Drayage: The Daily Definition
What is drayage?
Drayage refers to the transport of goods over a short distance. It is often part of a longer overall move, such as from a ship to a warehouse, and most shipping agencies associate it with moving container freight.
Drayage typically takes place within one metropolitan area, where trucks transport containers between ports, rail yards or other shipping hubs. This service is in high demand in large port cities, such as Los Angeles, Miami, New York, Baltimore, and Seattle.
Fun Fact: The term “drayage” evolved from the word “dray,” referring to sideless carts pulled by horses. Dray horses transported these carts over short distances due to strength limitations. Eventually, delivery trucks replaced drays and horses.
Say you purchase your inventory from overseas. Your vendor ships several containers on an ocean freighter, and a freight yard in New York City receives them. A crew at the freight yard unloads the containers from the ship and moves them to a rail yard by truck. From the rail yard, a train carries the containers across the country until they reach their final destination: your warehouse.
The above example uses intermodal shipping (shipping with more than one mode of transportation), and the step where the containers are moved from the ship to the rail yard would be considered drayage. It’s just a quick stop on your inventory’s journey.
Our two cents:
Drayage plays a substantial role in the entire supply chain. As of 2009, 90% of non-bulk cargo worldwide is moved by containers stacked on transport ships. Fast, safe transport of your cargo keeps overall transit costs down and offers lots of flexibility. Sticking with just one mode of transportation locks you into a rigid shipping regimen that may be difficult to accommodate.
It’s likely the case that drayage is already part of your shipping/receiving operations. You may not even be aware that it’s happening when you purchase goods, but if you’re paying for drayage costs, you probably want to factor them into your inventory margin and profitability. Consider freight consolidation as a shipping strategy too. Effective shipping operations start with sensible cost management, and there are lots of things you can do to keep costs under control.