FreightWaves Classics: Drayage is First Mile Logistics (Part 1)

While the drayage function has been around for thousands of years, its importance has grown significantly over the past 70 years, following the introduction of the shipping container by Malcom McLean and his Sea-Land Corporation.

Definition

According to Merriam-Webster, the definition of drayage “is the labor or cost of trucking”. Also according to Merriam-Webster, the first known use of the term “drayage” was in 1791.

Many other sources describe drayage in a similar way. Most agree that in the shipping and logistics industry, “drayage is the transport of goods over a short distance”. They also agree that drayage is often part of a longer overall move. According to Wikipedia, some searches define it specifically as “a truck pick-up or delivery to a seaport, border point, inland port, or intermodal terminal with both the origin and destination of the trip within the same urban area”.

Drayage traffic near the Port of LA.  (Photo: Jim Allen/FreightWaves)
Drayage traffic near the Port of Los Angeles. (Photo: Jim Allen/FreightWaves)

In today’s world of intermodal freight transport, drayage is generally thought of as the transport of containerized freight by specialized trucking companies between seaports or railroad ramps and warehouses or shipping docks. As generally practiced today, drayage refers specifically to movements over short distances as part of the supply chain process.

Again, most sources would agree that drayage is a “key aspect of transferring shipments to and from other means of transport”. While drayage in the United States primarily refers to the movement of intermodal containers from one of the country’s seaports to an out-of-port location, drayage can also refer to a vehicle pick-up to or from an inland point. / border crossing or an intermodal rail terminal.

Further, drayage can also be defined and used as a term for the fees paid for these services. This use of the term is often used in the container shipping industry for international trade.

There are also subsets and different types of drayage (more on that below). However, port drayage is the term most often used to describe short journeys from ports and other areas to nearby locations.

There may also be drayage in large buildings (such as shopping malls and convention centers) when goods are moved from a loading dock to an inland area. For many malls, there may be a centralized loading area where recipients pick up their goods to reduce congestion in roads and parking lots.

For trade shows and similar events, whether an exhibitor ships directly to the show site or to a show warehouse, each company’s exhibit must travel from the loading dock to its respective location on the floor from the living room. Trade shows often employ outside services, delivering cases to each company’s designated exhibit space and returning to the loading dock when the show is over.

An intermodal container being loaded onto a truck.  (Photo: Port Authority of Georgia)
An intermodal container being loaded onto a truck. (Photo: Port Authority of Georgia)

Story

Drayage is as old as shipping. The first forms of drayage have existed since the first ships transported goods from one port to another.

When the term “drayage” first came into use, it meant “carrying by a carriage without sides or with low sides”, or a dray. Wagon carts were pulled by cart horses and were used to move goods of various types over short distances, such as from a dock to a wagon or larger wagon. The distance the carts could be moved was determined in part by the physical limitations of a draft horse. Dray’s activities typically occurred in seaports, extending to canal and railroad terminals. Carts and horses were used from the 1500s to the early 1900s.

As the shipment of imported and exported goods increased, a system to unload ships and move cargo from the dock or pier to a distribution center or a different mode of transportation was needed. As technology advanced, trucks eventually replaced “dray” horses, providing more power and the ability to move goods faster. Eventually, trucks became the standard drayage equipment.

In terms of logistics, the truck refers to the actual vehicle – today a chassis truck – used to perform drayage. A tank truck transports containers a short distance as part of a longer sea voyage. The driver is called the truck driver or, in legacy terms, the trucker.

The Intermodal Association of America (IANA) noted that there are over 60 million cart movements per year. Many loads require drayage both front and rear, and sometimes also in the middle of the journey.

Although drayage is a very small component (in terms of time and distance) of the supply chain, its cost and potential problems can be disproportionately high.

Drayage truck carrying an intermodal container.  (Photo: Port of Los Angeles)
Drayage truck carrying an intermodal container. (Photo: Port of Los Angeles)

Main features of drayage

Drayage is a specialized logistics service that is normally completed in one shift. Other forms of transport take over after a drayage truck moves a container from one port to another location.

Departure and arrival points are usually part of the same metropolitan area, compared to regional or national movements seen in other forms of maritime transport.

In routine freight movement, in which many transportation methods are used for shipment (such as truck and train), drayage occurs when freight is transferred from the truck and placed on the train. At that time, the shipping documents are updated and possibly the freight can be rearranged (split or palletized) for the next leg of its journey.

A line of tractor trailers with intermodal containers with the Port of Tacoma in the background.
A line of drayage trucks leaving the Port of Tacoma. (Photo: Shutterstock)

Different types of drayage

Drayage services are not unique. Drayage is classified according to the services it connects. Each classification is different and only suitable for certain types of container movements. Ultimately, it is up to the shipper to decide which type of drayage is best suited to transporting their cargo.

According to the IANA, there are six different classifications that are used to define drayage. These classifications are universal and are part of the vocabulary of shipping professionals.

Door to door billing transports goods from one location (port, railhead, warehouse, etc.) directly to a consignee (either a place of business or home). This type of drayage is often used in e-commerce fulfillment where door-to-door delivery is offered.

This drayage method works best for goods such as artwork or furniture to ensure safety and minimal damage.

Accelerated Billing is generally the use of road transport for goods or urgent goods. This type of drayage transports goods to where they are urgently needed. Accelerated drayage is a faster process than the other drayage types on this list.

Expedited drayage requires all transportation services to be well coordinated to avoid unnecessary delays in delivering the cargo to its destination.

Inter-carrier drayage refers to the transport of goods between carriers, usually over a short distance. This is the first thing that comes to mind when most people think of drayage. It involves the movement of goods between different carriers or from one mode of transport to another.

For example, inter-carrier drayage may involve transporting goods from a trucking terminal to a rail station, or moving goods from a port where a container has been transported from a ship by truck to a warehouse. .

Drayage trucks move intermodal containers.  (Photo: Jim Allen/FreightWaves)
Drayage trucks move intermodal containers. (Photo: Jim Allen/FreightWaves)

Intra-carrier drayage involves transporting a container over a short distance between different cargo terminals belonging to the same company. For example, a carrier would transport freight from its rail hub to its intermodal hub.

quay drayage refers to the movement of cargo from a yard or storage area to a dock where a ship is waiting for the next leg of the cargo journey. With dockside drayage, a truck uses roads and/or highways to transport intermodal units to a dock or pier from a previous hub.

Shuttle Buses occurs when the originating hub is full and cannot accommodate additional sends. Some units are transported for temporary storage elsewhere. Shuttle drayage keeps containers and the goods they contain safe until there is room for them. Shuttle drayage can also be an inter-carrier drayage phase when containers need to be held at a lot or warehouse until the next mode of transportation is available, whether air, land or sea.

Shuttle drayage is used for loaded and empty containers in the event of overcrowding in the hub.

Sources consulted for this FreightWaves Classics article included: ABCO, AsianUSA, BansarChina, BOA Logistics, Envase, IMF, FreightRight, Globecon Freight, Icontainers, InTek Freight & Logistics, and Marine Insight. Thanks to each of these companies for the information provided.

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