The Ultimate Guide to Drayage – Container Drayage Services
Moving your goods through drayage: Drayage assistance during the holiday madness
The holiday season is a crucial period for all supply chain stakeholders, but post-pandemic port congestion has caused severe and unforeseen issues for many, including a valued consumer package goods customer of VPL.
With inland-bound rail service cut short—and even halted on some lines—and a growing glut of port overcrowding, the customer’s Midwest-bound ocean container shipments for the bountiful holiday season were in jeopardy. Fortunately, VPL used creative problem-solving and some specific resources to find a solution.
VPL’s advanced technology allowed it to follow shipments and continuously track their status. VPL combined that information with availability within its network of warehousing and transportation providers to create a seamless end-to-end solution that delivered customer shipments to the Midwest in time for the holiday season.
As a third party, VPL can provide comprehensive logistics assistance with container tracking from the port of origin to arrival in the United States, all drayage operations, transloading, and truckload transportation to the destination—the Midwest in this case. Although each segment of the freight lifecycle posed unique challenges, VPL was able to streamline services and maximize capacity due to the relationships and network it had built over the years.
For the customer, the result was on-time delivery and avoidance of delays and missed shipments that would have put a damper on its most prosperous quarter of the year.
Shippers Need Options
It feels like anything can happen in this sector of the industry. Every day, situations call for ongoing, out-of-the box thinking. With a good understanding of cost structure, a robust rolodex of carriers, and relationships with many supply chain stakeholders, VPL has the resources to engineer solutions that go beyond what shippers can do on their own.
For example, we can figure out that a shipment picked up on Monday instead of Friday might save three days of layover—and any associated costs—because we know the rules and players well enough to handle any number of snafus in drayage operations.
A shipper may want to deal directly with a carrier if they believe that doing so would result in more favorable pricing and terms. But when it comes to drayage operations, a 3PL provider can tap into its network of carriers on behalf of the shipper. If a specific carrier happens to be unavailable, and that unavailability would greatly influence the time and place of critical loads, VPL is capable of finding another available carrier to ensure the shipper delivers on their promise. A third-party brokerage provides value that is unique to drayage operations in this and many other scenarios.
Technology Applications for Drayage Operations
In providing drayage services, visibility and control are key watchwords. Investments in technology help achieve both.
By investing in technology, VPL has insight into cargo status and can act on problems before they occur or worsen. VPL also uses technology to determine real-time rates, providing insightful information to make informed decisions.
Technology increases all supply chain stakeholders’ visibility into drayage operations. The data it provides is crucial when applied to efficiency of drayage because it equips key decision-makers with the insights needed to reduce the time it takes to move a container from ship to distribution point via drayage, thus reducing overall transportation cost.
It's no secret that investing in technology can improve the efficiency of just about any operational challenge. However, investments in technology for drayage transportation have lagged considerably behind those for truckload.
VPL believes this line of thinking is out of date and remains proactive in its approach to applying technology to drayage. Specifically, we have extended our own IT infrastructure used for other logistics management, allowing us to apply it heavily toward drayage operations. We also have invested in drayage-specific technology that provides insight into rate analytics to help us leverage the best rates for our drayage clients. This investment separates us from our competitors.
California as a Case Study for Political Disruption to Drayage Operations
Another threat to drayage operations looms large: state politics. Look no further than California, where pending legislation and labor talks appear likely to upend efforts at the ports. AB5, which calls for independent contractors to be classified as employees, may take tens of thousands of truck drivers off the road, placing further strain on the supply chain, especially at the ports.
On top of that, new emissions standards are set to take effect on January 1, 2024, after California adopted the Heavy-Duty Engine and Vehicle Omnibus Regulation on December 21, 2021. Efforts to meet these standards are expected to result in overall truck capacity being reduced by up to 25%. Meanwhile, labor disputes are ongoing between West Coast port managers and dockworkers. Without an agreement in place, shippers need to be mindful of potential interruptions should talks go sour.
VPL pays close attention to all outside factors that could impact drayage so you can rest assured that your shipments have the best chance at navigating the choppy politics at the ports.
Drayage Operations Are Constrained in Today’s Supply Chain Environment
According to the American Trucking Association [https://www.trucking.org/supplychain], truckers need access to three things for efficient drayage: information, equipment, and space. “Currently, there is a lack of all three. Information sharing is extremely disjointed; chassis are unavailable; and there’s no physical space—both in nearby warehouses and portside—for truckers to deliver loads and return empty containers and chassis. More trucks and longer hours only help if truckers have real-time information to make pickups and returns, have chassis to move containers, and have somewhere to drop freight and return equipment. ”
There’s perhaps no more opportune time to seek better ways to move your load through the frustrating facet of drayage. In the eyes of VPL, smaller and mid-sized shippers are important shippers. They’re the ones we have helped and continue to help.
Don’t Do It Alone
Drayage entails the movement of shipping containers from marine terminals and ports to inland ports, inland railroad heads, distribution centers, and, sometimes, retail outlets. It is a complex and fragile part of supply chain logistics. Any disruption or holdup during drayage will ripple through the entire supply chain, which is what makes a third-party logistics (3PL) provider such an essential partner. A 3PL provider can resolve problems before they occur, and they bring a level of situational awareness that helps them make smart decisions or change course where and when necessary.
