Why Warehousing Capability by Port Drayage Providers Reduces Headaches for Importers

Posted by Port City Logistics on Feb 3, 2022 11:16:02 AM

Managing port drayage sounds simple—on paper. Unfortunately, drays are among the areas of transportation where costs can easily spiral out of control. Why? It comes from the limited perception of what exactly drayage is and what drayage service providers can do. Facing facts, drayage involves moving freight from a port to an inland destination. Whether that destination is nearby or hundreds of miles away will determine whether shippers are penalized with per diem fees and even how long it takes to empty a pier of containers. However, a solution rests with port drayage providers that also offer warehousing capability, and it’s important to know how this reduces headaches for shippers, or importers in this context.

Port Drayage & Warehousing Equal Fewer Per Diem Charges

Port authorities will assess per diem fees if equipment isn’t returned by a set deadline. This means port drayage providers will inevitably need a faster turn time, and per diem charges can quickly compound depending on whether the container needs to get a rail location or even involve a transition between ocean, dray and rail. Thus, the risk isn’t isolated to ocean-port drayage alone. 

For instance, consider the new daily per diem charges enacted by Norfolk Southern Railway (NS) earlier this summer. According to JOC.Com, these “raise daily fees more quickly, with price jumps after day four and day seven rather than days five and 10, according to an email NS sent to customers Thursday […] The new fee scale charges $20 per container on days one through four, $50 per container on days five through seven, and $150 per container starting day eight.” Similar fee structures have also been enacted by ocean port authorities throughout the course of 2021, including the Port of Los Angeles, all aimed at incentivizing carriers to get equipment back faster. Rather than risking higher per diem charges at rail or ocean ports, closer warehouses give shippers the peace of mind of a faster truck turnaround.

Drayage Expertise May Gain Favor With Port Authorities

Another leading benefit of a combined warehousing and port drayage service provider comes from the way such companies work with port authorities. Drayage services that have nearby warehouses are going to naturally have more interactions with port authorities. As a result, they will gradually begin to have a closer relationship and may gain the favor of such authorities. Therefore, working with such partners may increase the chance of getting a free day when disruptions and delays occur. Additionally, companies offering drayage know the time-sensitive nature of container transportation, and they will go out of their way to keep such costs at bay.

Specialized Warehousing Reduces Replenishment Stress Too

Local warehousing for temporary storage of goods has a natural implication for improved inventory replenishment. When a port drayage provider effectively increases the storage capacity for shippers, cargo owners can more  easily accommodate changes within sailing schedules and port activity. As a result, risk of stock-outs declines and the overall strategy for replenishment grows stronger. Of course, there is always a risk for a disruption to that flow, which is why it’s important to have a strategic partner that understands the nature of port activities from a localized view. That’s one of the leading benefits of working with a company like Port City Logistics as well. 

Leverage Warehousing and Drayage in One by Partnering With Port City Logistics

Warehousing and drayage are two sides of the same coin. Without adequate warehousing, drayage delays will occur, resulting in higher total landed costs. However, localized warehousing keeps these costs in check while providing shippers with strong benefits that reduce the burden and headache of managing drayage. Contact Port City Logistics to learn more about how your operation could benefit from warehousing and drayage under one roof. 

Topics: port drayage