IMC COMPANIES WHITE PAPER

What is Drayage?

A brief look at the word, the industry, and what it means to businesses and customers alike.

By Katie George Hooser, Chief Marketing Officer, IMC Companies

1. DRAYAGE 101

What is drayage?

Simply, drayage is the transportation of shipping containers by truck to its final destination.

A seemingly simple concept has become one of the most complex and important industries in the world. For this reason, we felt compelled to take a deeper look at drayage to demystify its meaning and highlight its importance to businesses and consumers alike.

Where did the word drayage come from?

The term "drayage" actually originates from dray or draft horses, exceedingly large, strong horses used to carry heavy loads. The word "dray" comes from an Old English term meaning to draw or to haul. Over the years, the term "drayage" has adapted and grown as has the drayage industry. Let's take a look at some of its major points of change.

Who is Malcolm McLean?

Arguably, no one has transformed the process of transporting cargo more than American businessman Malcolm McLean, born in North Carolina in 1914.

During his career in transportation, McLean developed what is now known as the modern intermodal shipping container. He is widely known as the "father of containerization" since his innovation of the removable container can be transported via multiple modes of transportation and revolutionized the international supply chain for shippers and customers alike. In addition to containers being easier and more cost-effective, they are also safer. Since containers can be locked, secured and sealed, they are less likely to suffer theft and damage. This resulted in less cargo loss and lower insurance rates both of which benefit shippers and end users.

Countless articles have been written about Malcolm McLean's impact on the shipping world. After his death in 2001, Forbes Magazine remarked he was "one of the few men who changed the world."

2. CONTAINER VS. MARINE DRAYAGE

What is the difference between marine drayage and domestic drayage?

Domestic drayage: In domestic drayage, product from a marine container is transloaded into a 53-foot domestic container and then moved inland.

Marine drayage: In marine drayage, the product remains in the marine container until it reaches its final destination. Every shipping container that arrives or leaves an ocean port must at some point be moved by marine drayage.

How much drayage occurs each year?

An estimated 30 million marine containers move in and out of the United States on an annual basis.

Who plays a role?

An infographic describing the different players in domestic and marine drayage

3. WHAT HAPPENS IF DRAYAGE STOPS?

What happens if drayage stops?

Without drayage, international trade would come to a halt. The United States could no longer import or export goods overseas.

Why is drayage important?

Drayage services the importers and exporters in our country to ensure the safety and health of our international trade system. As the thought leader in marine drayage, IMC is dedicated to optimizing efficiencies, innovations and partnerships to fully leverage the supply chain to continually exceed the expectations of the businesses we serve.

4. INDUSTRY TERMS

Industry terms

  • Chassis: A container trailer designed to securely carry a container between ports, rail, yards and depots.

  • Ocean Carrier: A commercial fleet of steamships operating as a common carrier under the same ownership

  • NVOCC: A Non Vessel Owning Common Carrier provides services of an ocean carrier but does not own their own ships. Instead they lease space on ships on behalf of their customers.

  • Transloading: The transfer of cargo from one mode of shipping to another. Moving product from marine containers to domestic 53” containers is an example.

  • Drop and Pick: Drop off one container and pick up another at the same location.

  • Container Depot: An outdoor storage facility for containers. Container depots are often clock start/stop locations for ocean carriers when determining Per Diem.

  • Carrier Haulage: The inland transportation service is provided by the ocean carrier contracting with the drayage company. This is also referred to as a “Door Move”.

  • Demurrage: a daily charge for containers that are left at the rail or port past agreed upon free time or “last free day”.

  • Freight Forwarder: A company that arranges transportation of goods from an importer or exporter to the final destination.

  • Match-Box: When a truck delivering an import load returns back with an export delivery. This process reduces “empty miles” and increases efficiency in the supply chain.

  • Peel Pile: Drivers pull up to a stack of containers at a port or rail. Drivers receive the next container that is “peeled” from the pile. Also referred to as a flow stack. Learn more.

  • Merchant Haulage: The inland transportation service is arranged by the importer or exporter.

  • Per Diem: Daily charge by the ocean carrier for using the container.

  • Intermodal: The movement of cargo via two or more modes of transportation such as road, rail, water, air and pipeline

  • Supply Chain: The complete process of the production and distribution of goods from creation to delivery.