VP Logistics (VPL) constantly monitors the state of container logistics and drayage operations. Right now, it’s not pretty. Challenges abound at ports and the marketplace is reacting to these challenges in ways that can be difficult to predict. As we explore the outlook for drayage operations, keep in mind that we aren’t just experts in drayage, we’re advocates for shippers, carriers, and other key parties along the supply chain.
Who Benefits Most from Assistance with Drayage Operations?
Any party that is wrapped up in global operations or wading knee-deep in the uncertain port logistics of today’s supply chain can benefit from the assistance of a 3PL provider for drayage, but smaller and mid-market shippers stand to benefit greatly from an attentive 3PL provider that understands drayage management.
A common frustration is when cargo capacity is consumed by large shippers—often names we all know—that move to the head of the line because they have the shipping volume.
In VPL’s experience, mid-market and smaller shippers tend to get less attention at terminal yards. VPL, however, values the smaller to mid-size shippers and works hard to provide an even higher level of dedicated support than the largest shippers receive.
Those who have an advocate within the complex web of drayage have a voice for their shipments and, perhaps, alternative options that can cut through the chaos. This is especially true for mid-market and smaller shippers that lack buying power but still need to serve their customers just as promptly as the largest of shippers.
One key to cutting through the chaos is a simple but often overlooked tool between shippers and those who represent them: clear communication.
A strong, lucid communication pipeline that informs shippers of the location, time, mode, and volume of their freight is crucial. This is true for chassis availability, labor issues, incurred charges, demurrage and detention of chassis, and other information. Great communication can save the day and avoid subsequent problems. It also eliminates surprises to keep costs down and avoid abrupt, adverse news that may blindside a shipper.
For example, just when all seems well, the shipper receives word: “Hey, storage on this shipment is going to start at $100 a day on the tenth, and it’s going to increase to $200 on the fifteenth.” Without timely, clear communication, such delays mount and unforeseen charges build.
A 3PL will keep you apprised of your shipments to ensure a smooth and seamless flow of goods.
Why Is It Important to Have a Third-Party Expert Looking After Your Cargo in Drayage?
Short answer: There’s a conundrum at world ports now that shows no signs of clearing up soon, so do-it-yourself drayage oversight is high risk.
To expand on this response, it’s worthwhile to explore some of the many changing dynamics and challenges associated with drayage operations. For one, there’s still a backup at many (if not most) ports around the world, from Asia to the western and eastern ports in the United States. Most terminal and port operations struggle with this congestion as well as the optimal positioning of chassis to support container movement.
It is well known that there’s a nationwide driver shortage; there has been for some time, and the shortage is only expected to worsen. But there’s also a driver shortage specific to drayage services.
According to market researcher Technavio, a shortage of drayage drivers exists and “will be a major challenge for the drayage services market [through 2025]. Products in this supply chain need to be delivered to different destinations within a short duration.” This shortage of drivers for the drayage services market affects drayage operations, supply chain movement, and overall commerce through ports.
The driver shortage and tightening of truck capacity appear to be getting worse, and the drayage industry feels those effects.
Since drayage is only a small part of the end-to-end supply chain, 3PL providers have not always embraced drayage management as a viable part of their service business.
According to Technavio, “The drayage services market is fragmented, and the vendors are deploying organic and inorganic growth strategies to compete in the market.” Technavio forecasts a steady growth in the drayage services sector of about 2 percent per year over the next few years.
VPL is a leading 3PL provider with specific experience in drayage operations at all ports and inland rail ramps to cut through the chaos in this segment of the extended supply chain.
Avoiding Demurrage During an Environment of Strained Capacity
A major shipper faced a demurrage charge from over 50 containers at the port of Los Angeles. The shipper partnered with a carrier that delivered news of a lack of chassis capacity to move those containers, so they turned to VPL for help.
The Los Angeles container terminal operation is one of the busiest in the United States. VPL, drawing from its vast network and resources, was able to leverage its dynamic capacity system to monitor available carriers in the market that were listed as full capacity but had last-second cancellations. This provided a window into driver availability and allowed them to attend to the containers and move them further down the supply chain. As a result, the containers that would have been stuck for weeks were moved, and additional demurrage charges were avoided.
In this scenario, VPL’s nimble network capabilities provided a capacity solution in the strained Los Angeles market.
Need Help with Drayage Operations? Let's Talk!
VPL is a full-service, 3PL provider that stands ready to help you deliver the goods.
With over 15 years of experience and logistics expertise, VPL is prepared to support the transport of your commodities, no matter the size, shape, or product type. What exactly can we help with?
- Truckload, less-than-truckload (LTL), and partial loads
- Temperature-controlled commodities and shipments
- Expedited freight via nearly any transport mode (dry vans, chassis and flatbed, low boys, all dry van conveyance, and most any type of specialized solutions)
- International shipments
- Intermodal transit
- Drayage freight capabilities
Plus, we have solid relationships with an arsenal of carriers to get your load booked in times of limited capacity and supply chain strains.
To explore how we can help drive incremental value for your organization, give us a call at (855) 847-7251.