What is Drayage Fees & How it is Calculated?
Navigating the world of drayage can be tricky, with many hidden costs that can eat into your profits. One of the most important—and often confusing—expenses is drayage fees. But what if you could turn this challenge into an opportunity? By understanding drayage fees better, you can turn what seems like a costly burden into a chance to save money and run your operations more efficiently.
Ready to take control and make your drayage work smarter for you? Let’s get started.
What is Drayage Fees?
Drayage fees are the costs for moving goods over short distances, usually from a seaport to a nearby destination. Though a small part of the supply chain, efficient drayage management can lead to substantial savings, while inefficiencies can raise overall shipping costs. Let's explore the key factors that determine drayage fees and how to manage them effectively.
Factors Which Influence Drayage Fees and How it is Calculated?
1. Weight & Size:
Every shipment has a certain weight and size. More weight and risk need more effort for any shipment. This explains why the price increases naturally. Smaller and lighter goods will have less shipping cost than bigger and heavier loads. And so the higher contents the higher shipping rates every other transport service agrees to charge.
2. Distance:
The drayage charges will be more each time, the further out you need to place your container. Embarking on the logistics matter of Shrink wrapped stretch film load will be garden noise compared to ferrying goods across a port hinterland.
3.Origin and Destination:
Apart from distance, the point of origin and point of shipment determines on a lot the expense incurred. Not all building hubs are created equal when it comes to fees – some will take longer to process on the hub which will in turn increase the costs to the overall project.
4. Mode of Transport:
What kind of transport are you engaging in? Truck, Van or other? The vehicle type that you should have and the instruments that are used while loading and unloading the products affect cost too. For example, in case your freight requires a fork lift truck instead of a pallet hand truck, it will practically drive up your costs.
5. Other Considerations:
In some cases, fragile items, special wrapping or the stacking of your goods play a role as well. Extra time and costs will be incurred should your shipment require some special handling or certain packing requirements.
6. LFD & Demurrage Fees:
LFD And Demurrage charges are applied when a shipping container stays at a port or terminal beyond the allotted free time, usually because it's not picked up or unloaded in time. For example, if a container remains at the port for five days past the allowed period, the shipper will incur daily demurrage fees for those extra days.
Additional Charges Beyond Basic Drayage Fees
Equipment Fees : Charges may be applied for using port provided chassis or coordination efforts.
Port Fees : Additional cost due to congestion, tolls, and terminal specific requirements.
Fuel Charges : Typically calculated as a percentage of the linehaul rate.
Overweight Fees : Extra charges for containers exceeding legal weight limits.
Tolls : If tolls are incurred along the route, they are passed on the shipper.
Pre-Pull Fees : An additional charge for staging a container before final delivery.
Chassis Split Fees : Fees incurred when a trucker must retrieve a chassis from another location.
Detention Fees : Charges are incurred when a carrier has to wait beyond the allowed ‘free time’ at the port or your warehouse. These fees typically range between $75 to $150 per hour. But you can also avoid these costs by timely monitoring your operations.
Types of Drayage Fees Defined
Drayage fees don’t necessarily have a standard policy as they vary from one area to another. Here are some common types :
Fixed Rate : A fixed rate means you pay one fixed price irrespective of how much and the size the package is to be shipped. This applies for short road distances or small parcel shipment as costs get easier to estimate.
Fees According to the Weight : These fees are in relation with the actual weight of the goods being shipped. The more the load, the more the charges. This is usually expressed in hundredweight (CWT), and the costs differ depending on what is being shipped.
Busy Peak Times : There are times when you will be very busy with work and want your goods moved at odd times such as night, weekends or holidays. Well prepare to be charged even more than ever. Peak surcharges apply to effective peak shippers during times of elevated demand.
Accessorial & Extra Charges : These are charges that will not be related to the payment to the transportation services. For instance, they might include driver waiting time (detention), tolls, fuel charges, terminal fees, extra charges for special equipment, labour charges, equipment usage fees, layover charges, and, overweight fees etc.
Other Fees : However, there are still some of such extra charges such as middlemen or broker fees, hidden fees and markup cost, drop fees, pre-pull fees or chassis split fees that you may experience depending on some situations that arise during the drayage process.
Here are some Methods to avoid Unwanted & Expensive Drayage Fees:
It is a fact that no one ever loves paying more than it is required and if you don’t have a relevant and better platform that gives you real information about the fees and charges they are charging from you for their services then you may be forced to pay for unnecessary extra charges and incur high cost to move your container because at the end time you do not have any other option. But don’t worry with drayhub you can.
Here are some measures to control your expenditures are as follows :
Use a Platform or a Marketplace : designed for you that helps you assess costs of services as well as the outcome and therefore ensures you have real value for your money.
Maintain a Proper Position : These records will save time and resources by letting you know exactly what fee you must incur.
Make Use of Effective Routes : To reduce your costs and save time, a shorter path may be taken.
Avoid Peak Season : Less traffic means loading and unloading are likely to happen faster such that fewer costs will be incurred.
Desist from Using Toll Roads : To incur low costs, route timetable planning that eliminates, as much as possible, the use of toll roads should be applied.
Compare Providers : Don’t settle for the first quote— compare prices of different drayage service providers and then choose or select the most efficient and effective one.
Use platforms that provide LFD & Demurrage Alerts to Protect you from Unnecessary Fees : To avoid these fees, ensure timely pickup and unloading of your containers. Coordinate with your drayage service provider to have the necessary paperwork ready in advance and use technology to track container status and manage schedules efficiently.
Use Broker or Middlemen Less Platforms : Minimise or avoid your reliance on middlemen or brokers, as their fees can significantly affect your operational costs and eat into your profits. Instead, opt for platforms like DrayHub that offer direct, seamless connections to carriers and shippers, helping you avoid unnecessary broker fees and keep your business running efficiently."
Hidden fees & markups cost : it can seriously impact your drayage operations to the bottom line. To avoid these costly surprises, choose a platform that offers transparent pricing and clear details on the charges for their services. By doing so, you can steer clear of unnecessary extra fees and run your operations more efficiently and effectively."
Avoid High Cost of Detention Fees : Smart shipment tracking is your key to staying on top of your container's journey. By providing real-time updates, it allows you to monitor exactly when your container is unloaded and how long it stays at the terminal. This means you can act swiftly to move your container before detention fees kick in, avoiding unnecessary costs. With smart tracking, you gain the visibility and control needed to keep your drayage on track and your expenses in check.
Conclusion
DrayHub is here to make your drayage process as smooth and cost-effective as possible. Our advanced drayage solutions like smart shipment tracking and other tools helps you to stay updated and ensure that your shipments arrive on time and within budget, helping you to avoid unnecessary fees or any other extra fees and helps you to maximise your profits.
Ready to streamline your drayage operations? Get in touch with us today and experience better drayage services and discover how we can help you to save on every shipment and revolutionise your drayage today!
