Drayage, in its simplest form, is the transportation of freight from an ocean port to its initial inland destination. These moves tend to average no more than 50 miles, taking containers to rail yards to be put on a train or sending them to nearby warehouses to be sorted, segmented and routed to their next destination.
While the distances are comparatively short, the logistics of routing 11 million maritime containers in and out of ports every year has its full share of challenges.
Below are four facets of drayage logistics that are often difficult to manage — and some FreightTech providers’ solutions.
Before drayage movements can even take place, containers need to reach their destination ports. Without visibility into those containers’ locations, shippers cannot plan inventory or optimize warehouse teams, and most importantly, they may lose customer satisfaction with late deliveries.
Project44 CEO Jett McCandless explained how his company brings visibility to shippers looking to plan properly for incoming containers.
“Our AI-powered algorithms process a massive amount of data for the most accurate predictions of when those containers can be picked up. … Those same advanced algorithms are integrated with hyperaccurate vessel sailing schedules and detailed cargo rolling data to help the shipper select the best possible carrier and vessel booking to avoid the worst of the port congestion,” he said of project44’s ability to integrate with its recently acquired visibility partner, Ocean Insights, to optimize the container planning process.
Project44 went a step further for customers this spring, providing visibility into Asia, where many customers’ supply chains began.
“With the Ocean Insights acquisition, project44 became the world’s leader in ocean visibility, much of that product coming out of Asia Pacific,” said Chief Product Officer Vernon O’Donnell. “The inevitable next step for us was connecting that first leg of the journey in China, and that really became even more pressing for us to get done.”
Also vital is the right visibility software, which has quickly become table stakes in the world of FreightTech. Companies like freight forwarder platform Logixboard are helping customers offer a customized visibility experience for global shippers. The company is able to provide better insight into their drayage logistics, with very little onboarding time.
“Freight forwarding companies reach out to us as more of a defensive mechanism,” CEO Julian Alvarez told FreightWaves. “They’ll tell us, ‘One of my biggest customers is threatening to leave if we don’t have this digital experience.’ The great news for them is we’re able to solve for that and implement that quickly.”
Much like personal travel, moving goods across borders can be overwhelming. Incorrect documentation, inaccurate payments and misclassification of products are just a few circumstances that often prevent shipments from reaching their final destinations.
In personal travel, most documentation is the same across borders. In drayage, the lack of standard paperwork processes in global shipping can hold up shipments once they have reached their port of destination.
The global trade platform Flexport recently partnered with application provider Scale AI to manage and improve customers’ international paperwork processes and better prepare them for customs clearance.
“There’s a lot of different document types in international shipping, like commercial invoices, bills of lading, airway bills and arrival notices. Almost every logistics company I talk to isn’t getting the results they’re looking for when it comes to document management, because the solutions in the market today are designed for perfectly executed paperwork,” said Melisa Tokmak, the general manager of document AI at Scale AI.
“In the world of logistics, that’s not happening. Sometimes words are crammed. Sometimes it is very hastily submitted or submitted as a photo. These are very complicated documents, because you’re including customs information descriptions, amounts and unit prices.”
Using document managing systems like those Scale AI has created for Flexport, customers eliminate delays in drayage caused by paperwork issues.
“The moment you have any conflicting information across your documents, you are increasing the chance of containers being opened by customs, and that has incredibly downstream metric effects on your trucks, the warehouses waiting for the goods and overall decreasing customer sentiment,” said Tokmak.
Delays for reshuffling
A study by Assistant Professor Amir Gharehgozli at Texas A&M University found that one of the biggest delays in maritime shipping comes from reshuffling or shifting containers at ports of destination.
Gharehgozli, an industrial engineer, found that the more dedicated the stack of containers was to a specific destination, the fewer reshuffles were needed throughout that ship’s journey.
Turning this concept into a technology solution is the drayage platform EDRAY, which uses the volume leverage of its customers’ containers to stack all of those containers together, enabling the company to optimize the carrier capacity needed to make these pickups.
“Let’s say a company has 200 containers coming in this week. Now they are teaming up with other shippers to bring in 1,000 containers and combine all of the drayage carriers available, bringing more capacity for a more efficient pickup without having to wait and incur detention fees,” said industry entrepreneur Andrew Leto, who recently invested $7 million in the platform.
Related article: EDRAY receives $7M to improve port logistics through flow stacking
Solving the stacking problem alone has improved customers’ drayage processes by 40%, according to EDRAY.
Leto noted that while shippers are happy about the improvements, carriers get to participate in a more efficient drayage community.
“You now have all these drayage shippers teaming up with a lot more freight to offer these carriers, reducing costs for them and giving carriers more business to choose from,” Leto said.
While capacity is tight in all areas of transportation, lack of capacity to pick up container shipments creates a problem for the global shipping community. If a container is not picked up on time, it not only incurs detention costs, but it adds to the global container shortage, affecting prices all over the world.
The importance of having capacity available at all times spurred the recent partnerships between Flexport and the digital freight network Convoy. Many of Flexport’s customers were using Convoy to facilitate these drayage pickups, so the two companies integrated their systems to create full visibility of a shipment from its international origins to its final delivery destination, all in one location.
“Flexport’s goal is to make global transport easy and accessible for everyone. In doing so they’re trying to solve their customer problems like capacity. … I think that common passion for not building technology for technology’s sake, but building towards this common mission of making things better for customers, is what drives our partnership,” said Convoy President and COO Mark Okerstrom.
Other companies, like visibility platform Terminal49, have leveraged drayage carrier relationships to offer capacity strategy tools that other companies do not have enough experience to build.
CEO Akshay Dodeja explained that after building a successful drayage company, he was able to develop relationships with various ports and the regional capacity providers, enabling him to optimize their asset volume for his customers’ drayage pickups.
“We took our carriers and turned them into partners,” he said. “Our trucks got the software for free, and it allows them to access the cargo for importers, ranging from five to 200 containers a month. Their operations teams now have the tools and data to expedite cargo pickups and eliminate extra charges, reducing their overall drayage costs.”
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NOVEMBER 7-9, 2023 • CHATTANOOGA, TN • IN-PERSON EVENT
The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.