a specific type of truck, which will be covered later. It typically involves moving freight containers from port shipyards to nearby warehouses or distribution centers by truck. Drayage is often confused with intermodal shipping, which involves using multiple methods to transport cargo. While drayage is one component of intermodal shipping, the terms are not synonymous.
Since there is a strong incentive to return containers, drayage includes a return trip. When discussing the drayage meaning, logistics experts note that it is part of a larger overall move. For instance, the overall move may include port to port, port to warehouse, and warehouse to retailer or customer. In this example, the dray services only include transport from the port to the nearby warehouse. Typically, moving goods from one port to another or from a warehouse to a customer would be considered longer-distance moves.
One of the main reasons why drayage is important is because of limited port space. If all large trucks were allowed to drive up to the docks, the ports would quickly become congested. Drivers who are unfamiliar with the port or the region would reduce efficiency. With dray services, truck drivers stay close to the port and are familiar with the procedures and the area. This improves efficiency in first-mile delivery.
Drayage also reduces costs through efficient transportation. Shipping providers who own the freight containers charge fees that encourage efficient movements. They include free time, which is a specific number of days the customer can use the container without extra fees. The carrier may charge a penalty if the freight containers are not returned within a given time period. When containers are left longer than allowed in shipyards, ports may charge steep fees as well. With dray services, companies have a more efficient solution for receiving and returning containers quickly to avoid such penalties.
Demurrage fees are assessed for any extra time the container remains in the terminal or port. Detention fees are assessed for the extra time a container spends elsewhere.
There are several types of dray services. The classifications include inter-carrier, intra-carrier, expedited, pier, shuttle, and door-to-door.
This form of dray service involves moving goods short distances between separate carriers. An example of inter-carrier drayage is moving cargo from a seaport to a rail terminal for the final leg of its journey, in which the port and terminal operate independently.
Intra-carrier drayage refers to the movement of merchandise within the same carrier company. An example may be moving goods from one dock to another within a single transportation hub for the next leg of the cargo’s journey.
This is the fastest form of dray service. Because of its speed, it's more expensive than other types. Expedited drayage usually includes picking up cargo and delivering it to the next destination within 48 hours.
Pier drayage involves moving containers or cargo from one point to a pier. The point of origin may be a factory, warehouse, rail yard, or other location.
Shuttle drayage may be useful when there is a lot of traffic at a hub or pier. It involves taking cargo or empty containers from an origin point to a parking area to be picked up and taken to its final destination. This helps reduce unnecessary clutter or congestion at the port.
With door-to-door drayage, goods are shipped directly to the customer from a port or rail hub without stopping at a warehouse. This is similar to direct shipping, in which items are sent directly from manufacturer to customer; but door-to-door drayage differs in that the drayage transportation only refers to the transportation from local port of arrival to customer, not the full trip the manufacturer to the buyer. Additionally, drayage typically refers to large container orders—either bulk orders or wholesale shipments—rather than small individual orders.
A drayage truck is typically a heavy-duty diesel truck. Its purpose is to transport containers between ports and nearby destinations. Trucks used for dray services may have reinforced axles that allow them to move heavier loads without causing damage. There are also drayage chassis. Unlike tri-axle trucks or chassis that are for overweight loads, a drayage chassis is more durable. It has a special type of undercarriage or trailer for transporting heavy ocean containers by truck. Also, some drayage trucks may make several trips for large or heavy loads.
Drayage truck drivers often have special training and experience to help them fulfill their responsibilities. Because ports hold significant portions of the country’s imports and exports, reliable dray services are essential. The value of goods that pass through ports every year reaches into the billions of dollars.
Container drayage is the same type of third-party logistics (3PL) service as what was described earlier in the drayage definition. As the name implies, it involves transporting cargo freight in a container across a short distance. The term applies to full containers leaving ports and empty containers returning to ports.
There are several types of fees aside from the potential time-related container fees discussed earlier. Base fees for drayage are calculated based on every 100 pounds of weight. Service providers may charge a minimum freight weight. For instance, if the minimum is 200 pounds, a load weighing 160 pounds would be assessed at 200 pounds. These are the types of fees for dray services:
Fees can vary based on time and other factors. For example, drop fees may be higher if the load stays at the warehouse longer.
If you are looking for dray services to help improve the efficiency of your logistics strategy, we can help. Most freight requires this valuable service at some point in its logistics journey. Contact us at Airhouse to speak with a team member about drayage solutions for your business.
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