Advantages and Disadvantages of Transloading

Advantages Disadvantages
Importers Reduction of unit transport costs (three maritime 40 footer containers into two domestic 53 footers).
Added-value activities (sorting, packing, labeling, etc.).
Routing flexibility through postponement.
Transloading costs.
Loss of at least one day of inland transit time.
Possible shortage of domestic containers.
Not all cargo is suitable.
Reconciling different container loads (additional delays).
Risk of damage or theft of cargo during transloading.
Maritime shipping Limit repositioning of empty containers.
Higher asset utilization (faster container turnover).
Risk of container damage.
Less equipment available inland for exports.

Source: adapted from The Tioga Group (2008) Containerized Intermodal Goods Movement Assessment, North American Logistics Chain, Transportation Issues and Trends.

Transloading conveys a number of advantages to its users, but also has a few disadvantages:

  • Importers. An important benefit for importers is the reduction of unit transport costs per TEU if the contents of maritime containers are transloaded into a lesser number of domestic containers. A common ratio in North America is putting the contents of three maritime containers into two domestic containers. This conveys a notable advantage in terms of haul and intermodal costs (number of lifts). There is also the possibility to perform a series of added value activities at the same time to insure customization and final preparation for retail. Additionally, transloading offers the opportunity to reassess the final destination of a load in view of changing regional market conditions. There are also some drawbacks for transloading, particularly its associated costs and time delays (at least one day) since it essentially represents an additional load break along the supply chain. Transloading also assumes the availability of domestic containers, which can be problematic if trade flows are imbalanced for the concerned port terminal. It should also be considered that not all cargo is suitable for transloading. For instance, if the goods have a high density the capacity of domestic containers cannot be fully utilized. Last, transloading involves a risk of damaging the cargo as well as potential theft. It is therefore not suitable for high value shipments.
  • Maritime shipping. Maritime shipping companies also benefit from transloading since it reduces the repositioning of empty containers from inland locations. The outcome is a higher usage rate of maritime container assets through faster turnovers. This is particularly important if trade flows are imbalanced. There is however a risk of container damage. Paradoxically, transloading makes less maritime container equipment available inland for exports, which involves less revenue for return trips.