transloading

What is transloading?

Transloading is the process of moving freight from one form of transportation to another as a shipment moves down the supply chain. Transloading facilities are staged areas where freight is swapped from one mode of transportation to another. This may be indoors or outdoors, depending on the transportation modes involved. Deconsolidation and reconsolidation are two key concepts in transloading, where larger freight units are broken down into smaller pieces and vice versa. These processes attract fees that a company pays to maintain the smooth operation of its supply chain and avoid per diem fees.

Understanding transloading

Transloading is the process of moving freight from one form of transportation to another as a shipment moves down the supply chain.

Transloading is a term that describes the transfer of freight from one form of transportation to another while it is en route to its final destination.

The process is used when one transportation mode cannot be used over the entire route. Consider the example of iron ore that needs to be shipped from an inland mine in Brazil to a foundry in China. The iron ore must first be transported to a port by train where it is then transferred to a ship. Once the ship arrives at the Chinese port, it is transferred back to a train where it is taken to the foundry to be processed.

Transloading also encompasses international freight transported by a ship that is transferred to waiting trucks which then transport it to warehouses and distribution centers. In some other instances, freight that is moved by rail for most of the trip is then transferred to trucks for the last-mile delivery. While the process of transloading may seem convoluted, it is important to note that trucks are usually the only form of transportation that can arrive at the final destination. Therefore, it makes sense for truck transport to take over from rail, air, or sea transport no matter how near the final destination may be.

Transloading facilities

Transloading facilities are staged areas where freight is swapped from one mode of transportation to another. For train and truck transport, these facilities are located in railyards that are themselves near major highways. Railyards are also used for train-to-train transloading where a change in railway gauge makes it impossible for one train to continue to complete the entire journey.

Transloading areas can also be located inside a warehouse or distribution facility – particularly if rail infrastructure is absent or unsuitable. Indoor facilities are also used to unload the contents of a shipping container into a truck for final delivery. 

Deconsolidation, reconsolidation, and transload fees

Deconsolidation and reconsolidation are two key concepts in transloading:

Deconsolidation

The process of separating a unit of freight into smaller units, can occur right down to the individual component level.

Reconsolidation

The opposite process of combining smaller units into larger units. Shipping companies tend to reconsolidate freight into trucks that are headed to the same or similar destination or region. 

If there are multiple final delivery destinations, transload fees apply to cover the cost of deconsolidating the container and then palletizing the freight ready before it is loaded. Similar fees apply to reconsolidation.

Companies are willing to pay these fees to keep their supply chains operational and avoid per diem fees that are charged by the shipping company to rent a container. These fees, which can range anywhere between $50 and $100 per day, apply to containers that sit idle and exceed their allotted rental time. Essentially, per diem fees are charged because the shipping company’s efficiency is reduced when its containers are out of circulation.

Read Next: Break-Bulk, Cross-DockingSupply ChainAI Supply ChainMetaverse Supply ChainCostco Business Model.

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