- C.H. Robinson implemented a $175 per container drayage congestion surcharge for many of the top U.S. ports, the company said in a client advisory last week, as drayage carriers introduce surcharges of their own amid a congested port environment. The surcharge took effect Wednesday.
- The fee will apply for all terminal locations in the following markets: Charleston, Savannah, Houston, Seattle/Tacoma, New York/New Jersey and Los Angeles/Long Beach. The fee applies to all U.S. inbound and outbound full container load cargo services at those ports through the end of 2021. Additionally, the surcharge covers all rail locations in Atlanta.
- Drayage carriers have implemented surcharges due to various supply chain challenges, which include congestion from a surge in imports, drivers leaving for other professions "due to excessive wait times and loss of productivity at the ports and rails" and difficulties finding chassis equipment, C.H. Robinson said.
C.H. Robinson's drayage surcharge covers busy U.S. ports walloped by a spike in volume and a lack of equipment needed to handle it quickly enough.
Along the East Coast, there are severe chassis shortages and delays in pickups, deliveries and drayage to rail facilities, freight forwarder Green Worldwide said in a market update last week. On the West Coast, rail operations from Los Angeles and Long Beach terminals are deteriorating due to a "lack of rail capacity and railcars from both rail providers," it said.
There is also a need for more labor. While the trucking industry has highlighted the driver shortage for years, drayage jobs quickly became less appealing for the limited driver pool amid conditions sparked by the COVID-19 pandemic, said Justin Barnes, an international specialist at TOC Logistics International. These short-haul jobs were once sought after "because you can get home every night," but they're also paid per completion versus hours or miles.
"So in the past, a drayage driver could do anywhere from six to seven jobs a day. And we've seen that now reduced down to three because of long wait times [and] the rail and equipment shortage," Barnes said. "They're spending a lot more time driving and searching for chassis and equipment, which hurts their pay."
Schneider President and CEO Mark Rourke said on the company's Q2 earnings call that the company's drayage fleet is not fully staffed at some high-volume hubs. Rourke didn't specify which hubs were affected.
As drayage carriers face various challenges, many of their services are getting pricier for shippers. XPO Drayage, Cartage and Port Services have introduced peak capacity surcharges effective Sept. 13. Seaboard Marine is implementing a local drayage charge increase in the Philadelphia, Savannah, Houston and New Orleans markets on Sept. 12.
Issues at ports are also leading to fees outside of drayage operations. The average detention and demurrage charge more than doubled from 2020 to 2021, according to a report from Container xChange. Ocean carriers say it incentivizes cargo movement, but others say current congestion levels are too high for that to make a difference.
C.H. Robinson said it would reevaluate its surcharge at the end of the year. However, congestion challenges are "now forecasted to last well into Quarter 1 2022," it said.
Shefali Kapadia contributed to this report.