Logistics costs in the United States increased by 11.4%. This is the conclusion of the State of Logistics Report for 2019. Pressure continues to increase to find ways of reducing costs in supply chains. Transloading has helped businesses around the world operate in a more efficient manner. Here is everything you need to know about how it can help you.
5 Reasons To Start Transloading
What is Transloading?
Much of logistics is about moving shipments from one point to another. Moving a shipment from a port to a distribution center. From a distribution center to a customer’s warehouse.
Transloading is a way of moving shipments from one method of transport to another. For example, a shipment could be moved from a port to multiple regional distribution centers via both rail and road transport. The shipment is transloaded from rail to road transport on its journey from port to regional distribution centers.
This is a typical scenario. It allows bulk transport by very cost-effective means for the largest part of the shipment’s journey.
It also provides a solution to the need to link from rail terminal to regional distribution centers. They might be in urban locations that are only accessible by road.
Transloading allows shipments to be switched between different modes of transport. This can depend on which is most appropriate. This facility allows you to make decisions about what is the most suitable mode of transport and unlock a whole raft of benefits.
Transloading companies provide this expert service with specialized equipment and methods. This means a transloading partner can complement whatever logistics solution you use.
You can include in-house transport, third party logistics or customer operations. The transloading specialist provides the logistics interface.
1. Managing Costs
Being able to choose the mode of transport for parts of a shipment’s journey gives you the opportunity to select the most energy-efficient option. Often this means using bulk materials shipping methods such as rail for the longest part of a journey. The higher fuel cost options are used for short journeys, especially where shipments need to be broken up into smaller quantities.
Ocean rates are inflated by the necessary inclusion of container rates. When inland shipping needs to include the use of the shipping container, you pay the cost.
Transloading at the port can mean that the steamship line can have their containers returned earlier. This helps them with their container turnaround and reduces your container charges.
2. Speed to Market
When speed to market is important, transloading can contribute. Different transport options provide different benefits. If speed is important, switching shipments or part shipments to a faster mode of transport makes sense.
Transloading rather than shipping to a distribution center can also speed up the process. The transloader can handle the breaking down of bulk into smaller units. This can ease delivery to individual customers or production plants.
The effect is the same as a distribution center but in a fraction of the time needed by a more conventional hub and spoke approach.
3. Environmental Impact
The environmental impact of our shipping choices is a relevant issue for logistics professionals. Regulation, customer preferences, and corporate social responsibility are all drivers in this respect.
Transloading provides a cost-effective way of minimizing the environmental impact of transport. Arguably, shipping by barge has less environmental impact than by road but barges alone cannot handle the final few miles of a shipment’s journey. Transloading allows you to use both water and road to reduce environmental impact.
Being limited to a particular mode of transport can make logistics unnecessarily complex and therefore have more environmental impact. Road transport of bulk materials means having large numbers of vehicles on the road.
Each truck has to be loaded, driven and unloaded. They each can have mechanical challenges, face congestion issues, and they don’t have economies of scale. Switching to a barge for most of the journey simplifies the whole operation.
A single barge can take the place of many trucks. It can also be much cheaper, easier to manage and is more sustainable.
4. Distribution Center Efficiency
A multiple distribution center model for your logistics may be an effective solution for most of your normal operations. There are inefficiencies that seem inescapable.
Some of the deliveries from your distribution centers make the same journey as goods arriving at the distribution center. Only in reverse. The processing and shipping of these deliveries seem a waste of effort.
Transloading can offer a solution. A transloading partner could route some of your port landed shipments by an alternative mode of transport to their ultimate destination saving you time and money. This can also free up your distribution center for other more effective work.
A transloading partner may have specialist transloading storage facilities. These can help improve your efficiency because they remove the need for you to ship to your storage facility from their point of origin to then ship to a production facility or customer. The transloader can handle the fulfillment of the delivery on your behalf.
5. More Destinations
Transloading offers you the opportunity to use a variety of shipping methods depending on the shipment’s destination. This potentially increases your reach to more destinations.
If you have the option to switch to the road in some cases and to rail in others you can reach urban destinations and more remote destinations too. If your operations are far from the sea, you can take advantage of cheap shipping on the water by using rail to the port and ship on the water from there.
The opportunities that transloading open up depends on your business model. If you are looking for efficiency improvement, and what business isn’t, then transloading may be worth considering.
Talk more about transloading services by contacting us here.