futuristic freight truck, drayage industry

Drayage industry: Current status and future trends

The drayage industry has historically been characterized by high levels of complexity, posing challenges for both drayage operators and their customers.

The complexity arises from the fragmented nature of the industry and the relative lack of standardization in terms of processes and commercial policies, which are compounded by the loose framework within which the industry operates.

Drayage refers to short-haul trucking movements, generally for distances under 50 miles, and as such is a segment of the trucking industry.

Drayage generally involves transporting the container or cargo from the discharge port to the customer’s premises or the rail depot. At the origin, drayage movements involve transporting the cargo from the manufacturer’s factory to the load port. Apart from this, drayage also encompasses movements to and from warehouses and container freight stations.

Drayage is thus the enabler of first and last-mile delivery that most transport vendors nowadays aim to provide, in their quest to provide end-to-end logistics services.

Its importance stems from the fact that almost all cargo discharged from the shipping vessel will need drayage for transport from the port to the customer premises or the next connecting multimodal point.

It is estimated that there are approximately 60 million drayage movements in North America each year, valued at over $50 billion.

The North American last-mile delivery market is expected to grow at a CAGR of 14.85% between 2022 and 2027, driven in large part by the growing B2C e-commerce industry, as well as greater preference for buying online.

Bottlenecks in the Drayage process

The drayage process is fairly straightforward, involving the evaluation and selection of drayage vendors for incoming containers, negotiating and finalizing freight rates, and thereafter sharing requisite information and documents with the drayage operator to enable them to pick the containers and deliver them inland.

There are however some potential bottlenecks in the process which both the importer and the drayage operator need to be cognizant of and take proactive action to avoid.

The more common bottlenecks include:

1. Supply Chain disruptions

2. Port congestion delaying cargo pick-up and delivery

3. Poor route planning and scheduling

4.  Risk of incurring avoidable costs

5. Spate of environmental regulations introduced that can drive up operational costs

Importance of selecting the right Drayage partner

Considering the criticality of drayage to the overall transport chain and in maintaining supply chain integrity at high levels, it is obvious that the choice of drayage operator must be made after a careful evaluation of the drayage operator on several parameters and with due consideration to certain factors.

Awareness of these selection parameters can go a long way in ensuring that the importer partners with the right drayage operator, who has the capability to:

1. Handle the importer’s cargo movement efficiently,

2. Ensure delivery of cargo with minimal lead times, and

3. Help reduce the overall Total Cost of Ownership (TCO).

The increasing role of technology in Drayage planning

Importers are now increasingly turning to technology to streamline the drayage process and operational aspects thereof.

Recent advancements in the fields of AI and ML, coupled with rising amenability on the part of importers and transport vendors to leverage technology, have provided impetus to the development of software solutions targeting the unique requirements of the logistics industry.

KlearNow, which is amongst the notable players in the logtech industry, offers Drayage 360, a dedicated drayage management platform which facilitates the selection of drayage operators in advance, and also simplifies the management of inland movement of containers.

e-Book on Drayage

KlearNow will soon publish an e-Book on the Drayage industry, covering the following aspects of the industry:

1. Origin and evolution of Drayage

2. Market size and future trends

3. Drayage process

4. Common challenges and bottlenecks in the drayage process

5. Factors to Consider While Selecting a Drayage Provider

6. Increasing role of technology in drayage management

The e-Book is intended to create awareness of the drayage industry’s operational practices and help importers select the right drayage partner for their business.

To get the e-Book, please contact KlearNow.

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