Drayage is an essential service that involves shipping goods over a short distance in between the long hauls of intermodal transport. It's an integral part of the transportation and shipping process. Drayage can be an important component in major industries, such as cold logistics and the container industry. Container companies use drayage to ship a large number of loads, such as steel, automobiles, metals, and so on. These containers can weigh more than 1,000 tons.
Short drayage journeys form a major part of the $50 billion port logistics market. Thus, it's critical for shipping operators and trucking firms to understand the importance and relevance of drayage.
This article will discuss what drayage is and why it's so important. We'll also discuss its classifications and components.
As mentioned, drayage is a key component of transporting cargos for short distances, usually within a city or region. The short transport route by ground freight fills the gaps in intermodal shipping. After a cargo arrives at a shipping port, it may require drayage transport. The journey may range from one port to another, or from a port to a yard or a warehouse. Alternatively, the drayage may also involve trucking to the final destination. The mode of transport can be trucks, ships, or even rails to carry out this short journey.
Drayage forms a crucial part of the logistics supply chain for a host of businesses. It's the process through which your freight makes it from the port or intermodal terminal to the next mode of transport.
As a type of short-distance transport, drayage has an important role in the container industry. It fills the gaps between the long intermodal hauls and may involve shifting the cargo from one mode of transport to another. For example, you may need to shift the goods from a train to a ship, or from a ship to a truck. The process of unloading or loading at a seaport usually will involve some sort of drayage. Cargo transport all over the world requires millions of drayage movements every year.
Now that you have a solid understanding of what drayage is, where it happens, and why it matters, let's look at its different types.
Drayage services are classified depending on their size and efficiency in handling cargo. The Intermodal Association of North America has made some classifications for drayage into the following categories:
Which of these classifications is relevant for you? It depends on the type of shipping you need.
Intermodal shipping involves the transport of goods by a variety of modes—two or more. It uses a combination of shipping techniques, such as ships, rails, trucks, and so on. The container industry often uses special services to transfer goods without needing to unpack them.
For such shipping assignments, drayage is an efficient way to connect these containers from one intermodal point to another. The company in charge of drayage unloads the cargo at the shipyard. Then the company segments it, loads it onto another mode, and takes it to its destination.
For example, let's say the drayage service transfers the cargo for further transportation to a trucker once the cargo unloads at the harbor. Trucks are the most commonly used way to perform intermodal transportation over short distances. An intermodal drayage service ensures that a shipping assignment moves smoothly throughout its journey. It uses the logistics network and the trucking services within that network to transfer goods without any ruckus.
Let's look at the operations of a retailer at a shopping mall to understand how drayage fits in. Retailers also use retail venues and drayage service. Even though a shopping mall isn't as busy as a port, there's still plenty of activity. This small-scale example will help you understand how drayage fits in the bigger picture of all global cargo transport over multiple modes.
In shopping malls, freight goes into and out of stores that don't have external loading areas. For this reason, people have to coordinate the drayage services to unload the shipment at the back of the mall from the delivery truck and then carry it to the store. A common delivery hub usually exists at retail malls to provide services for stores to regularly cover short distances. Thus, a shopping mall depends on this short and efficient transport of goods that connects the store to this transport hub. The drayage service takes over the work to move the freight short distances from the loading dock to the retailer's location.
Let's look at a different example. In the cold chain industry, transporting frozen goods, ice cream, perishable goods, and many pharmaceutical products requires refrigerated shipping. Drayage services are enormously valued because they can provide a cooling mechanism of their own while transferring this cold stuff from one mode of transportation to another. Thus, drayage services work in the background to maintain the prime conditions required to ensure great delivery, even in the small gaps that fill in between multiple long hauls of transport.
Drayage is a significant pain point for most transportation and logistics firms. It's also a massively underserved and neglected part of the supply chain. However, in recent years, many startups and businesses are beginning to offer niche products that address these operations.
The challenges of drayage are different from other trucking methods, such as full truckload and less than full truckload. New technologies, including data analytics and AI, are making drayage more efficient. Container transportation platform startup Dray Alliance recently raised funding to offer an "Uber for drayage" product for the last-mile container delivery process. These solutions will streamline the process to offer quicker deliveries and lower operational costs. Drayage startups will also help minimize container detention and demurrage charges across the international supply chain.
Drayage services are crucial because they efficiently move freight from the dock to the intended space. Though drayage seems to be a small part of the trade supply chain, it performs a vital role that many shippers can't do without.
This post was written by Aditya Khanduri. Aditya currently handles product and growth at Cryptio.co, and he's also built a couple of B2B products. He's proficient in data analysis with Python and has worked with multiple startups in the blockchain and artificial intelligence sector.