Transloading for Shipping: What It Is and Why It’s Used in Logistics
There are many different modes of transportation in the logistics and shipping process. Depending on the location and cost, manufacturers, suppliers, and retailers may utilize multiple modes for a single shipment. The general term for this is called transloading and it is a very common practice in the supply chain. But what is transloading and why is it used?
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What is transloading?
Transloading is the process of transferring a shipment from one mode of transportation to another. It is often used as part of a larger transportation strategy to minimize cost and time. Transloading can happen at any point in the supply chain, but it is most common at cross-docking facilities. It can be used for any type of shipment, including containers, trailers, railcars, and trucks.
Why use transloading as a transportation strategy?
There are several reasons to use transloading as a transportation strategy. These include: reducing shipping costs, consolidating shipments, improving schedule reliability, and avoiding port congestion.
Transloading also reduces the risk of damage or lost shipments, as goods are only handled once. Often, these services are provided by shipping companies, railroads, and trucking companies. These companies typically have their own transload facilities, which may be located at warehouses, distribution centers, or other locations.
How does transloading work and what are the benefits for businesses?
The method of transloading is very simple, and just simply involves moving material from one mode of transportation to another. However, some subtle requirements exist depending on which types of transportation are involved. The following example illustrates how the process usually works for imported containers:
- A ocean freight boat arrives at the destination port. The port unloads the container and loads it onto a freight truck.
- The freight truck transports the container to a cross-docking warehouse or other transloading warehouse.
- Materials are removed from the original container and loaded into the new freight truck. If the container is floor-loaded, it is removed and palletized before loading.
- The new freight truck makes its way to the destination, often a distribution facility.
- The truck with the container returns to the port where the empty container is cycled back into the supply chain.
Transloading can also be used to consolidate multiple shipments into one. When transloading is used this way, it helps businesses reduce their shipping costs by consolidating. Or vice-versa, to break down a large shipment into smaller units for something like regional deliveries.
The benefit of transloading becomes clearer as the volume of the supply chain scales up. By using transloading, businesses can choose the most efficient and cost-effective route for their materials, and sometimes eliminate an extra step in the distribution chain.
What are some factors to consider when choosing a transload provider?
Businesses should keep several factors in mind when choosing a transloader. First, they should to consider their final destination and ensure that the transloading provider position well for shipping to their final destination. For example, rail transportation rarely lines up with the delivery location and may require additional touch-points.
Second, the different modes of transportation each have their strengths and weaknesses. Rail transport, for example, is well-suited for long-distance shipments. Trucking, on the other hand, is faster and better suited for shorter distances.
Third, businesses need to consider the type of material they are transporting. Some transloading providers specialize in certain types of materials, such as refrigerated goods or hazardous materials.
How can transloading help reduce shipping costs?
The power of transloading to reduce costs simply comes down to enabling a company to pick the right transportation method for them. That’s the whole point of transloading: getting your material on the most effective (whether cheapest, fastest, or most reliable) method of transport.
By using transloading, companies can reduce shipping costs by consolidating multiple shipments into one load, using only one mode of transportation for the entire journey, or by breaking up a large shipment into smaller loads that can be transported more easily and economically. It really all depends on the specific location, material type, timeframe, and other unique requirements of the company.
Transloading is a very popular transportation strategy. Hopefully, this article has helped shed some light on what this processes entails and its benefits. If you’re interested in learning more or need help getting started with transloading or cross-docking, AMS is here to help. We have years of experience helping businesses just like yours streamline their shipping process and reduce costs. Give us a call today and let us show you how we can improve your business’s bottom line.
Looking for more tips to fix warehouse mistakes? Read our article about Warehouse Shipping Mistakes and How to Prevent Them.