Supply Chain Drayage: Insights into Intermodal Transport

May 4, 2023
6 min read

Drayage is a critical step in supply chain management to get product from freight to parcel. See how businesses of all sizes are increasing certainty around drayage to build more resilient supply chains.

What Is Drayage?

Drayage is the movement of a shipping container from a cargo import location, such as a port, to an end location (typically a warehouse). Drayage becomes an important variable during intermodal transportation- when freight is moved using two or more modes of transportation- to ensure the supply chain remains intact and as streamlined as possible. 

Moving cargo efficiently is essential to the success of any supply chain, and drayage plays a vital role. This is especially true given the growth of global supply chains and small to midsize businesses (SMBs) using multiple suppliers. However, global shipping creates the threat of gaps in inventory and shipping delays. Delays early in the supply chain have a trickle-down effect – all the way down to pick and pack fulfillment. While supply sourcing strategies may be optimizing for global supply chains, drayage will always be vital in getting cargo from A-to-B.

Benefits of Optimizing Dryage In the Supply Chain

The importance of drayage in the supply network lies in its ability to efficiently move large quantities over short distances. 

  • Eliminates the need for multiple shipments, allowing companies to reduce their costs and increase their efficiency. 
  • Minimizes costs associated with extended time-in-transit (TNT), including fuel costs
  • Reduces environmental impact of transportation by decreasing the amount of shipments. Of note, environmental sustainability is becoming a growing priority for SMBs and consumers alike according to a 2023 survey.

Drayage also provides companies with greater flexibility in their supply chain. By using drayage services, companies can efficiently distribute their inventory to meet customer expectations for 1-2 day shipping

What are some common costs associated with drayage?

Despite its importance, there are some common concerns about drayage and drayage costs. These include:

  • Base Charges: This is the basic charge that covers the cost of the truck, driver, and fuel.
  • Liftgate Service: An additional fee that is charged if the truck requires a liftgate to move the goods.
  • Detention Charges: Detention fees are charged when the driver is held up at the pickup or drop-off location.
  • Accessorial Charges: These fees cover any additional services required to complete the shipment (e.g. customs clearance, storage fees, security fees, etc.).
  • Overweight Charges: Additional fees may be charged if the shipment exceeds a certain weight limit. Be sure to also calculate the DIM weight of your shipment.
  • Extreme Accessorial Charges: Depending on the type of freight, additional fees may be charged for special services such as hazardous materials handling, refrigeration, etc.

It can be difficult to predict exactly how much it will cost to move cargo. Other factors to consider include: the size and weight of cargo, the type of vehicle used, and the distance of the move. However, having a nationwide warehouse network can improve drayage time and increase certainty around inbounding. 

How An End-To-End Solution Simplifies Intermodal Cargo Transportation

Without a holistic view of fulfillment, SMBs may find that their cost cutting efforts don’t pay off. That’s because a singular focus on reducing costs at the top of the supply chain can lead to increased cost in subsequent steps. 

For example, while it may be cheaper to ship all of your product in a single ocean container, what happens when different products need to be shipped to multiple locations? The labor to parcel out cargo plus the costs of LTL shipments could be more expensive than shipping two small ocean containers with dedicated drayage.

When SMBs choose a 3PL partner powered by real-time logistics data every step of fulfillment is not only accounted for, but optimized. 

Watch: Cephalofair Games Streamlines A Global Supply Chain To Deliver On A Historic Crowdfunding Campaign

See how Cephalofair Game optimizes freight logistics across every mode of transportation from port to customer with Ware2Go.

“[Ware2Go] helped us coordinate everything from ocean freight to keeping track of where containers were…then receiving that product and immediately processing it and getting it out the door.”

––Price Johnson, Chief Operating Officer of Cephalofair Games

Finding the Right 3PL Warehouse Network

With the right warehouse network, businesses can cut down on intermodal transportation to get cargo from import to warehouse as quickly as possible. The right third-party logistics provider (3PL) should provide services beyond just pick-up and delivery to offer a complete warehousing solution. 

Keep this checklist in mind when searching for a warehousing provider:

  • Operates on a co-warehousing model that matches the demand for warehouse space with available warehouse shelves.
  • Warehouses in strategic locations that increase certainty around 1-2 day shipping.
  • Implements a Warehouse Management Solution (WMS) that uses logistics data to optimize fulfillment, including demand forecasting. 
  • Streamlines the entire fulfillment process- from drayage services to pick pack and ship.

To learn more about how a holistic 3PL can optimize logistics from drayage to last mile delivery, contact a Ware2Go expert below.

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