Transforming Drayage: How Fast Drayage Rate Quoting Is a Win-Win for All Stakeholders

Drayage is far more than a logistics footnote; it's an essential cog in the supply chain. Sometimes called "the first mile," drayage transports freight over short distances and connects seaports, railheads, and distribution centers. Unsurprisingly, it influences tens of millions of transport operations annually in the U.S. alone.

However, this article explores more than just drayage's function and importance. It demonstrates how accelerated drayage rate quoting can revolutionize this field. Such rate quoting, encompassing factors like container and port drayage rates, promises a strategic revolution. Streamlining the process can maximize efficiency and minimize time delays, promising a win-win situation for all stakeholders. Let's see how. 

How are Drayage Rates Calculated?

Drayage carriers must understand how to calculate drayage rates to improve operations and save costs. However, this calculation isn't a simple task; it's a detailed process considering several variables.

Key Factors in Calculating Drayage Rates

Several vital elements determine drayage rates: shipment weight, distance traveled, and ease of handling with equipment such as forklifts. In addition, the carrier type and any special handling needs also come into play. Carriers typically set a base fee based on these parameters and then refine the rate. For example, they often measure freight in hundred-pound increments (CWT) and adjust the rate based on the level of handling required, always rounding to the nearest hundred pounds.

Additional Accessorial Charges

Drayage rates go beyond the base fee, factoring in various accessorial charges, which can be known or unknown. Known costs, like fuel and toll charges, are upfront, while unknown costs emerge post-completion. 

Special services also contribute to these charges, potentially affecting container drayage rates. For instance, costs tied to chassis use, overweight fees, port congestion, and specific terminal charges are all considered.

Overlooked Costs

Certain less-visible costs significantly impact final drayage rates. For example, detention fees apply when a carrier's waiting time exceeds the standard 'free time,' usually one to two hours. In addition, demurrage, drop, and pre-pull fees are levied for container overstays at the port, bolstering the need for container tracking, later pick-ups, and early terminal pull-outs to avoid demurrage, respectively. Moreover, when the terminal lacks a chassis, an additional chassis split fee may apply for the extra location visit by the trucker.

Different Types of Drayage Fees

Transporting goods involves several associated costs, and drayage is no exception. Thus, drayage carriers must understand the following different types of drayage fees included in the drayage rate calculation.

Flat Rate Fees

Flat rates provide a single charge regardless of shipment size or weight, often favored for short distances or low-volume shipments. To calculate the cost as a linehaul rate, multiply the covered distance by the shipment's weight.

Weight-Based Fees

As mentioned earlier, drayage utilizes a unit called a hundredweight (CWT), which measures the shipment's weight in 100-pound increments. So naturally, more weight means more transportation resources needed, which means higher costs. Typically, average drayage rates per CWT hover between $60-160.

Peak Surcharges

Shipping timing also impacts drayage rates. For example, deliveries scheduled for nights, weekends, holidays, or busy seasons usually incur higher costs than off-peak times.

Accessorial Charges

These are additional costs for extra services or complications during transportation. They can include driver detention time, tolls, fuel charges, terminal fees, and costs related to any special equipment required.

Other Charges

Other potential charges include drop fees if carriers need to leave a shipment for later pickup, pre-pull fees for avoiding demurrage, and chassis split fees if alternate location travel is necessary due to chassis unavailability.

The Role of the Drayage Carrier

We already know the importance of drayage in the supply chain, but what about drayage carriers specifically? Drayage carriers, the driving force behind short-distance goods transportation, connect crucial transport hubs like ports, warehouses, and railways. In further detail, here's how they contribute to the global supply chain.

What They Do 

A drayage carrier operates trucks or similar vehicles, frequently seen ferrying shipping containers along highways. These carriers facilitate the short-distance transportation of goods, acting as a contract, common, or private carrier.  

Impact on Global Logistics

Integral and indispensable to global logistics, drayage carriers strengthen supply chain links by supporting a substantial part of goods transportation worldwide. For instance, in the U.S. alone, they play a central role in moving 53% of imports and 38% of exports by value. 

The Problems and Business Risks Associated with Slow & Inaccurate Rating

Slow and inaccurate ratings can often lead to numerous business risks and complications in drayage. Much of this is due to the complexity of drayage rate quotes which often results in disputed invoices, unexpected delays, and more.

