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CHAPTER 1 Introduction Overview of Port Drayage Containerized shipping links trading partners through a sequence of land, sea, and terminal operations. The performance of containerized shipping as a whole depends critically on intermodal drayage--the trucking movements linking marine terminals with importers, exporters, and rail terminals. Containerized shipping is a hub-and-spoke system, with the ports and terminals as the hubs and drayage providing the spokes. This role makes drayage the chief manifestation of con- tainerized shipping in port area communities, where it is a part of the congestion and emissions problems endemic to urban areas. Port drayage refers to the movement of containers between a port terminal and an inland dis- tribution point or rail terminal. A typical drayage assignment involves either delivering an export container to a marine terminal or picking up an import container. The complexities of the business, however, require an average of around 2.5 drayage trip legs for each container moved--slightly more than one round trip--due to the need for tractor-only moves and empty container reposi- tioning. This average implies that for about 26 million containers handled at U.S. ports in the peak year of 2007, truckers drove over 60 million trip legs. Drayage of marine containers to and from port terminals is a complex process involving inter- actions between customers (importers, exporters, third-party logistics firms [3PLs]), ocean carriers, terminal operators, and trucking firms. The fundamental business transaction is between the ocean carrier and the customer, with the customer paying for waterborne transportation of the goods inside the container. Marine terminal operations and drayage are both intermediate steps, and both must cope with the movement preferences, policies, and capabilities of the ocean carriers and their customers. This intermediate position requires both drayage firms and marine terminals to cope continually with unevenness of demand, inconsistent priorities, mismatched information flows, and cost pressure. In any given port region, containerized trade involves a handful of large marine terminals, up to about 30 steamship lines, 2 to 3 railroads, and hundreds of small drayage companies. The typical trucking company specializing in port drayage relies heavily on owner-operators as sub-haulers, operating under contract with the drayage company providing dispatching, management, and commercial functions. Some firms also have company (employee) drivers. Drayage companies can be a single-owner operator but most of the business is done by small firms with 10 to 100 drivers. The drayage process is initiated by a transaction between a carrier and a customer for the con- veyance of goods. The drayage firm usually acts as a third party that is neither the customer nor the ocean carrier. Drayage firms typically receive little advance notice of an order. For import traffic, trucks are dispatched to the terminal at some point after the container clears customs yet prior to the time in which the cargo owner will have to pay demurrage charges. The period of free storage 1
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2 Truck Drayage Productivity Guide varies by terminal but is rarely more than 1 week. For exports, deliveries can be made within a pre- determined window prior to vessel departure. The principal challenge for the dispatcher is to allo- cate resources (trucks) across orders in a way that keeps all trucks working productively while still meeting the delivery windows of the customers, which can vary based on the customer demands and commodity type. Truckers, who are paid per load, rely on dispatchers to ensure that their assigned daily schedule minimizes the number of miles they drive without a load and the time they spend waiting for a load to be ready. A key challenge facing drayage companies is matching up the movement preferences of importers and exporters with the protocols and capabilities of marine terminals and ocean carriers. This challenge creates a constantly shifting set of complex and often contradictory requirements. Drayage companies and their drivers are remarkably adaptable, but the complexity of their task leads to inefficiencies, delays, excess costs, and unnecessary emissions. Identifying and reducing these inefficiencies is a major objective of this guidebook. The drayage industry is fragmented and highly competitive. The competitiveness leads drayage firms to relentlessly pursue efficiencies and cost-cutting opportunities. Most drivers are owner- operators who receive a percentage of the revenue from each move rather than being paid by the hour or the mile. Drivers therefore have an incentive to make as many revenue moves as pos- sible and minimize non-revenue time and miles, accounting for much of the practices observed in the industry. The fragmentation of the system, however, limits the ability of any one firm to optimize operations, manage peaking, reuse empty containers, or otherwise rationalize the system as a whole. Drayage companies and owner-operators typically rely on Class 8 diesel tractors (Figure 11) purchased after they were retired from long-haul trucking companies. The result is an older hetero- geneous fleet of equipment originally designed for other uses. Some companies and owner- operators do buy or lease new tractors with specifications suitable for port drayage. That practice has increased greatly in Southern California due to the requirements of the ports' Clean Truck Program. The practice is likely to spread as other ports eventually implement their own clean air plans. The focus of this guidebook is helping planners better understand the causes of bottlenecks, delays, and extra trips that increase the time, cost, emissions, and congestion impacts of port drayage beyond what is necessary to accomplish the underlying transportation task. The guide- book does not venture to instruct planners in how to eliminate all congestion from the port system. Source: The Tioga Group, Inc. Figure 11. Class 8 drayage tractors.