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What is Drayage?

Jun 27, 2022Introduction to Trade

What is Drayage?

If you’ve ever been to a port, you’ve probably seen trucks driving in and out with containers on them. This is called Drayage. It’s the process of moving goods from ships to warehouses or distribution centers. In this blog post, we will discuss what drayage is and how it works!

The Evolution of Drayage

Drayage is the process of moving goods from ships to warehouses or distribution centers. The term ‘dray’ originates from the horse carts that were used to transport cargo in the early days. Drayage would involve horses carrying cargo over short distances in the old days.

The biggest downside of this mode of transport was the long time horse carts took. Service providers addressed this issue by switching to trucks for drayage. The growing usage of electricity in commercial operations and the emergence of combustion engines in 1860 meant that, by the late 1800s and early 1900s, trucks became the most common drayage carriers in shipping. Even today, service providers widely use trucks to move goods from warehouses or manufacturing facilities to ports and for last-mile deliveries.

Recently, freight forwarders and other service providers have started using technology to improve the transparency and sustainability of drayage services. This adds to the long list of benefits drayage already brings to shippers and service providers. Thanks to these advancements, drayage is a more efficient and reliable process than ever before.

Importance of Drayage

Drayage is one of the most important aspects of maritime logistics. The right drayage service provider can make a huge difference in the efficiency and reliability of your operation. Here are some of the benefits that a reliable drayage provider can bring to your business:

  • Avoid congestion at ports
  • Expertise in moving goods safely
  • Greater visibility and control over the logistics process
  • Minimization of supply chain lead time
  • Focus on core operations.

Drayage is an important aspect of maritime logistics, and the right drayage provider can bring many benefits to your business, including avoiding congestion at ports, expertly moving goods safely, and minimizing the lead time of your supply chain. When choosing a drayage provider, be sure to select a reliable and experienced company that will have your best interests in mind.

What Does Drayage Include?

Drayage includes the transportation of merchandise over short distances, as well as the payment for this service. Drayage covers all situations where trade goods are moved from one location to another across town or county. This might include anything from moving a container from one warehouse to another in the same city, shipping a shipping container from a trader’s warehouse to the port, or even delivering goods from a manufacturer to a customer’s doorstep.

Different Types of Drayage

The following are the different types of drayage. Its classification depends on the origin of goods, breaks taken during shipping, and the end destination, among other factors.

  • Inter-carrier drayage: This includes the transport of goods from one type of carrier to another. For example, goods might be moved from a shipping port to a railway terminal, and then transported to another railway terminal.
  • Intra-carrier drayage: This involves transporting goods within the intermodal hub of a given freight carrier. For example, goods transported from a rail hub to an intermodal hub where both are owned by the same freight carrier.
  • Expedited drayage: This involves the transport services provided when goods must be delivered urgently and within a short time.
  • Pier drayage: This comprises transporting goods from a port to an intermediate transportation hub like a rail or a bus hub.
  • Door-to-door drayage: This classification includes goods moved directly from a storage facility to the end customer’s residence.
  • Shuttle drayage: This drayage includes the transportation of goods from an overloaded transit storage hub to a storage place wherein goods will be temporarily kept for a short period before they are moved.

Drayage in the Supply Chain: A Look at the Role of Drayage

Drayage is an important link in the supply chain, connecting phases and stakeholders together. Shippers would have to transport their products themselves if they didn’t have drayage services, which would lead to a slew of issues. Drayage services help shippers avoid damage to goods during shipment, minimize lead time, and reduce port congestion.

How Are Drayage Fees Calculated?

The cost of drayage services depends on a number of factors, including the distance between the origin and destination, the weight of goods being transported, the ease with which goods can be transported (using forklifts, trucks, or pallet jacks), and the type and packaging of goods. In addition to base fees (which are calculated according to the four factors listed above), drayage providers may also charge for variable accessorial fees. These additional fees can include charges for chassis split (when a carrier has to spend time and fuel to travel and purchase a chassis for transportation when one is not available at the container site), detention and demurrage (when a carrier exceeds the allotted free time for picking up or dropping cargo at a port), fuel and mileage, and pre-pull (when a carrier cannot deliver a package to its endpoint and ends up storing it in their yard overnight or for a certain period of time). The exporter is typically responsible for paying all accessorial fees.

When calculating drayage fees, freight is generally weighed using a metric known as the hundredweight (CWT). The base rate is calculated by multiplying the rate set by the service provider by the number of CWTs. CWT always begins at one for goods weighing up to 100 pounds and then increases in increments of 100 pounds for every additional pound over that weight. For example, if the goods collectively weigh 101 pounds, then the service provider’s price will be two CWTs (calculated as one CWT for the first 100 pounds plus an additional CWT for the excess weight of one pound).

To calculate the total cost of drayage services, simply add together the base rate plus any applicable accessorial fees. Keep in mind that fuel surcharges may fluctuate on a monthly or even weekly basis, so it’s important to get an estimate from your drayage provider before shipping your goods.

What is the Difference Between Drayage and Cartage?

Drayage and cartage are both terms used to describe the process of transporting goods from one location to another. However, there are a few subtle differences between the two. For example, drayage generally involves transporting entire containers, while cartage may involve breaking down the different elements before transporting them. Additionally, service providers who offer drayage services are typically required to follow guidelines set by the Internet Assigned Numbers Authority (IANA), while those offering cartage services may not be subject to such guidelines. Finally, cartage usually entails the hiring of an agent for communication, whereas drayage does not always need one.

Ultimately, both drayage and cartage can be useful methods of transportation, depending on the specific needs of the individual or business involved.

What is the Difference Between Drayage and Intermodal Shipping?

Intermodal shipping involves multiple modes of transportation, while drayage only takes place via roadways. Usually, drayage is a constituent component of a larger shipment-related supply chain that culminates into an intermodal shipment. Intermodal shipments are complex operations that require the participation of a freight forwarder. Drayage, by contrast, can be handled by a standard third-party logistics (TPL) service provider.

Conclusion

Drayage services are important for bringing goods closer to their destination, and can help lead to customer satisfaction. Drayage may go unnoticed occasionally, but it is a crucial service for traders. When drayage is executed competently, it can lead to happy customers and successful businesses.

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