Pricing for drayage is like many other aspects of the business — chaotic.
“No one seems to have a handle on what standard pricing for drayage should be. It’s tough to find a formula that a shipper can use as a guide,” said Charles W. Clowdis Jr., managing director for global trade and transportation at IHS Economics.
“There’s no rhyme or reason to it,” he said. “It is a pure whatever-the-market-will-bear pricing scheme. What somebody pays can depend on the day of the week and the time of day.”
Southern California drayage operators seem to be the nation’s savviest about pricing, but even that market isn’t immune to irrational rates, Clowdis said.
“There’ll be a driver who’ll say, ‘It’s Thursday and I haven’t had a good load since Tuesday,’ and will offer to take a load to San Diego for $300, knowing that his truck needs to make about $700 a day,” he said.
In the Port of New York and New Jersey, some motor carriers imposed congestion surcharges during the past winter’s gridlock at terminals but suspended them as delays and truck queues eased.
Some motor carriers said they declined to impose congestion surcharges because they feared they’d lose business, especially for store-door moves controlled by container ship lines
Drayage operators say rates generally slipped during the 2009-10 recession and are flat or slightly above rates of about three years ago.
Pricing has been held in check by fierce competition in a business with many seat-of-the-pants operators. However, that could change as equipment costs and safety requirements boost barriers to entry.
“With everyone concerned about capacity in 2014, you may see more increases than you’ve seen over the past three years,” said Michael Burton, president of C&K Trucking.
“A lot of the guys who were totally desperate are gone now,” Clowdis said. “There are fewer guys out there who are shooting way below their cost.”