What Does Drayage Mean In Shipping?
The basic definition of "drayage" means the transfer of goods over short distances. Ever since the first deliveries of large quantities of goods were shipped, there was still a need for it to get to the final destination point. When the horse and buggy were the main mode of travel, delivery services would attach "dray carts" to their wagons. These carts would eventfully be replaced by trucks and become global logistics companies. This brought world commerce together as international buyers and sellers could rely on their products getting to where they need to be on time.
When the Mayflower arrived in Plymouth on November 11,1620, commerce had been limited to maritime shipping. The original plan of the pilgrims was to settle near the Hudson River in New York but the sails of their ships lead them to New England. Over the course of time many Europeans began to immigrate to the United States and settle in the Mid- Atlantic region due to the economic opportunities found in the ports along the East Coast. The waterways along the Eastern Seaboard snowballed into other types of employment, all because of being in close proximity to the sea, and being closer to goods that were imported from around the world. For example, during the 1800’s New York became the banking center of the United States as a result of the lucrative maritime economy. Philanthropist John Jacob Astor, who owned a fur-goods shop in New York was able to expand to new markets like China from 1800 to 1817. Being situated near the New York Harbor was a big part of the economic success in the United States, both then and now.
Over the course of time, both natives and immigrants began to move in-land and populate the Midwestern United States. Not being near the water ports posed a new challenge for these residents by being quite far from international freight. This meant that these states would have to be more reliant on running an efficient economy that was based on goods and services that were natural to their specific region. Cotton, wheat, livestock, and land ownership were all integral parts of the Midwestern settlers' livelihood. As the region became more lucrative, business owners looked to sell their goods throughout the United States. Many cargo ships traveled up and down the Mississippi River, allowing these settlers to export products from the North to the South, throughout the Midwestern United States. This shortened the time for delivery of goods and expanded their business network.
However, there was still one shipping issue that could still not be addressed. Often the buyer would arrive at the port to greet the goods and the shipment had not yet arrived. This had led to a delay in the time frame when the customer received his or her goods. Sometimes the customer would no longer need the goods and cancel their order. The vendor was left with large amounts of inventory that would have to be sold at a loss.
Drayage Services Save The Day
With the demand for on time delivery “dray services” or “drayage” came to life. These were horse drawn carts or “side-carts” that would receive the goods at the port and deliver them a short distance to the buyer. This meant the deliveries were more reliable as there was now a third party involved that would be responsible for the goods. Business owners would be able to continue to oversee operations without being stuck at a water port. With the motor truck becoming popular in the early 1900’s, the dray horse was replaced by the delivery truck. Today, we may refer to these trucks as FedEx or UPS but they all originated from the “dray carts” that traveled short distances to complete the commerce.
Though this is unconfirmed, there is a term used in the Yiddish language which is spelled “דריי זיך” and pronounced “drey zikh”. The expression is used when someone or something is just “sitting around and doing nothing”. During the early 1900’s many “drayage carts” were manned by Jewish peddlers from Eastern European origin, whose native language was Yiddish. It might have been that when these goods were just sitting around or waiting around and the phrase “drey zikh” was used, the service taking care of this problem was coined “drayage”.
What Are Drayage Shipping Rates?
Not always will a container being shipped to its final destination require one connection. Often multiple trailers will travel short distances to complete the drayage service. One needs to go through the bill of lading and locate the total drayage service charge. Depending on how many short hauls it will take for your container will determine the total drayage rate.
In 1981, the federal government decided to deregulate the trucking industry, making it a wide open market for shipping companies to compete in the transport of goods over a short distance. The Motor Carrier Act Of 1980, allowed trucking companies to set their own prices bringing the prices down through competition. Each carrier wanted to beat out the next for shipping containers to their final destination. The original Motor Carrier Act Of 1935 was totally the opposite. It increased more regulation and required tight government oversight. This was done to ensure safety as transportation of goods were shipped in dangerous conditions. After the deregulation within the shipping industry, it was harder for truckers who were part of unions to negotiate detail of their work environment and wages. Pricing became more competitive and the availability of shipping containers became more economical resulting in a lower price on products for the retail customer.
States like California have instituted a federal grant program called The Zero-Emission Drayage Truck Rule of 2018, that encourages drayage trucking companies to use zero-emission trucks. At first glance, it seems quite generous for the Golden State to provide a grant program for this. However, it’s just a path to pushing their progressive ideas down the throat of hard working Americans. Ultimately, California will require all trucks to produce no greenhouse gases which will make drayage delivery services more expensive.
Why Drayage Services Are Vital To The Economy In The Midwestern & Southern USA.
Drayage is important to all areas of the globe, but being deep into the mainland gives these states a slight disadvantage. Container trucking companies need to be well coordinated to deliver goods to customers on time and on budget. Having a container sitting in a yard or water port costs money, increasing the retail price for these goods. Things become even more complicated when the container hosts a product that needs to be kept at a certain temperature. In that case, there must be a cold storage warehouse available to keep the contents of the container fresh. While the container is in drayage it will remain safe and unscathed when subjected to heat during the warm summer months.
Proper coordination of cargo with companies that move shipping containers will result in on time deliveries. This keeps midland economies going even when demand is high knowing that they can rely on goods being delivered punctually, satisfying the consumers demand. This has become even more important during the COVID-19 pandemic as demand for household items have skyrocketed. Cold warehouses in the U.S. play a major role in delivering goods to consumers during the pandemic and will continue once we are through it. In conjunction with major retailers like Walmart and Target the federal government of the United States ensured that the supply chain was uninterrupted even though many states were shut down.
Challenge Of Delivering The Coronavirus Vaccine In The USA
With the FDA approving the COVID-19 vaccine, logistics companies will need to safely ship many doses throughout the United States in temperature controlled trucks. The Pfizer coronavirus vaccine will need to be kept at -70°C and the Moderna vaccine will need to be kept at -20°C. In order to dispense the vaccine efficiently logistics services will need to communicate with pharmaceutical temperature controlled transport companies for prompt and on-time delivery to healthcare facilities. Heartland states can anticipate getting the vaccine on time due to the United States Army Corps of Engineers being involved in the delivery process. Besides for land delivery, many COVID-19 vaccines will be shipped by air. American Airlines Cargo shipped the first delivery of vaccines from Chicago O’Hare International Airport to one of the U.S. territories in the Caribbean. With close coordination with pharmaceutical companies, drayage services will play a big role in getting the vaccines safely to their final destinations.
Logistics plays a major role in the domestic and international economies. Goods need to be delivered on time and within budget. When a container sits at a port or railyard, the recipient might have to pay extra fees in housing that container. This could clearly be avoided when using a reliable drayage service. For example, one can purchase a container full of electronics on closeout and then sell the products to the consumer at a very competitive price. The owner of the container will anticipate a quick liquidation of inventory resulting in a good healthy cash flow. If the container gets delayed at a port complex you can have a whole association of fees that gets added to the product cost. This makes it harder for the owner to be competitive on pricing due to the newly incurred expense of the container sitting around the rail yard. The more logistics are run efficiently, the cheaper it will be for the cargo owner resulting in lower pricing for the end user. Drayage plays a major role in our domestic and global markets, and it’s vital for cargo owners to have an efficient container delivery service.