Why You Should Investigate the Benefits of Dedicated Container Drayage Service
By Paul Benfer, Kinetic Supply-Chain Services-
In these times of tight capacity, supply-chain managers would do well to investigate the feasibility of a dedicated drayage operation to help move containers to and from the port.
Of course, your company needs to have the volume to make a dedicated operation cost-effective. You may not have enough volume to make it work. Some organizations don’t integrate their import and export operations. Others allow their customs broker or vendor(s) to manage the flow of containers, which can create its own set of issues. The first step is to see what your volume truly is on a daily and weekly basis. As few as two container moves per day could make a dedicated option cost-effective.
The benefits of a dedicated driver for drayage are the ability to prioritize loads, superior visibility, which can be a challenge with owner-operator port driver fleets, a reduction in per diem and demurrage fees and better overall control of your supply chain.
If you are a manufacturer, sometimes production can run behind schedule. If you supply materials or chemicals that are used to manufacture products, your customers can be placed in a situation where their plants and facilities face interruptions or more serious disruptions such as a plant shutdown scenario. If your client’s plant shuts down, it can cost that company tens or hundreds of thousands of dollars in lost production and wages. If that happens, quite often your customer will turn to you to help offset their losses. The Amazon effect on retailers has dramatically shortened delivery windows that result in increased pressure on the supply chain to deliver goods within a smaller time frame of twenty-four to forty-eight hours or face significant vendor fines. The above two examples reinforce the potential value of a dedicated port driver and operation.
In 2018 most ports and rail-heads experience severe congestion due to larger ships, longer trains, inclement weather and fewer drivers. Some ports experienced delays of up to two weeks or more this past winter. Anyone who moved containers in multiple ports in 2017 and 2018 experienced and continue to deal with serious port and rail-head delays. Many draymen now charge congestion fees to offset the cost of wait time at the port. Where they used to be able to make at least two turns in a day, in many cases their drivers can only pick-up one container.
If you are a chemical manufacturer of hazardous materials, it makes even more dollars and sense to investigate the benefits of a dedicated driver who is certified and licensed to haul hazardous materials. Each day, it becomes more expensive and difficult to find carriers and draymen to handle hazardous materials. Between insurance costs and local police inspections and enforcement, many carriers decided it is not profitable to continue to be authorized to move hazardous materials. There is more freight available than there are trucks. Why deal with the extra red tape, increased insurance costs and fines associated with the transportation of hazardous materials?
All the above point the way to the expanded use of dedicated port draymen as the shortage of drivers shows no signs of abatement in the foreseeable future. We are still years away from an autonomous driver solution. No one knows yet how the recent legislation passed in California will affect capacity at the two largest ports in the United States. Your best way forward is to secure capacity zealously for your company to protect and improve supply-chain velocity and protect the company’s bottom line.
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