What Is Local Warehousing and Why Is It Crucial to Keeping Per Diem Rates Low?

Posted by Port City Logistics on May 31, 2022 12:19:41 PM

In 2019 many in the supply chain saw a lagging ability to compete as the industry maintained its reputation for being slow to adapt to technology. The following year, COVID-19 wreaked havoc in a process that was already more complicated than local freight shipping from Point A to Point B. As shippers continue to rebound from the pandemic, many are looking for ways to utilize strategy and technology to promote business resiliency. Supply Chain 24/7 noted that “In today’s highly competitive warehouse logistics market, leading 3PL warehouses to recognize the need to keep operational costs low in order to maintain their margins and effectively serve their customers.”

How Distant Warehousing Adds to Total Supply Chain Costs

Right about the time a driver smells the ocean air, the thought will cross their mind, “I hope they already started to unload the container ship.” Drayage drivers are familiar with the tedious and laborious nature of dock work its  impact on their bottom line. Meanwhile, shippers and brokers are familiar with this bottom line as they work to get their carriers to the docks at precisely the right time to avoid excess dwell charges and other dock fees. 

Dock charges are just the start of added supply chain costs when a shipper doesn’t have access to local warehousing. When a driver has to deal with unpredictable dock schedules followed by an extended drive, shippers can expect charges for the extended container turn times, per diem fees, and many other associated costs.

The Connection Between Freight Services, Per Diem Rates, and Shipping Costs is Critical

Although cheap freight shipping is the goal for most shippers, it’s easier said than done. Freight services incur various expenses, and carriers utilizet different charging methods. One constant charge to be expected from long-haul service is per diem rates. With international per diem rates rising to ensure truckers are compensated adequately for loads that keep them from their residence, shippers must strategically choose between distant warehousing and local warehousing. Shippers will see better freight efficiency in their first mile by speeding up drayage efficiency and container turnaround times with local freight shipping.

As West Coast frequenting shippers head to the East Coast, acquiring quality local warehousing is vital. A top-notch local warehousing provider will provide easy access to nearby major ports, flexible drayage solutions, and consistent storage capacity for current and future needs. As many keep their eyes on the Port of Savannah expansion, brokers and shipping companies need to expand their Savannah network before the Georgia port is as packed as its West Coast competitors.  

What Exactly Are the Benefits of Local Warehousing?

While those outside the supply chain might consider all warehousing the same, experienced supply chain professionals understand that different warehousing methods produce different results in logistics management. Local warehousing features many benefits that are currently untapped by many freight companies, such as:

  • Faster Turn Times of Containers – By warehousing freight within the same state as their port origins, shippers can return containers at an increased rate to avoid fees.
  • Available Staffing for Fast Freight Services –  Instead of hiring someone 1000 miles away to retrieve freight, a local team provides a team just a few hours away from the port.
  • Controlled Freight Storage Environment while Dwelling – Nearby warehousing options offer an alternative to racking up dwell charges at the port while potentially compromising freight contents.
  • Personalized Freight Services –  With fast drayage turnaround times, a local warehousing team can offer customized services such as pick and pack, expedited driving, and more.
  • Increased Profit Margin – By decreasing the chance of being charged international per diem rates, drayage fees, or other additional carrier fees, shippers can lower their overall operational costs and maximize profit margin.

Improve Local Freight Shipping With Local Warehousing Solutions - Learn How Today!

While cheap freight shipping can be hard to attain in a world consumed by the inflation and complications of the COVID-19’s aftermath, it is not impossible when partnering with the right first-mile provider. Port City Logistics is an expert drayage provider that can solve your warehousing needs to minimize carrier fees and maximize your bottom line. Contact Port City Logistics today to get quotes on your best Savannah warehousing solution.

Topics: Warehousing