Drayage is the procedure of moving containers across ports, rail yards, warehouses, and other facilities. These movements of containers can be short or long-distance. Container drayage is part of the intermodal transport system and is in high demand at ports along the coast. It is an essential part of the logistics industry as more brands ship internationally.
Drayage is vital to the intermodal system because it facilitates the movement of goods across modes of transportation. It helps businesses move their products across oceans, highways, rail systems, and everything in between. To excel in drayage, you have to understand what drayage is, and some important fees and definitions.
How is Drayage Calculated?
Drayage can be calculated differently depending on the carrier and your relationship with them. Most companies will use the same factors when calculating drayage costs. The most common factors include:
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Total weight of the shipment
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Type of packaging
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Distance from origin to destination
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Transportability (able to be moved by forklift, pallet jack, etc.)
There are accessorial fees that can be added to the costs. Some companies may already include them, while others made add them on after service. When looking at drayage pricing, it’s important to speak with the carrier ahead of time to understand all the different fees and costs and what you will have to pay and what could be added on due to delays or changes.
Drayage Fees
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Demurrage – Charge assessed when a container sits at the port for longer than the allowed free time. These fees must be paid before the cargo is picked up from the port. Once again, advance planning is your friend.
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Detention/Per Diem – Charge assessed when a shipper uses equipment past its free time, typically outside of the port. Keep in mind that just because you have picked up your container from the port, the clock is still ticking, and you have a set amount of free time to return the equipment to the port.
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Driver detention/waiting time fee. –If you delay the drive during loading or unloading, you can get charged a driver detention/waiting time fee. Delays for drivers can eat up their driving hours, reducing their efficiency. Drivers have only 14 hours to work (11 hours of drive time) once their clock starts before they have to take a mandatory 10 hour break. Typically these charges are assessed when a driver is delayed by more than an hour or two. Partnering with a provider that can effectively manage this for you is key.
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Chassis Split Fees: A chassis split occurs when the container is not located in the same place as the chassis. The Trucking company may asses a chassis split fee to cover the cost of taking the chassis to the container location. this can occur if there is no chassis available at the port or ramp.
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Pre-Pull Fees: These charges occur when a trucker picks up a container from the port but does not get it loaded or delivered the same day. The fee occurs because the carrier will have to store the container in their yard. Usually this is done to help the customer avoid demurrage charges at the port.
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Drop Fees: A drop fee is charged by the trucker to drop off a container at the warehouse and pick it up after it has been loaded and unloaded instead of doing a live load and unload. This usually happens when the product cannot be unloaded quickly. This fee can also be called a bobtail fee.
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Overweight fees: If your container is over a legal weight limit, you could be charged permit fees or other overweight fees for the movement of this container.
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Storage: If a carrier has to store a shipper’s delivery for whatever reason, the carrier will charge a storage fee. This fee can either be charged by the hour or by the day depending on the carrier.
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Terminal Charges: Specific terminals and ports may have their own set of fees and charges for movements of containers. It’s important to find our beforehand if a certain port you are using charges extra fees.
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Fuel Surcharge: Charge for fuel, especially if fuel costs have significantly increased
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Toll Fee: If your carrier has to pass through a toll while completing a drayage service, that fee will be passed along to the shipper.
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Limited Access: This fee will be charged when a delivery point is difficult to access.
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Liftgate Service: This fee will be charged when a liftgate is needed to deliver goods when a loading dock isn’t available. A liftgate may be required when the cargo weighs over 100lbs and there is no dock. Most freight trailers don’t include liftgates unless they’re required for a specific delivery.
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Additional Stops: If a shipment has more than one destination and the driver has to make numerous stops, the carrier may charge you an additional stop fee.
Drayage Terms
- Chassis: A chassis is a special trailer or undercarriage used to transport ocean containers over the road.
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Transloading: This is the process of moving a shipment from one mode of transport to another
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Availability Time: The time equipment is grounded and available for pick-up by the customer
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Container: Resembles a truck trailer but does not have any wheels. Designed for any type of intermodal transport. Must be lifted from each mode of transport.
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Dead Head: The long-distance drayage movement of equipment that is needed to pick up a load.
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Gross Weight: The full weight of the shipment that includes all packaging and materials that are with the shipment.
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Intermodal: Transport of freight made by two or more modes of transport.
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Tariff: a tax on imported goods
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Stripping: This process in which cargo is removed from the container
It can be difficult to manage different relationships and agencies when handling your supply chain, especially when planning transportation for your products. Understanding all the different fees and terms can be stressful. Outsourcing drayage to your 3PL ensures you have experts on the job and ensures yours is back on your core business.
At Smart Warehousing we can get your containers off the ship, port, or railcar and into our warehouse by simply sending us your arrival notice. Smart leverages strategic freight broker relationships to get your containers moved quickly and efficiently. Save money and time by having a 3PL manage your drayage and transportation all while having full visibility and control of your products in real time in our warehouse management system, SWIMS.