Shipper — Whitepaper
Schneider’s transloading services has six advantages has over intact shipping. Discover how to pick a provider that can quickly help you take advantage of them.
The importing and exporting of goods has certainly evolved in both effectiveness and efficiency since Christopher Columbus’ very wrong turn on the way to India in 1492. After all, the voyage was a mission to bring goods to European consumers.
Today, cargo aboard massive ships docking at North American ports are small pieces in a highly technical and intricate puzzle that continues that mission. Countless technological advancements ensure that each foreign- sourced item lands at its proper destination — whether that’s a convenience store a few blocks away from the port or a department store smack dab in the middle of the continent.
Since 2012, there has been a sea change in inland port intermodal (IPI), the method most importers have traditionally used to move goods from dock to destination. Savvy shippers are realizing that IPI is going the way of the Nina, Pinta and Santa Maria and discovering that their own New World lies in transloading.
The easiest, most accepted practice for moving goods from port to inland destination was to simply have the ocean carriers coordinate the moves from water to land, keeping the container contents intact from point of origin to point of destination (this is why IPI is more commonly referred to as intact shipping). Ocean carriers, terminal operators and railroads have developed the infrastructure and processes required to move 20-, 40- and 45-foot containers — already filled with freight and sitting on their ships — directly onto the rail lines that ran right into the harbor or to a point nearby. They then used the rails to move the customer’s freight near the final delivery point, with contracted trucking companies completing the final mile.
Before the Great Recession, ocean carriers provided this service in a fairly efficient and cost-effective manner. Post-recession, they exited the chassis business and increased rates for intact inland moves to many end points — and even terminated service on some lanes to avoid the expensive repositioning costs of returning empty ocean containers back to the port.
With their backs against the wall, shippers embarked on a quest to find another solution. They found it hiding in plain sight: transloading.
Simply put, transloading is a process by which ocean freight in 40-foot containers moves quickly through a facility before being loaded on an outbound, 53-foot container or trailer. Major retailers have been transloading their freight for years, managing every part of the process on their own. Even before ocean carrier freight rates increased, these retailers realized tremendous cost savings by delaying allocation of goods until later in the supply chain and by using fewer, larger boxes to move the same amount of freight.
Shippers who use transloading services continue to do so because of the abundance of benefits.
While any product is technically “transloadable,” there are certain types of freight that is particularly well suited for the service:
It’s important to add that a shipper with high ocean container volumes and weekly arrivals is an especially good fit for transloading. The steady and substantial volume will ensure partial loads are not sitting idle and waiting for the next vessel’s arrival.
Today, a plethora of providers are singing the transloading song, but not all are in tune with shippers’ most pressing needs. It’s important that the provider offers several types of transloading services.
Finally, shippers should be certain that their transload provider has a broad portfolio of services. Although overall freight delivery time with transloading is extremely competitive with IPI, it can sometimes take an additional 1–2 days for a portion of the freight to reach the final destination. This brief delay is due to the transload provider staggering or “smoothing” the workload by processing a predetermined volume per day over a 4- or 5-day-period. (In contrast, a shipper using an IPI move would have all its freight containers loaded onto a single train, which would create a large spike in volume at its destination point.)
Often, consignees are pleased that the freight comes in a consistent and staggered manner, as they find it difficult to receive too much at once. Yet there are times when a certain product needs to arrive within a narrow window of time or must be expedited to meet a deadline. In these cases, it’s essential that shippers work with providers that possess a range of transportation multi-modal options. These companies are able to prioritize freight delivery and get the job done by leveraging the optimal services (expedited service, intermodal truckload or brokerage).
Importing still relies on a mode of transport that is literally as old as humankind, but the methods involved in moving goods to and from the ports have effectively changed with the times. And those times, they are a-changin’ again.
Today’s importers know that just beyond the horizon is a bold new world in which shippers will be utilizing transloading providers to get their goods from the port to inland destination. The cost advantages transloading offers makes the decision easy. It’s no wonder that international shippers are quickly abandoning the IPI ship as it sails into the sunset - and eagerly hopping aboard the transloading boat.
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