The Hidden Costs of Poor Drayage Service and How to Avoid Them
Despite the competitiveness among trucking companies that provide drayage, transloading, and storage services, the drayage industry continues to struggle with significant problems that stall deliveries and waste customer resources. For example, trucks often spend too much time waiting at ports, which delays loading and unloading cargo. Drivers make return trips with empty trucks, a problem known as “bobtails,” because of poor planning and coordination by their employers.
Poor drayage services inevitably trigger major problems for businesses and their supply chains, leading to higher transportation costs, unexpected fees, and unexpected delays that interfere with delivery schedules. These issues directly affect customer satisfaction, sometimes resulting in the delivery of damaged goods. Safety concerns could also impact perishable items due to careless cargo handling.
A company’s reputation and fiscal health can suffer if these inefficiencies aren’t addressed before hiring a drayage service. Poor drayage services might also lead to equipment shortages and disruptions in the supply chain, increasing overall costs. To maintain reliability and keep customers happy, businesses must carefully assess drayage service providers’ professionalism, experience, and transparency.
Demurrage Fees
Demurrage fees are applied when containers remain at the port beyond the allotted free time. These fees will rapidly accumulate, especially during times of port congestion or delays in container pickup. Depending on the port and shipping line, demurrage costs can reach hundreds of dollars daily. Inefficient drayage services that fail to retrieve containers promptly can lead to extended demurrage periods and higher costs, disruptions in supply chain schedules, and potential inventory shortages.
Detention Charges
Container holding fees accumulate when boxes stay too long at customer sites or terminals. These charges usually come after port storage fees and can drive up total expenses. Daily detention charge rates typically fall between $100 and $200 and are intended to motivate the prompt return of containers to avoid equipment shortages and enhance efficiency. Consignees, shippers, or other parties involved with the shipment are responsible for paying detention charges.
Increased Storage Costs
Inferior drayage services will increase storage costs due to inefficiencies in the logistics chain. Delays at ports, inactivity, demurrage fees, and detention charges accumulate rapidly, raising business storage costs for companies. Poor coordination and scheduling will further disrupt supply chain schedules, amplifying storage space requirements, operational costs, and discretionary budgets.
Lost Time and Missed Deadlines
Unprofessional and inefficient drayage services will dramatically skyrocket costs and fees by initiating a cascading effect on the supply chain. Delays caused by incompetent drayage services cause chaos in the movement of goods, typically leading to shipments missing scheduled delivery windows. Moreover, missing delivery deadlines contributes to burgeoning operational expenses for companies and the potential for reputational harm.
Toll Road Charges
Inefficient drayage services may stick to standard, traditional routes without exploring alternatives that could save on toll expenses. This lack of flexibility can lead to unnecessary costs that could have been avoided with better planning. In addition, shippers could face unexpected and exorbitant expenses when substandard drayage companies deliberately or unknowingly omit toll charges in pricing models.
How to Avoid Hidden Costs When Hiring a Drayage Service
Century Express specializes in providing professional drayage, storage, and transloading solutions. Our services include container transport, yard storage, and pre-pulling services. So that our customers do not have to pay demurrage fees, we allow them to store containers at their truck yards when prompt delivery is not an option.
