Third-party logistics (3PL) companies play a crucial role in international supply chain management and trade. To save money, many companies seek the services of 3PL companies, outsourcing everything from inventory management to order fulfillment.
A 3PL partner can ensure your goods arrive safely at the distribution center or destination warehouse of your choice. This allows you to focus on marketing, sales, product development, and growing your business.
If you’re interested in using the drayage or other services offered by a 3PL, it can be helpful to understand some facts regarding the drayage services industry.
The Global Drayage Market is Growing Despite Shortages
The global drayage market is expected to increase in value by $2.9 billion between 2021 and 2025. This represents a compound annual growth rate (CAGR) of 2% over the forecast period.
However, the drayage industry has had its share of slowdowns. The global shipping container shortage, which began due to the COVID-19 pandemic, caused prices to climb significantly. In 2019, for example, a 20’ shipping container cost approximately $1,500. In 2020, this doubled to $3,000 and, as of 2021, hovers between $4,000 and $6,000.
According to one report, the primary reason the global drayage market is projected to grow significantly in the coming years is because of the rise in seaborne trade. Transporting goods by ocean freight is often more cost-effective and environmentally friendly than shipping via air. However, when cargo shipments arrive via sea, there are limited entry points to each country or continent.
From that point of entry, the goods require transport overland to their final destination. Drayage services will be integral in completing these shorter distance delivery journeys over the next five years.
Drayage Services are Essential
Drayage is an essential part of the global supply chain, and 3PL companies play a critical role in logistics operations and fulfillment services. Per year, there are more than 60 million drayage movements in the United States, worth more than $50 billion.
These services allow businesses to transport goods short distances efficiently, often between metropolitan areas, or to complete a long journey, such as from a port to a final destination. Trucking services move more than 71% of all U.S. goods. In 2020, more than 1.4 million people were employed in the trucking industry as essential workers.
Drayage allows manufacturers in the U.S. to transport goods to sellers, both in the U.S. and abroad. If you’ve contracted with a foreign manufacturer or supplier to ship goods to the U.S., you need a way of ensuring those goods or raw materials travel from the point of entry to your place of business or a designated warehouse.
3PL Services are Cost-Effective
Whether starting a business or expanding an existing one, sourcing suppliers and manufacturers, especially overseas, can be difficult. A 3PL and freight forwarder can represent significant cost savings by sourcing suppliers and manufacturers, providing access to foreign markets.
A 3PL can simplify the processes related to warehouse management, picking and packing goods, and shipping them to distribution centers and customers.
The company can prepare and submit all required documentation for export, including bills of lading, commercial invoices, packing lists, and customs declarations. Depending on the company, it may also have access to customs brokers, allowing you to benefit from the predictability of knowing how much the customs duties will be.
3PL companies that also provide international freight forwarding services often have relationships with transport services. This allows you to benefit from discounted rates.
When you work with a 3PL logistics provider, you can save money because you don’t need to maintain your space and inventory. You’ll reduce expenses usually allocated to utilities, warehouse staff, and IT systems so you can put those funds back into other areas of your business.
Safety is Paramount
Drayage services involve several different types of transportation methods, including truck driving. Truck drivers are an integral part of intermodal drayage, transporting goods from warehouses to rail yards and seaports, and vice versa. While drayage needs long-haul trucking, the practice is not without its hazards.
According to the CDC, a survey found that 37% of workers got less than the recommended minimum of seven hours of sleep. The consequences of lack of sleep are serious for those operating motor vehicles, with studies suggesting that after 17 hours of no sleep, your level of impairment is equivalent to a BAC of .05. After 24 hours, this increases to the equivalent of BAC .10.
Recognizing the dangers of driving for prolonged periods, the Federal Motor Carrier Safety Association regulates the hours that truck drivers can operate to ensure drivers remain focused and alert. Drivers who carry property can drive for a maximum of 11 hours after being off duty for 10 hours consecutively.
After driving for eight consecutive hours without a 30-minute interruption, the driver must take a 30-minute break.
3PL and Freight Forwarder in One
At Asiana USA, we provide both freight-forwarding and third-party logistics services, ensuring you can deliver your goods to customers around the world safely and on time.
We have North American offices in Los Angeles and New York and offices abroad in Bangladesh, Vietnam, and China, so you can depend on our ability to access foreign markets and source manufacturers.
Our comprehensive drayage services play a critical role in helping our clients complete their international shipments. At Asiana USA, our top-of-the-line tracking systems allow us to provide you and your customers with real-time updates about your shipment. We ensure your intermodal units are transported in a timely and cost-effective way.
If you need a third-party logistics company to inspect your goods before shipment by a foreign supplier, such as for delivery to an Amazon fulfillment center, we can help. Call us at (855) 500-1808 for more information or to request a quote.