What Are Drayage Fees?
Drayage fees are a lot like taxes: widely disliked and unavoidable. It is normal for shipments to get hit with all of these fees from the point of origin to the destination. You see, you are not only going to pay freight fees, but you are also going to pay accessorial charges.
When comparing drayage rates, you need to verify which of these charges you may need to pay.
The four most common accessorial charges that are unknown at the time an order is tendered are detention, chassis split, pre-pull and drop fee.
Definitions Of The 4 Most Unknown Drayage Fees
1. Detention Fees
Detention charges occur when a driver is held up or delayed at the shipper or consignee beyond the allotted “free time”. In transportation, two hours of free time on both ends is customary. However, many drayage providers are now only offering one hour of free time – particularly at the ports or ramps – given the congestion they typically experience. It is important to know what your carrier is offering in terms of free time, as well as their rate-per-hour. The average rate-per-hour is $60 to $100 after free time.
The direct approach works best in this case. Call the loading or delivery location and ask how long they anticipate loading will take. Sometimes they will give you an estimate and from there you can determine whether you run the risk of hitting detention or whether it is less expensive to “drop” the container onsite.
2. Chassis Split Fees
A chassis split occurs when the container is not located in the same place as the chassis. In this scenario, the trucking company may assess a chassis split fee – generally between $50 to $110 – to cover the cost of taking the chassis to the container location. Chassis split fees occur if there is no chassis available at an ocean port or ramp. This would require the trucker to travel to a nearby chassis pool to pick up the chassis first and then proceed to the port from there. You can think of chassis split as a fancy term for a stop-off fee.
A lot of times the steamship lines make the carriers terminate the chassis at different locations than the one they pulled it from. In Chicago, for example, the presence of an NS, CSX or CN significantly increases the likelihood of a split. It is rare to see splits out of BNSF unless the carrier owns the chassis.
Avoiding a chassis split charge in the former situation is challenging. The best tip is building a good relationship and trying to negotiate the fee ahead of time.
3. Pre-Pull Fees
You will incur a pre-pull charge if the trucker picks up a container from the port or ramp but does not get it loaded or deliver it the same day. If this is the case, the carrier will store the container in their yard. Generally, this is done for the benefit of the customer in order to avoid demurrage charges at the port and to accommodate a customer that needs to load or unload that container via an appointment or early in the morning. It is important to be aware of when the loading or unloading is requested, as it will determine whether you will see a pre-pull charge.
If your customer is open to pickup and delivery via appointment, request the afternoon. This way, you can try to get a trucker to pick up the box that morning and load and unload it on the same day. If your customer insists on an early appointment time, then you will likely see a pre-pull charge.
You will face a similar scenario if the container has reached the port or ramp and is entering its last free day/LFD. In this case, the port expects the box to get picked up. Otherwise, you will face charges upwards of $150 per day for demurrage – that is, storage charges from the port. In this situation, it makes sense to get the box pre-pulled because the $125 pre-pull charge is actually saving you money over the demurrage charges.
4. Drop Fees
A drop fee is charged by the trucker to drop off an FCL container at the warehouse and pick it up after it has been loaded and unloaded, as opposed to a live load and unload. A drop fee is also called a bobtail fee. A drop becomes necessary if the cargo cannot be unloaded quickly (for example, if the cargo is not palletized or if it cannot be unloaded immediately upon arrival at the warehouse). It is important to check with your carrier in advance because some carriers will charge a flat rate for a drop and others will charge double the freight rate. Some carriers will not charge a fee at all as long as the delivery location is in their predetermined drop zone – that is, within a few miles of the port or ramp.
Much like with the detention charge, you should find out in advance how long the loading or unloading process will take. Additionally, attempting to negotiate the drop fee is a good idea. If you regularly do this volume of business with the trucker, you have a good chance of success. On the other hand, one-off loads will be more difficult to negotiate and you may be faced with a drop fee that is double the freight rate.
For example, if the route is Columbus to Vandalia, with a $500 dray, you can expect the carrier to charge you an additional $500 if you require them to drop and then return the next day. Why? The trucker had to drive back and forth twice. Now, if the shipments are high in volume, you could get away with paying a small fee since the carrier knows you have more business for them.
Accessorial charges, especially these four, are charged frequently. There is a strong likelihood they will be added to your overall drayage costs. So, how do you minimize drayage fees?
How To Reduce Unexpected Drayage Fees & Overall Cost
Give Carriers Flexibility In Offloads
By giving carriers flexibility in the way they handle your cargo, you can usually negotiate better rates. Examples including allowing the company to handle freight surges at a port during high-volume days or handle day-side loads. Doing so helps you avoid getting charged for driver wait times because the carrier can use the driver to do other tasks while they weight for freight.
Choose The Right Third-Party Logistics Company For Your Drayage Needs
Hiring an experienced logistics company to handle your drayage will go a long way in minimizing your accessorial fees. A logistics company that lists drayage as a core competency is the best choice.
Freight Management, Inc. (FMI) fits the bill. By hiring FMI, you are not only getting access to a large network of carriers and proprietary technology, but also a customer service team that will keep you in the loop every step of the way. From the instant a load has been pre-alerted to the grounding of the container, the scheduling of pickup and delivery, and the empty/loaded return of the container to the port or rail hub, you will know exactly where your container is at all times.
FMI acts as an advisor who mitigates unnecessary charges such as extra chassis days, pre-pull charges and storage. For example, if a container grounds on a Friday and the LFD is the following Monday, some carriers may schedule the pre-pull on Thursday, the load on Friday and the in-gate Monday. In doing so, they create an unnecessary number of chassis days and potential storage fees over the weekend.
The experienced team at Freight Management Inc. operates as the liaison between you and the shipper/consignee to arrange a schedule that mitigates these charges – allowing you to get the most competitive rate 100% of the time.
FMI will walk you through various elements of the shipping process. We can explain the most common reasons why a pre-pull would be required such as the need to beat an LFD, an early morning appointment and carrier availability or lack thereof. We are also well versed in the pros and cons of live loading and unloading versus drop shipping and receiving.
We also offer Draydex™, the most accurate spot market index available. Instead of settling for freight fees, Draydex gives you critical information on…
Common Accessorial Charges
- Split return
- Yard storage
- Hazmat surcharge
- Drop fee
Using Draydex, You Get Access To The Following:
- Pricing from all ports and ramps
- Instant pricing for alternate routes
- Historical lane searches
- Comparisons between carriers
- Faster booking speed
- Improvements in record-keeping
- Carrier compliance monitoring
- Monitoring of carrier insurance and safety record
Additionally, FMI’s rate management system empowers you to quickly and easily compare freight totals against accessorial charge totals. This gives you a better understanding of landed cost, whereas getting the freight rate alone leaves you vulnerable to unexpected charges. The rate management system is FREE to use and there is no cap on how many rates you can obtain.
Stop putting up with sky-high drayage fees due to unexpected charges. Let Freight Management, Inc. manage your shipments and reduce your shipping costs.