Transloading involves transferring cargo from one load unit to another, which is common in containerized transportation. It reduces transportation and inventory costs through destuffing (or stripping) the contents of a load unit and stuffing it in another load unit that is more suitable for the involved transport leg. There are several reasons why container transloading is performed, which tends to take place in the vicinity of port terminals or inland (satellite) terminals:
- Consolidation. When there is a significant market for domestic containers and the domestic load unit is larger than the maritime load unit, shipments consolidation is often performed. In North America the largest domestic load unit is 53 foot in length, which represents the maximal legal size of a truck load on the Interstate. Thus, in distribution centers in the vicinity of several major port terminals the contents of three maritime containers can be transferred into two domestic containers. This enables cost savings as shipment costs, including terminal costs, are established in terms of loads. Rail terminals charge by the number of lifts, which means it costs the same to handle a 40 foot or a 53 foot container. Under such circumstances, transloading costs are compensated by savings on inland transport costs, which can be in the range of 30% compared with the option of moving maritime containers inland. Yet, transloading involves some risks such as damage and theft or additional delays to perform (about one day), which may not be suitable for some supply chains.
- Weight compliance. Involves shifting the contents of heavy containers into lighter loads such as domestic containers or twenty footers. This is particularly the case for the containerized movement of commodities. However, transloading heavy maritime containers into domestic containers is not a common practice.
- Palletizing. Very common for the shipments of consumption goods. To gain shipment space in imbalanced flows many containers are “floor loaded” and once arriving near consumption markets, the shipments are broken down and assembled into pallets. This also gives the opportunity to adapt to local load units that involve different sizes, such as North American and European pallets. Doing such a task at the point of origin would be logistically complex.
- Demurrage and equipment availability. Containers are commonly leased for a specific time period. The leasing contract may also specify that the maritime container cannot leave the vicinity of the port or cannot spend more than a specific amount of time inland. Transloading is thus performed to ensure that the leased container is handed back to the maritime shipping or the leasing company without additional charge. This reduces the repositioning of empty containers over long distances and promotes a higher level of asset utilization for the container lessor. Transloading also enables a more efficient use of both container assets (international and domestic) and can facilitate international trade by freeing transport capacity. For instance, moving maritime containers over long distances in the North American transport system can be considered a suboptimal usage of transport equipment, particularly from the perspective of maritime shipping companies. Conversely, the global maritime shipping industry is mainly designed to handle 40 foot containers and cannot accommodate domestic containers. However, a large amount of transloading for inbound shipments may reduce the availability of maritime containers for export at inland locations. This is a salient problem for the export of containerized commodities.
- Supply chain management. A transloading facility can act as a buffer within a supply chain, enabling shippers some room to synchronize the delivery of goods with the requirements of their customers. This is particularly the case for long distance trade where a shipment can be in transit for several weeks while the demand conditions at the destination may have meanwhile changed. Transloading enables to delay the decision about routing freight to the final destination by using the facility as an opportunity to do last minute adjustments in terms of which shipments should go to which markets. Another common supply chain practice concerns the assembly and consolidation of loads for a specific market (merge-in-transit) during transloading. For instance, large retail importers commonly purchase goods from several foreign suppliers. Transloading offers the opportunity to consolidate the loads for specific regional distribution centers or stores. In this context the transloading facility performs a function similar to a cross-docking facility. Also, transloading represents an opportunity to perform some added value activities (packaging, labeling, final assembly, etc.) before shipments arrive at final markets. It works well when long inland distances and several regional distribution centers are concerned.
Transloading is thus used to the advantage of both importers and maritime shipping companies. About 30% of all the containers handled by North American West Coast ports are transloaded into domestic containers and then moved by rail. The goods that are the most suitable for transloading include apparel, appliances, assembly furniture, electronics, footwear, toys and household goods. In many cases transloading requires specialized equipment and a facility in the vicinity of the intermodal terminal where it can be performed.