As many industries and people shed off the strategies and relationships required through the pandemic, drayage logistics management continues to be defined as “It’s Complicated.” Atypical weather patterns, pandemic shockwaves, and stuck cargo vessels have changed what is required when planning drayage services. As a result, dray teams need to be resilient, efficient and have supply chain visibility because they never know when the next wave of issues will hit. Yet, 2022 shipping has continued to be marked by an overwhelmed market with inadequate carrier capacity to move containers to and from ports.
CSCMP’s Supply Chain Quarterly states, “June drayage rates are up 28% compared to a year ago, fueled by port disruptions and delays that are expected to worsen, spot market index report shows.” While the increased rates have followed raised fuel costs and general inflation, lockdown-induced factory shutdowns and cargo vessels anchored outside China’s ports also impacted the drayage market price increase. Unfortunately, these are just a few factors that have complicated the supply chain over the past few years. Although the berths at any dock are designed to endure the relentless pounding waves, the repetitive assaults against the drayage market revealed significant wear signs.
Growth Will Slow but Still Continue to Shape the Industry
Landlocked Americans’ understanding of the supply chain usually is limited to the semi-trucks filling interstate corridors. Yet, much of the global supply chain crosses oceans in cargo vessels that can hold enough containers to fill the trailers of 24,000 semi-trucks. Drayage shipping services and other portside teams are so essential that Fortune Business Insights reports, “The global marine port services market is projected to grow from $73.91 billion in 2021 to $101.98 billion in 2028 at a CAGR of 4.7% in the forecast period.”
The global drayage market growth is especially pertinent as countries worldwide increase their manufacturing output through efficiency initiatives that governments have implemented over the past couple of years. In addition, developing countries have stepped up as the globalization of the supply chain has demanded better policies to streamline business dealings. However, decreased consumerism due to inflation will likely impact the importing timeline of these items to the United States.
Moreover, as the Port of Savannah Expansion continues alongside other national dock renovation efforts, the United States will likely see more localized efforts to improve drayage efficiency. While any approved renovation measures promise an ROI sooner than later, the truth is that ROI can only occur once construction is over, leaving the interim years of building in a worse spot than drayage shipping services may have been in the first place. Therefore, time will tell what growth will come amidst current resiliency efforts and future disruptions.
Disruptions, Delays, and Deviations Continue to Impact Drayage Service and Performance
While Murphy’s Law, “Anything that can go wrong will go wrong,” was not written to describe the supply chain, it appears to represent the industry quite well. According to a report from BookYourCargo (BYC), as highlighted by Supply Chain Quarterly, “Destructive weather patterns, partnered with an increase in consumer spending as a result of the holiday season, have led to further port congestion and drayage rate increases across the board. Overall, national drayage rates in 2021 were 51% higher than they were in 2020. Rate increases, low carrier capacity, and low availability are anticipated to carry over into quarter one of 2022 due to the persistent port bottlenecks.”
Time has proven these estimations accurate, with 2022’s market driving most to call on an expert drayage provider to iron out complications. Drayage market insight is becoming increasingly valuable, too, as rates remain at all-time highs.
In addition to worldwide disruptions, localized issues have exacerbated planning drayage services. COVID-19 outbreaks at a container yard, local port congestion or expansion, localized carrier shortages, interstate construction, and more drive shippers to alternative drayage fulfillment strategies. So whether cross-docking or delivering to a nearby warehouse, shippers and end-customers alike expect the ability to schedule and monitor their delivery services. Some shippers have even pursued dedicated providers to ensure they receive these aspects in their drayage shipping services. In fact, timeline anxiety has widespread affected the supply chain expectation, driving shippers to gain better control and understanding of their freight movements.
Driving Forces Behind Drayage Market Trends Remain Varied
Today’s drayage market trends center around creative solutions that provide better control and visibility over freight leaving the dock. Undoubtedly these trends were impacted by the lack of control that the pandemic brought about, but the core driving forces vary between specialized shippers and localized industries. For some, it was the sudden realization of how little visibility a shipper has over their containers on the ocean. In contrast, popular pizza chains can notify patrons when their pizza enters or exits the oven. Other shippers felt the impact of labor shortages and saw the need for a change in efficiency measures that can still keep costs lower for shippers. Even still, other shipping companies and freight forwarders saw the impact of delayed container returns on the drayage market and made amendments to improve port truck turn times.
Regardless, what many people thought were temporary conditions during the pandemic have developed into permanent solutions to areas that needed optimization. This is especially true as consumer behavior differs drastically from previous years. According to Digital Commerce 360, e-commerce shopping represented a fifth of all U.S. purchases in 2021, with over $870 billion spent online compared to $762 billion in 2020. Technology advances swayed even the most skeptical of internet purchases as digital tracking tech has evolved with final-mile shipping that can bring last-minute necessities to their door within an hour. This permanent change to how consumers get their goods has brought about the need for better drayage logistic management that can keep up with the times.
Improvements and Changes to the Motor Carrier and Drayage Industry
After years of factory closures, bottlenecked ports, and carrier labor shortages through the pandemic, with a war added on top, weathered logistics providers have been left to ask, “What’s next?” And yet, some drayage market professionals have been an example of what it means to evolve with the times. Addressing freight container turnaround challenges with better investments in tech has allowed shipping companies to receive customized services to further pass down to their customers.
Indeed, technology has changed the game for the drayage market. Digital tracking, automated notifications, and real-time analytics are no longer an additional service but a necessity for the business health of shippers. Instead of leaving route optimization to last-mile experts, shippers can leverage logistics technology from when a container arrives at port. This added visibility into shipments provides shippers with actionable data that can teach them how to cut drayage container costs and avoid excess dwell charges.
Today, the right 3PL often utilizes local warehousing-based strategies instead of sending the long-haul driver directly to the port. Removing first-mile port pickups from long-haul drivers puts locals in the driver seat at the docks, minimizing the confusion often found in fast-paced import environments. Additionally, the local warehouse drayage market trend keeps per diem rates low by getting drayage drivers home at the end of every night. Another local warehouse perk allows shippers to leverage the temporary storage of drayed freight while maximizing their primary warehouse and distribution centers for all things in-store and e-commerce.
Gain the Competitive Advantage and Navigate the Drayage Market With Guidance From Port City Logistics
Today’s rapidly inflating economy has challenged the principle that “time is money.” With costs of goods and services flying higher than ever, consumers are looking to shipping companies to minimize their added expenses while providing an excellent experience. While drayage market employees can’t fix everything, they can start a shipment’s journey on the right foot. Even in the swelling Port of Savannah, the right transportation solution can minimize a container’s wait time on the dock with local help to move freight faster toward its final destination.
Port City’s experienced team of drivers and dispatchers can do just that. With over twenty years in the Savannah region, Port City has seen many logistic trends come and go. Port City can solve any of your Southeastern drayage market needs by maintaining the network needed to expand with the Peach State’s largest port. Don’t waste time; start a conversation with Port City Logistics today to see how its innovative solutions have fit the bill in today’s supply chain.