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2019 is off to a worrisome start for the dray community. But it’s not the usual suspects.
What you say, there is more?
It’s the street turns. A street turn is also known as reuse and triangulation or reload. This is when a drayman asks and is granted permission to apply an import empty to an export booking.
Street turns rarely occur at the same location. Hundreds of miles may lie between the empty container and the eventual reload location. Plus, often the container needs to be stored on the draymans’ property, for which it has expended substantial capital to operate, secure, and man.
The motivation for the street turn is to protect a customer’s booking without having to lose time going back to the port to interchange the container. Most likely, if the container is returned to the terminal, it will not be allowed to come back out with the inbound motor carrier. The driver will have to wait in line for an empty with the other dray trucks. Depending on contracts with the port, a huge exporter’s demand may reduce the drayman’s priority and cause it to wait even longer placing everyone but the largest importers at a disadvantage.
The major steamship lines: Hyundai, Zim, Seaboard and Maersk have implemented a fee for Street turns. This policy makes it cost prohibitive for drivers to pick up an empty container at one location and take it to another location, get it loaded, and then send it at another.
To avoid the fee, draymen have to take the empty container to the port, drop it off, and then wait in line to pick up an empty container.
This policy hurts everyone in the supply chain. It
This policy may improve the steam lines bottom line in the short term. But, by adding millions of additional miles and introducing unnecessary wait times, it can only hurt everyone in the industry, including themselves, in the long term.
Plus, this comes after we collaborated with IANA to create the Street Turn Interchange (SIT). All of that is about to be undone, effective next week. These street turns have been a clear financial win for the entire supply chain and the environment. (Read more here,)
Charging a fee acts as penalty against logistics and supply management best practices.
The industry doesn’t have enough drivers with an average of 1500 loads per truck.
By introducing additional, unproductive moves, we decrease capacity and savings on interchange fees at terminals for steamship lines. Making street turns cost prohibitive introduces 20 to 200 moves per drayman per day, and contributes to air pollution, lines, and traffic.
Is this the best use of our chassis inventory? Is this the best we can do for our customers? We at Excargo don’t think so.
As customers with direct relationships with the steam lines, we ask you to negotiate with steamship lines to stop this practice. Please interject your refusal to support this initiative or pay for street turns. The dray community is unable to absorb these costs and will have to pass them onto everyone in the supply chain.
Let’s work together to encourage collaboration and efficiency sharing and let’s be the best industry we can be.
In May, I was invited to speak at the Houston chapter of the Council of Supply Chain Management Professionals (CSCMP) on my favorite subject, the shortage of dray trucks.
I smugly declared, “There is no shortage of dray trucks, just waste and misuse.” Then I supported my seemingly contradictory claim with a long list of examples:
While all those inefficiencies still exist, the number of drivers has diminished in the last 4 months!
The Fracking Effect
The recent rise in oil prices have rekindled the Permian Basin and the Eagle Ford Shale. Their demand for oilfield truck drivers has driven up wages. Last week a former driver stopped by on a break from the Permian Basin. He told me he loved working for Excargo, but at $6K per week he couldn’t say no to the oilfield. He has a young family and bills to pay. Just last night a fellow fan at the Rockets’ game told me his friend is making $7K a week.
While some drivers are taking advantage of the fracking windfall, some threats and obstacles maintaining successful driver capacity are pervasive and others are changing.
Ultra Large Container Vessels
One of the latest challenges comes in the form of the larger container ships. The inconsistent dray work caused by less frequent sailings uncertainty and irregularity into every aspect of the supply chain, including dray drivers’ schedules. At Excargo, we’ve experienced this challenge firsthand, trying to hold on to our drivers during these peaks and valleys in the supply chain by diversifying services.
Seize the Dray
Dray provides the lifestyle so many safety-minded, family-oriented drivers prefer. Excargo is seeking to diversify with domestic and other freight services to add work for drivers in between vessels. To maintain driver capacity, we must work together with customers to continue to make it make sense for these driving professionals. Eliminating wasted time at customer docks so drivers can have productive, efficient days, and maximum their revenue is key to the success of the entire supply chain. Waiting is neither profitable nor fun. Steady, consistent workflow benefits us all.
About an hour ago, the Unified Command held a press conference at the La Porte Emergency Operations Center to update industry and the public on response efforts following yesterday’s collision of the M/V Carla Maersk and Conti Peridot. Captain Brian Penoyer, Sector Houston-Galveston Incident Commander spoke at length regarding the work underway to protect the public from potential hazards.
“At first light this morning we were able to conduct air reconnaissance looking for any MTBE that has reached the water. With the single exception of a trace release from the damaged area of the hull on the Carla Maersk, we were unable to locate any evidence of sheen on the water.”
He also reported that there had been no measurable traces of vapors on the shoreline since sampling begun at 11:30 last night.
While the vessel was carrying 216,000 barrels of MTBE, Captain Penoyer reported that only two cargo tanks were impacted; the wing tanks (voids/ballast) outside of the cargo tanks appear to have absorbed most of the impact of the collision. “As a result, it gave the crew the critical time they needed to transfer cargo to other tanks on board.”
Regarding the resumption of commerce and trade, Captain Penoyer explained that his first priority was public safety and health. “I’d like to have an estimate that would be helpful, but we have to proceed step by step (with the response)… candidly, it has to be that way until we’ve secured the vapor. At that point we can talk about reasonable estimates to resuming commerce. I would say that certainly we are not talking about hours to a day, we need to recognize that this is an enormously complex salvage operation; in some cases we are talking about specifically configuring firefighting and salvage capability to do this job, so it’s not something that’s going to happen in minutes or even a day, but it’s certainly something that will begin today.”
As a reminder, the safety zone where vessels are restricted from movement extends from Light 86 to the Fred Hartman Bridge. CPB has issued a blanket extension to departure timeframes of 48 hours, which may be adjusted as needed if the closure remains in effect.
The Port Bureau has an audio file of the press conference at: HERE
In addition raw video from the Coast Guard initial inspection may be found here: https://www.youtube.com/
We will continue to keep you updated as more information comes in.
Hard work and long hours are things Marcia Faschingbauer, President and CEO of Excargo Services, does not shy away from. Marcia has been working hard her entire life. Starting at her father’s food packing service, to now owning Excargo. Marcia has spent years building a reputation in the Houston community as a business leader and advocate of the American dream.
Marcia’s path to success began as a teenager, Marcia worked at her father’s food packing company, First Prize Foods, where they packaged dried beans and rice. Under her father, Marcia said, she learned “how important it was for the food to be clean,” as well as properly packed and secure to ensure it reached the customer. Marcia’s first experiences at First Prize Foods gave her an early taste of the value of the customer service experience to the customer.Hard work and long hours are things Marcia Faschingbauer, President and CEO of Excargo Services, does not shy away from. Marcia has been working hard her entire life. Starting at her father’s food packing service, to now owning Excargo. Marcia has spent years building a reputation in the Houston community as a business leader and advocate of the American dream.
Marcia’s path to success began as a teenager, Marcia worked at her father’s food packing company, First Prize Foods, where they packaged dried beans and rice. Under her father, Marcia said, she learned “how important it was for the food to be clean,” as well as properly packed and secure to ensure it reached the customer. Marcia’s first experiences at First Prize Foods gave her an early taste of the value of the customer service experience to the customer.