When you’re importing products into the U.S., there’s a lot that needs to happen before your items hit store shelves or a customer’s doorstep. And it often starts with port logistics services such as those provided by a third-party logistics (3PL) company. In this article, we’ll take a closer look at those services and the options you have for getting your goods quickly from port to consumer.
Getting to know 3PL port logistics services
The following services can be outsourced to 3PLs that offer port logistics services. Importantly, while these services below are described in the context of ocean port logistics, many of these same services can be performed for containers coming into rail terminals.
Once your container arrives at the port, you’ll need to move it to a warehouse for storage, transloading, or deconsolidation. That’s where drayage comes in. A 3PL’s drayage truck(s) will pick up your container from the port and bring it to your warehouse or final destination, and then return the container to the port after it is unloaded.
It sounds simple enough, but there are several elements you’ll need to consider.
- Asset-based versus non-asset-based providers. Many shippers prefer to work with asset-based drayage providers – that is, companies that own their trucks and equipment (e.g., chassis). This allows your 3PL to allocate equipment to your shipments so that your containers are ready to move when they hit the port. It also eliminates the time and cost of having a driver wait in a ‘chassis pool’ to rent an available chassis for the container(s) – provided that a chassis is available to rent.
- Demurrage and detention penalties. You will want to make sure that your 3PL provider can help you avoid detention and demurrage charges. When your container arrives at the port, you have a certain number of “free days” to pick up your container. If you don’t pick it up within that time period, you will be charged a demurrage fee by the port terminal for each day outside the free-day window. Once you pick up your container, with or without demurrage being assessed, you have a set amount of free days to return it to the port. If you fail to return it within that time period, you will be charged a detention fee by the ocean carrier for each additional day.
- Driver classification. In California, a series of court battles culminated in a state Supreme Court ruling that – in the event of a lawsuit – independent contractors, drayage drivers in particular, will be presumed to be employees of the hiring company and not independent owner-operators. Companies that hire independent owner-operators could then be on the hook for wages and benefits accrued during the time that work was performed. Many companies are avoiding this risk altogether by partnering solely with drayage providers that have hourly employees, not independent contractors.
Overweight corridor services (Ports of Los Angeles and Long Beach)
If you’re shipping heavyweight containers into the Ports of L.A. and Long Beach, the overweight corridor can be a vital part of your supply chain mix. Why? Because if you want to keep your container heavy over the road and all the way to your final destination, you’ll potentially need a tri-axle chassis, a 4-axle (or “drop axle”) tractor and permits for each locale the shipment will pass through. This equipment is harder to come by than regular drayage equipment, and acquiring permits can be a time consuming and expensive process.
It may be more cost effective to partner with a 3PL that has a warehouse within the overweight corridor – a 4-square-mile grid of local roads in which overweight containers can be freely moved by trucks that have the proper permits (3PLs that operate within the corridor will already have these permits). A corridor-based 3PL provider can pick up your container from the port, transport it to a warehouse, and perform weight reduction, transloading and/or deconsolidation services to get your products on the move without the need for special permits and equipment.
With transloading, your 3PL can reduce your order-to-delivery cycle time by receiving your container into its warehouse, inspecting and processing the container’s contents, and then loading those contents into an intermodal container or truck trailer for OTR shipping to a destination near your customer(s). Instead of sitting in a warehouse, your product is now staged for fast delivery.
Similar to transloading, deconsolidation is a port logistics service that can get your imported goods on the move rather than sitting in a warehouse. Your 3PL provider will receive your container and process its contents just as it does with transloading. The difference with deconsolidation is that your 3PL will segregate the products – typically by purchase order or SKU – and then load products on to multiple intermodal containers or truck trailers for distribution to multiple locations simultaneously. This is very effective when you have several end customers in several different locations.
The best of all worlds: integrated 3PL services
While there are many 3PLs that perform the port logistics services described above, there are a select few that integrate port services with warehousing and transportation. This integrated logistics approach can greatly simplify your supply chain as you eliminate the need for multiple points of contact, billing arrangements, systems integrations, etc.
It also helps your supply chain work harder for you. For instance, if your 3PL is controlling both drayage and warehousing for your company, it can arrange for the delivery of containers – and related warehousing services – outside of normal warehouse hours. It can also better coordinate inbound and outbound deliveries with warehouse operations because it owns the entire process and can orchestrate each component to meet your supply chain needs.
Weber Logistics is one such 3PL. Weber provides an integrated port services, warehousing and transportation solution on the West Coast to move goods from port to market faster. This solution includes 12 distribution centers throughout California – including a Long Beach DC located within the overweight corridor – as well as asset-based drayage and transportation services. To learn more about our integrated solution on the West Coast, contact us today.