Biggest Drayage Challenges And Trends In 2023

Last Year’s Challenges And 2023 Forecast

2022 was a whirlwind for anyone in logistics. Supply chain challenges continued to rock an industry still reeling from the Covid-19 pandemic. Around the world, businesses struggled to make deliveries on time in the face of rail strike threats, warehouse scarcity, and other issues.

While some problems, like the rail strike threat, have resolved, other concerns remain.

It’s uncertain what impact these issues will have on the “first mile,” or drayage, portion of the supply chain in the coming year.

DRAYAGE: CRITICAL “FIRST MILE” DELIVERY

Drayage is the process of transporting freight by truck to or from an inland port, a seaport, or an intermodal terminal. Also called “first mile delivery,” drayage carriers play a vital role in ensuring timely delivery.

CLEAR PORTS, EFFICIENT DRAYAGE

When ports run smoothly, the drayage trucks do, too. Last year, major U.S. seaports, including Los Angeles and Long Beach, experienced significant congestion, due to Covid complications, geopolitics, and the hint of recession. These backups lead to bottlenecks in drayage service as well.

The Global Port Tracker reported that West Coast Ports ended 2022 with a 7.5% decrease in loaded imports and an 8.6% decrease in loaded exports. These port disruptions and delays lead to surging drayage rates in 2022.

Also, threats of a strike by the International Longshore and Warehouse Union (ILWU) also provided a grim outlook on the docks. This congestion and fear of labor strikes caused many companies to divert shipments to East Coast ports, many of which saw their most productive years in recent memory.

ARE THE PORTS STILL CONGESTED IN 2023?

2023 brings continued uncertainty about port congestion. Yet, experts forecast a rebound in 2023, with the Global Port Tracker predicting West Coast Port activity to return to pre-Covid levels.

And, the ILWU avoided a strike last year. Market analysts continue to watch ongoing labor negotiations for potential future disruptions. While these issues seem to have improved for now, changes to the trucking industry, especially in California, will have major impacts on drayage services this year.

NEW DRAYAGE TRUCK REGULATIONS IN CALIFORNIA

Starting on January 1, 2023, all drayage trucks must be in compliance with California’s Truck and Bus Regulation. This means that all drayage trucks working in the state must run on a diesel engine built after 2009. Trucks must register compliance with the California Department of Motor Vehicles.

CALIFORNIA PREDICTS DRAYAGE SHORTAGE

According to customs brokerage firm J.M. Rogers, California could experience a 2023 drayage shortage due to these new truck engine requirements. Demand for new truck parts is expected to outpace supply, and truckers will be unable to buy the parts needed for compliance.

DRAYAGE TRENDS IN 2023: EFFICIENCY AND TRANSPARENCY

Port delays, union unrest, and diesel prices are all outside factors that will impact drayage truck delivery in 2023. At the same time, logistics companies are working hard to provide solutions to make deliveries more efficient.

To combat the latest round of economic uncertainties, drayage carriers are looking to provide more efficient daily operations for their customers. For example, carriers are utilizing more technology and improved digital platforms for better security and efficiency. Each of these aspects can help to keep drayage costs stable while maintaining a steady supply chain.