Lesson 1: Introduction to Transloading

Transloading is the process of moving a product from one mode of transportation to another. This process is utilized across the entire transportation industry, and transloading takes many forms – rail to truck, rail to barge, vice-versa, and so on. Demand for transloading services is driven by shippers needing to move product. Combining multiple methods of transportation offers shippers cost savings, flexibility, and the opportunity to expand business and market reach. Additionally, different commodities require different methods of shipping, from the type of equipment moving the product to the regulations regarding safe handling. Effective transloading keeps the supply chain moving, however, transloading can often involve warehousing. Efficiency in transferring product from one mode of transportation to another is especially important for products that have a limited shelf life, such as produce, or complicated supply chains.

The purpose of transloading is to transfer product as efficiently as possible in order to meet the demand for all manner of goods – coal, grain, consumer products, and more. Most domestically-shipped products and all internationally-shipped products will involve some form of transloading at some point before reaching their final destinations. There are many reasons a product would need to be transloaded. Consider an automobile manufactured in Ohio that is destined for a dealership in Colorado. The brand new vehicle will not be driven to the dealership, rather it will likely be shipped via rail flat car, loaded onto a haul-away truck, and finally arrive at the dealership. The combination of rail and trucking is optimal in this situation because rail offers long-haul economics while trucking provides the short-haul flexibility that rail cannot. Rail is more economical when shipping long distances because a single railcar can move up to four times the amount of product a single truck can move. Another reason a product would require transloading services is if the product has an international destination. In this scenario, product may be moved from its point of origin via truck to a port where it will continue its journey by freight liner.

Transloading takes place at specialized, purpose-built facilities. These facilities are strategically placed based on the market demand for the types of products the transload facility has targeted to handle. They are generally located in large population centers with sizable manufacturing and commercial bases, at sites that allow for expedited transit times, and at locations near ports or terminals. Shippers must be aware of specific regulations attached to different commodities being moved, as well as the facilities in which they must be stored. Some products may require temperature-controlled facilities while others, such as hazardous materials, have additional safety requirements. Other commodity-specific regulations affect food products, and product moving internationally must adhere to federal taxes and tariffs.

It is vital to keep product moving along the supply chain since a product that sits in a railcar or truck is not generating revenue. Additionally, transloading often allows for more efficient use and productivity of the rail equipment. However, some shippers using transloading also use the car for in-transit storage. While the utilization of the equipment is lower, the shipper benefits from the avoidance of placing the product in interim storage. A large portion of the plastic pellet traffic moves through transloading facilities in this way.

For many companies, transportation represents the largest portion of logistics costs. This is why expertise and efficiency are paramount when choosing a transloading service provider. The Commtrex Exchange helps connect shippers and transloading professionals with the most comprehensive online database of transloading facilities in North America.