We live in a multi-modal world. Before a product arrives on your customer’s doorstep, it has probably traveled on several different modes of transport. One of those was undoubtedly drayage.
Though you might not be aware of drayage, it’s a crucial link in the supply chain. Drayage provides the connections that make multimodal freight work.
The better you understand your supply chain, the more efficiently you’ll be able to manage it. Here’s everything you need to know about drayage.
Drayage, Past and Present
Originally, a dray was a type of horse that was used to pull heavy loads. A more common name for this type of horse is a draft horse. These are large and strong horses, such as the Clydesdales that you might associate with a beer commercial. Dray also described the open-sided cart that a dray horse would pull. Drays were usually used to haul heavy loads.
The term drayage was used to describe the process of moving goods in a dray cart. Drayage is also the term for the charge for this type of freight service. The person who performs the drayage is still called a drayman.
In the modern supply chain, drayage is done by truck. Drayage services connect different modes of long-haul transport. This short-haul trucking transfers goods from container ships to rail yards, warehouses, or storage lots. Drayage can also sometimes deliver freight to order fulfillment warehouses.
Drayage also refers to services that move goods very short distances. One example is taking exhibitor display materials from the loading dock into a convention hall. Another is moving products from a delivery drop-off to stores in a mall.
The Role of Drayage in the Modern Supply Chain
A truly local supply chain is rare in modern eCommerce. Most supply chains span multiple countries. Many products are shipped around the globe.
Drayage services are more essential than ever. Global supply chains rely on multimodal transport to ship goods from manufacturers that are far from their end customers. Drayage provides crucial links in this transport chain. These short-haul trucks deliver FTL or LTL freight loads between one form of transport and another.
Multimodal Transport Defined
The term multimodal transport refers to transportation services that involve more than one form of transport. For example, a container full of your products might leave a factory in China by truck. That’s drayage. The truck delivers the container to a port, where it is loaded on a ship bound for the US. Once the ship arrives in the US, the container is loaded onto a truck for transfer away from the port. Drayage services are responsible for taking the container to a rail depot, where it is loaded on a train car. The train takes the container closer to its final destination – perhaps somewhere more inland. Then the container is loaded onto another truck for more drayage services. This final short-haul truck takes the container to a fulfillment warehouse, distribution center, store, or other business. Air freight can also be a segment of a multimodal transport supply chain.
Multimodal transport facilitates global supply chains. A multimodal approach allows you to take advantage of the efficiencies of different types of transport for different segments of the trip. This keeps your transportation costs as low as possible.
Types of Drayage Services
There are several different types of drayage. The Intermodal Association of America lists six different drayage services.
- Pier Drayage. This is trucking to the port. The drayage truck will usually pick up a load at a rail hub and deliver it to a pier or dock for loading onto a ship.
- Intra-Carrier (IMX) Drayage. Drayage trucks may be used to get goods from one place to another within the intermodal transport hub of a single freight carrier.
- Inter-Carrier Drayage. Trucks transfer cargo from one carrier to another. This could involve a transfer from rail to sea, rail to rail, or sea to rail. Drayage trucks will also deliver cargo to long-haul trucking companies that will take it to its final destination.
- Shuttle Drayage. Sometimes a dock or other shipping hub will have more shipping containers than it can hold. Shuttle drayage moves containers to another spot for temporary storage. The shuttled containers can be either empty or full.
- Expedited Drayage. When a load of cargo has to get to its destination quickly and urgently, expedited drayage can truck it there.
- Door-to-Door Drayage. Trucking direct from the transportation hub to the end customer.
Some eCommerce businesses utilize zone skipping to lower their delivery costs. Zone skipping means combining many orders into LTL or FTL freight and shipping them closer to their final destination. This allows products to travel by less expensive freight for most of the journey. When they are off-loaded to a local carrier, the packages travel through fewer zones. This translates to lower shipping costs.
Drayage services maybe be involved to deliver packages to the trucking hub for long-distance shipping. Drayage might also be involved in getting freight from the hub to the carrier that will deliver packages to individual customers.
Multimodal Shipping to Fulfillment Warehouse Locations
Drayage can also be used to get products from a port or a rail or trucking hub to a fulfillment warehouse. When you handle your order fulfillment from a warehouse close to the port, your goods can go from pier to warehouse by drayage.
However, using a warehouse close to a port for your fulfillment can increase both your shipping costs and delivery time. A better fulfillment strategy is to use centrally-located warehouses. From these fulfillment centers, you can ship cheaply to more of the US.
A strategically-located fulfillment warehouse will probably be away from the coast. You might use drayage services to transfer shipments from port or rail to your 3PL services provider. The cost for this short-haul trucking will be more than made up for by what you save on shipping.
Working with Drayage Service Providers
Draymen are sometimes independent contractors. They line up to transport containers each time a ship comes in. Most eCommerce business owners will never directly contract with the truck that takes their products from one mode of transport to another. Many of them work with logistics companies to handle their multimodal transport. Logistics providers are outsourced companies that handle the transport part of the supply chain. This is not to be confused with third-party logistics companies, which manage warehousing, order fulfillment, and customer shipping.
Reduce Your eCommerce Freight and Shipping Costs
Your products travel on a complex journey from factory to fulfillment center to your customers. Understanding each step of that journey can help you find ways to reduce costs.
Ultimately, storing your products closer to your customers is the best way to reduce eCommerce shipping costs. Trucking your products to multiple warehouses is an upfront cost that can save you money in the long run. You’ll ship your products through fewer shipping zones, which can lead to big savings on shipping.
In addition, your customers will be thrilled when their orders are delivered quickly without rush charges. Fast, reliable shipping is the key to consumer loyalty and trust. Your eCommerce success depends on it.