05/22/2023 by Candous Parker
Have you ever wondered what drayage is? Perhaps you hear the term mentioned by other shippers, motor carriers, or your logistics providers. You’ve likely heard some other terms associated with drayage, like demurrage or drop fees, and are curious what those are. Well, if drayage is piquing your curiosity, we’re here to help you learn what it is and if it’s for your business. Here are the most asked questions we receive about drayage from our shipper relationships.
This is a great question. You’re probably wondering, what does drayage even mean? Essentially, drayage is the local movement of a container from point A to point B, usually less than 100 to 200 miles. Point A and point B can be moving it from a terminal or port to a receiver or from a shipper back to the terminal or port location.
There are two different forms of drayage – imports and exports.
For example, let’s say you have an imported container coming into the U.S. from another country into a terminal, like Los Angeles. As your third-party logistics (3PL) provider, we help you arrange the move of that container to be picked up by a drayage carrier at the terminal and transported to its destination or receiver.
Now, for the second example, let’s say you have freight that you need to get transported on a ship from the U.S. to another country. As your trusted 3PL, we’ll help arrange a drayage carrier to assist you in getting your freight to the port. That drayage carrier will pick up an empty container from the terminal and bring it to your pickup location to get loaded. Then the drayage carrier will take the container with your freight to the port to be loaded onto the ship.
The term dray refers to the movement of freight in a local setting, so a very local move. The word dray stems from moving freight or something heavy in a cart or wagon with no sides. This used to be done using horses, so you’d have dray horses moving dray carts. However, now the containers have replaced the carts, and trucks have replaced the horses, but the movement of freight still refers to a short, local move.
Drayage itself is the movement of the freight. But what is the freight? The freight is the actual product being moved via drayage.
First off, it’s pronounced like “duh-mur-uhj”. As a customer, you may see or hear the term demurrage from time to time. Essentially, it’s a storage fee.
Once your container arrives at its terminal or port, they are going to give you a certain number of days in which your container can sit there for free.
For example, let’s say you have three free days. Your container arrives on June 5th, so you have June 5th, 6th, and 7th, in which your container can sit there, free of charge. Once June 7th approaches, that is called your Last Free Day (LFD). LFD is a term you will hear very often. Once it’s June 8th, that is going to be the first day of demurrage, or the terminal or port charging you for storing your container and taking space in their yard.
You may be wondering, what’s the big deal with drayage? Why do I hear this term so often? What do I need to know about drayage?
Drayage is important because it’s another mode, another way to move your freight. Instead of a standard truckload or less-than-truckload (LTL), it’s another way to get your freight overseas to its destination in the U.S. or from the U.S. to overseas. Really, it’s another way to reach your market or suppliers that may not be located here in the U.S.
This is important, as you want to know all the fees you may incur. You may be told that there’s a drop fee on your shipment. In a traditional shipment when picking up or delivering, they are being loaded or unloaded right then and there. This is what we call a live load.
In drayage, if a receiver says, “I need you to drop this container today, but we likely won’t be able to unload it until tomorrow. I’ll let you know once we can unload it and then you can come back.” This is where a drop fee comes in. Since the drayage carrier will have to drop the container and then come back to pick it up, the drop fee is a charge by the carrier for having to come back and pick up the empty container to return it to the terminal or port.
You want to make sure you’re having conversations with your logistics provider to get a full understanding of what’s needed for that container. Are they loading and unloading live or is it loading and unloading as a drop? That way you know whether to expect any drop fees.
A chassis is the underbody of the truck and container. It’s what the container sits on. Pickup trucks have chassis, as do your 53-foot dry vans.
Drayage carriers do not own chassis. Instead, the drayage carriers must rent the chassis from the terminal or port. Once the drayage carrier has the chassis hooked on, a crane will load a full or empty container onto the chassis for them to transport.
Every drayage carrier has slightly different weight limits, but universally there are some general limits.
First off, you have different types of containers and sizes. The standard sizes are 20-foot and 40-foot containers, and you have refrigerated (also referred to as a reefer) or dry containers.
Refrigerated containers will be able to hold a little less than your dry containers because reefer containers hold heavier freight, like frozen goods. They also sometimes have generators connected to them as well, taking away from the amount they can carry.
A 20-foot refrigerated container can hold up to around 36,000 to 38,000 pounds.
A 40-foot refrigerated container can hold up to around 38,000 to 40,000 pounds.
A 20-foot dry container can hold up to 38,000 to 40,000 pounds.
A 40-foot dry container can hold up to 42,000 to 44,000 pounds.
Make sure you’re having a conversation with your logistics provider to get a full scope of the weights that can be handled so your freight can be loaded correctly on those containers.
Well, if you’re reading this article, you might be considering drayage because there may be some point at which your business will need it. It’s a great mode and tool to have when you may be talking to other suppliers overseas. Drayage is one way to service them. For example, with drayage, you can say, “Not only can we get your freight from Germany to California, but we can do that final mile delivery for you as well.” It gives you more to offer your partners and another way to move your freight.
As a customer of Trinity Logistics, we want to make sure we’re transparent with you and that you understand all the different charges that you may see or come across.
Typically, you’re going to have three charges that you’ll see on most of your drayage quotes.
First, there’s your line haul. That’s moving the freight from point A to point B.
Then, there’s your fuel surcharge, which is a percentage of your line haul for fuel expenses.
Lastly, there’s the chassis charge.
As far as any additional charges, your Trinity relationship will provide you with a list of any potential charges that may arise, such as that overweight fee, drop fee, hazmat, or refrigerated fee. We want to make sure you know exactly what you’re being charged so there are never any surprises.
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