Drayage can seem like a relatively straightforward part of the overall supply chain, but technology is revitalizing and reshaping this vital function all the same.
In recent years, drayage has become something of a black hole in logistics data systems. While warehouses and shippers use data to streamline picking, packing, and shipping, operations at many ports still rely on much of the same technology that has been in place since the 90s.
Advanced AI capability, big data, and IoT devices are coming to change the way we load and unload cargo at harbors and other key transfer points forever. Just as innovation has impacted trucking, intermodal, warehouses, and last-mile fulfillment, numerous startups with new drayage technology are transforming American ports.
Connectivity is essential
Technology debt at any point in the supply chain is more than an inconvenience, because it can cause bottlenecks and breakdowns. After all, a smart ship and a smart portside warehouse still need to be connected via drayage, and smart containers can only do so much alone.
Advanced connectivity does more than fill data gaps; it allows shippers to implement “gray pool” drayage models, like the one in use at the Port of Los Angeles and Long Beach. In this freeform system, affiliated drivers are assigned containers from a dedicated stack based on availability and a predetermined mileage band. That way, the movement of containers out of drayage isn’t contingent on the availability of a single assigned driver. Drivers can take more loads, and shippers get out of the port faster. Everyone wins.
Without strong connectivity to enable scheduling from numerous portside stakeholders and partners, this system quickly becomes untenable.
In recent years, intermodal has been on the leading edge of supply chain innovation. The growing popularity of intermodal transport solutions necessitates key improvements in portside operations.
Drayage firms need to keep up with the technology that powers intermodal transport solutions in order to stay competitive. That means investment in advanced cargo tracking, paperless customs, and digitized load scheduling.
In one interesting new development, a Southern California drayage software maker recently secured $10 million in funding for a software algorithm that determines load rates for drivers on the fly — an innovation in an overlooked market segment that should streamline and expedite transfers to local intermodal hubs.
Only a decade ago, nearly all drayage documentation was done on a clipboard with paper and pen. Now, high levels of tech literacy are essential in a portside partner.
Drayage companies that don’t embrace technology likely won’t be around for long. As multi-billion dollar firms like XPO Logistics and J.B. Hunt Transport Services pour investment into new technology, the old way of doing business will look increasingly slow, resource intensive, and costly. Tech fluency from the C-suite on downward will very likely define business outcomes in the decade to come.
Experience is essential in 3PL and freight forwarding, but it’s not the whole picture — you need a partner that plans for change, then uses a dynamic understanding of drayage and experience with cutting-edge software to build the right solutions for the job.
With advanced tech enablement comes no shortage of potential risk. Few industries have been targeted by cybercriminals more in recent years than supply chain and logistics firms.
These cyber attacks can be cataclysmic for shippers — in under seven minutes, a 2017 attack on Maersk took 49,000 laptops offline, rendered 1,200 applications inaccessible, and permanently destroyed 3,500 servers. Everything running Microsoft, including the landline phone system, had to be rebuilt.
A concerning number of successful data breaches and ransomware attacks originate in networked third-party vendor software. In a rush to get ahead of the curve, too many 3PLs cut corners on cybersecurity (or simply don’t keep up with evolving best practices post-onboarding). As a result, many of their partners are left exposed to cyber attacks.
When choosing a drayage partner, you absolutely want one that upholds the highest standard for cybersecurity. A 3PL partner like Globecon uses leading WMS solutions to build secure custom programs for drayage, landside warehousing, freight forwarding, and more.
The future of drayage must be nimble. As ecommerce trends evolve, so too will the need for new fulfillment tactics, faster turnaround, and more evolved tracking. After decades of fairly static operations, adaptability will increasingly play a part in drayage.
In recent months, drayage firms have been forced to adapt at unprecedented rates. As the COVID pandemic took hold of the west coast of the US, logistics firms had to push forward with more touchless digital processes and physical distancing.
This doesn’t need to be a bad thing. The adaptations that firms make now in response to crisis can be competitive advantages if implemented thoughtfully and in a timely manner. For example, automating high-touch manual processes like customs and document processing can help expedite cargo through the port and onward to warehouses, retailers, and consumers.
Conventional approaches to drayage are quickly changing. As more startup investment enters the scene, legacy players are finding ways to shift operations to become more efficient, automated, and tech-forward. For many, that is easier said than done.
Rather than bootstrap new drayage operations from scratch, many merchandisers and shippers are partnering with 3PL organizations to fill key roles at the port. A drayage 3PL that can streamline cargo processing out of the port, manage freight forwarding, and warehouse extra cargo for future sale is a valuable partner in a changing ecommerce-led world.
Since 1988, Globecon has been a leading innovator for harbor drayage, transloading services, and much more. To keep up with the drayage of tomorrow, you need a partner like Globecon that has both experience in legacy approaches and a forward-thinking perspective.