We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Ultra-tight dray capacity forcing users to pay just to hold trucks
newsworthy

Ultra-tight dray capacity forcing users to pay just to hold trucks

February 20, 2018
Mark B. Solomon
No Comments

The availability of drayage capacity in the U.S. has recently become so tight that, in some markets, shippers and intermediaries are voluntarily paying a flat fee on top of the prevailing dray rate just to reserve a truck, according to an industry source.

According to the source, shippers are ponying up the fee, which is often in the $200 to $300 range, without any prompting or mandate from the carriers. The practice appears to be most commonplace in Chicago, but it is not the only market where it is happening. In Chicago, the overall tightness of truck supply of any form is compounded by inclement winter weather across the Midwest, which has made it more difficult to find available dray.

The source said the practice is occurring at ports, where dray trucks move containers from vessels to nearby locations such as a warehouse or rail head, and in domestic truck-rail service, where drivers deliver and pick up freight to and from rail ramps situated in high-density traffic corridors. Phil Shook, intermodal director for C.H. Robinson Worldwide Inc., the Eden Prairie, Minn.-based broker and third-party logistics (3PL) provider, said there's anecdotal evidence that the practice is mostly occurring at the nation's ports. This type of trend would run counter to the many 3PL drayage arrangements that are long-term and strategic in nature, Shook said in an e-mail last week.

The source said it is highly unusual for dray users to voluntarily pay just to reserve a vehicle, and then be charged for dray rates. Dray rates themselves have escalated dramatically as well. Ted Prince, co-founder and COO of Tiger Cool Express LLC, an Overland Park, Kan.-based provider of temperature-controlled intermodal transport of produce and food products, said he's seen drayage rates increase from 10 percent to as much as 80 percent over the past months. Prince said the top-end figure is a combination of higher base rates and the soaring costs of "accessorials," fees charged by carriers for services beyond the line haul. Dray companies are often presenting on a "take-it-or-leave-it" basis, Prince said in a phone interview Friday.

The problem of ultra-tight dray capacity is a "major nationwide problem, but the pain is more localized," Prince said. Some markets are being hit harder than others, he said, adding that Harrisburg, Pa., and Portland, Ore., are chronically short of dray capacity, the latter market because it doesn't generate the box volumes of other West Coast ports and thus lacks a large cluster of independent draymen. The Portland dray market is dominated by big providers like Lowell, Ark.-based J.B. Hunt Transport Services Inc. and Oak Brook, Ill.-based Hub Group Inc., which have in-house dray fleets. Owner-operators compose a large chunk of the nation's dray supply.

In a note yesterday, Overland Park-based 3PL MIQ Logistics said many of its regional dray carriers are reporting significant backlogs on existing orders and are not accepting new business until April. Shortages of chassis equipment are also being reported in the Midwest, and as a result many Chicago rail terminals have grounded containers, MIQ said. Adding to the problem is that chassis providers are requiring drayage carriers to pick up equipment from remote locations, resulting in more miles travelled and increased wait times, according to MIQ.

The dray shortage is a microcosm of the capacity tightness found across the trucking industry. Truckload and less-than-truckload (LTL) space is extremely tight. LTL carriers are increasingly seeing business that would normally move via truckload head their way because truckload capacity is harder to find.

Transportation Trucking Rail Maritime & Ocean Truckload Less-than-Truckload
KEYWORDS C.H. Robinson Hub Group J.B. Hunt MIQ Logistics Tiger Cool Express
  • Related Articles

    Shippers brace for tight capacity trend to continue in 2021

    Echo CEO says truck rates to continue rising in 2018 as capacity stays tight

    FMCSA to hold public "listening session" on autonomous trucks

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Cold chain giant Lineage Logistics buys its own rail operator

  • Autonomous trucking firm Plus prepares its tech for mass launch in China in 2021

  • The Home Depot opens automated DC in greater Atlanta

  • For container lines and ports, what a difference a year makes

  • Outlook 2021: What’s in store for logistics supply chain?

Now Playing on DCV-TV

2mw 01 04 21 thumb

Quantifying the Financial Impact of Code Red Conditions on Shippers

DCV-TV 4: Viewer Contributed
Now that 2020 is in the rear view mirror, shippers are being challenged with quantifying how CODE RED conditions in the transportation marketplace are impacting them. In our recent CODE RED Webcasts our resources addressed critical issues that can help shippers plan for a future that is fraught with high uncertainty...

FEATURED WHITE PAPERS

  • Proven Benefits: A Compendium of Slotting Optimization Success Snapshots

  • Bridging Information Gaps in Dock and Yard Operations

  • How Intelligent Sensor Solutions Turn Data Into Action

  • Order picking Solutions: Understanding Your Options

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing