Getting Involved in Transloading
When executed correctly, transloading goods from one transport mode to another can help shippers increase flexibility and supply chain velocity, reduce cycle times, effectively plan distribution to meet market demands, and reduce shipping costs. But transloading can be a tricky practice, warns Dan Bourcier, deconsolidation manager for APL Logistics, a logistics provider based in Oakland, Calif. To help you avoid common pitfalls when getting involved in transloading, Bourcier offers these 10 tips.
1. Steer clear of a "one-track" approach. Remember, transloading is multimodal; it does not only involve rail. Many transloading operations help shippers blend ocean and ground transportation by pairing international ocean shipping with domestic trucking or intermodal rail, depending on which offers the best combination of cost and speed to market.
2. Become familiar with transloading economics. Convincing management that extra shipment handling and transfers will reduce supply chain costs may be difficult. Arm yourself with the facts: on average, the contents of three standard 40-foot ocean containers fit in two 53-foot domestic trailers. So, using transloading, your company pays for two inland shipments instead of three.
3. Use transloading to offset supply chain volatility. As supply chains become increasingly global, they also become more volatile in terms of delivery reliability. The flexibility transloading affords can help. For example, you can fit reloaded shipments into an intermodal trailer or truck, depending on which has the capacity to meet your speed-to-market needs at that particular time. Or, you can expedite shipments by using trucks with team drivers instead of intermodal to make sure hot orders meet customer shipping expectations. You not only offset volatility, but you also can shave 25 to 40 percent off transit time with this method.
4. Combine transloading with cross-docking and deconsolidation. Embracing transloading means you already rehandle shipments, so why not add cost-cutting supply chain functions to the process? Instead of transferring all goods from one ocean container into one domestic trailer destined for one location, deconsolidate the contents into separate trailers bound for several destinations, and combine the goods with other shipments bound for the same destinations. Or, consider a DC bypass/direct-ship program: ship a portion of inbound freight directly from your transload facility to your end customer, then transload and ship the balance to your distribution center. Transloading also provides the opportunity to perform value-added services such as labeling for direct-to-customer shipments.
5. Set your clock. Unloading, handling, and reloading shipments can be time-consuming. Expect a transload turnaround to take 48 to 72 hours from the time an ocean container is available at the port to the time it leaves the transload facility. Be sure to factor transloading time in your total transit estimates.
6. Realize that transloading is not a one-size-fits-all solution. The added costs associated with rehandling product may outweigh the transportation savings that come with transloading for East Coast importers, who are usually closer to their end users and have shorter ground transit times than West Coast importers. Also, consider product characteristics, size, shape, and weight when deciding whether to adopt transloading. Awkwardly shaped, fragile, or heavy cartons are poor candidates for transloading.
7. Choose your transloading providers carefully. If you decide to transload shipments, you will likely work with a 3PL, an intermodal marketing company, a drayage provider, and a carrier. Do your homework when screening providers. Consider their transloading experience and whether they have enough capacity to handle your throughput volumes. Examine the transloading center's proximity to your entry port. Look closely at the level of integration the providers can achieve. Check out their technology and what kind of visibility they provide.
8. Invest in technology. Transloading improves the way you transfer goods—make sure your information transfer practices are equally agile. Create a web-based supply chain visibility platform where you can integrate electronic data interchange information and advanced shipment notices (ASNs) with your enterprise resource planning system. You may also want to consider UCC128-compliant label printing and carton-level bar-code scanning.
9. Plan ahead. It's never too late to begin transloading operations, but the longer you wait, the more likely you are to face stiff competition for the best transloading space and the most reliable carriers. When partnering with a single-source provider to coordinate and integrate your transloading needs, allow nine months to one year to prepare a request for proposal, sift through responses, and make your selection.
10. Include your transloading provider early on in the shipping process. Many companies assume transloading starts when a drayage operator drops a load off at the facility. Companies that allow their transloading provider to become involved earlier in the shipment process, however, often receive a higher level of service and reliability. If you let your transloading facility coordinate drayage, for example, it can prioritize which containers should leave ports first, and alert dray operators to the best time of day to make a delivery. Or, if you communicate with your provider by sending electronic ASNs while goods are in transit, the provider can plan accordingly and get goods out the door faster.