Drayage Rate Quotes are Complex

Drayage rate quotes can be tricky to navigate because both known and unknown charges are involved. Typically, drayage companies will give you a quote that covers just the line haul rates and fuel surcharges. But later on, you might discover additional costs that can complicate the final invoice.

Known Charges

Known charges cover transportation (line haul rates), fuel surcharges, terminal charges, and chassis fees. In addition, extra costs may arise for special loads, like overweight or hazardous items, and tolls.

Unknown Charges

On the other hand, unknown or hidden drayage charges can arise, including chassis repositioning, demurrage for delayed cargo, fees for driver delay, layovers, storage, and actions like yard pull.  

Quoting Example

Picture this: you receive drayage quotes from three different competitors. One quote catches your eye, being $50 less than the others. You decide to go with that company, thinking you've scored a deal. But when the invoice arrives, it was actually $90 more than the quoted price. The reason? An unexpected terminal handling fee.

Reassessing the initial quotes, you find that others had factored in the $90 terminal handling fee. The selected company, however, left this out of their quote, turning an anticipated $50 savings into a $40 loss.

Incorporating all known fees into the quote and estimating unknown charges can help avoid unwelcome surprises and costs. Here, the value of Draying.io’s Carrier Tool, an automated drayage rate management system, becomes evident by enabling comprehensive and accurate rate calculation. 

The Draying.io Carrier Tool: An Answer to the Challenges

The Draying.io Carrier Tool is a robust platform that simplifies drayage operations by streamlining booking, rate, and invoice management. Moreover, its integration with the Draying.io platform provides real-time access to critical data. Thus, as an answer to many challenges plaguing drayage carriers, it significantly enhances efficiency and customer service.

Streamlined Management Features

The Draying.io Carrier Tool effectively eases drayage operations. Its advanced features enable streamlined booking, vigilant monitoring, and efficient communication with shippers and brokers. In addition, this tool provides carriers with detailed rate overviews, empowers them to manage their drayage rates, and simplifies invoice management by allowing easy access and downloading for record-keeping.

Integration With the Draying.io Platform

Through integration with the Draying.io platform, the Carrier Tool offers real-time access to drayage rates and availability, facilitating accurate, swift quoting. The added benefit of automated quoting eradicates tedious manual calculations, and its unified communication platform enhances interactions with shippers and brokers.

Other Key Benefits

Other key benefits of the Draying.io Carrier Tool include enhanced operational visibility for informed decision-making, time-saving efficiencies in managing bookings and rates, and help with managing capacity. Moreover, access to real-time drayage data empowers carriers to negotiate favorable rates, contributing to significant cost reduction.

How the Carrier Tool Makes Carriers More Competitive

The Draying.io Carrier Tool is not just a management tool; it's a strategic asset that can enhance competitiveness for carriers in the following ways.

Attracting Business from Shippers, BCOs, and Forwarders

In logistics, keeping pace with market rates is crucial. The Carrier Tool provides real-time rate visibility for competitive quoting. Simultaneously, its automated quoting system boosts productivity by saving time. Its compatibility with numerous ERP and TMS systems also streamlines operations management, making it appealing to shippers, BCOs, and forwarders.

Building Customer Satisfaction and Loyalty

The Carrier Tool boosts customer satisfaction by enabling carriers to provide quicker, more accurate quotes. Hence, streamlining operations fosters exceptional service, enhancing customer experience and loyalty, which promotes repeat business and long-term success.

Reaping Additional Benefits

The Draying.io Carrier Tool also provides added benefits like improved efficiency and cost reduction. Automating drayage tasks allows carriers to concentrate on critical areas like customer service. Furthermore, with real-time shipment visibility, carriers can deliver exceptional customer experiences, enhancing their competitive edge.

Embracing the Future of Drayage with the Carrier Tool

The dynamic nature of the drayage industry necessitates more than mere survival; it calls for a forward-thinking strategy. The Draying.io Carrier Tool manifests this innovative approach, painting a future with streamlined operations, data-driven decisions, and optimized customer engagements. Carriers that overlook these evolving trends risk falling behind in operational efficiency and market competitiveness.

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Unquestionably, the Carrier Tool's capabilities to reshape operations, from providing real-time insights into drayage rates to enabling efficient quote generation, can pave the way for a robust, future-ready business. To experience this transformative power, book a demo with Draying.io or consult with a supply chain expert today.

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