Transloading Strategies For Supply Chain Crisis Management

Problems plague supply chains worldwide, as the stormy seas of port congestion, labor strikes, truck driver shortages, and shifting consumer demands create chaos. Transloading is helping to calm these waters.

Transloading switches goods between different transport modes to ease challenges caused by disruption and keep deliveries on track.

By allowing retailers and suppliers to work with smaller loads, transloading:

• Boosts flexibility and efficiency,
• Cuts costs, and
• Enhances responsiveness.

When transloading is used, the results can be staggering. For example, when shipments were piling up in port during the pandemic, a major retail chain turned to transloading to navigate the mess.

By moving goods from large cargo ships to smaller trucks and rail systems at nearby logistics hubs, this retailer sped up delivery of seasonal products to distribution centers. This strategic shift kept shelves stocked and helped the company adapt to the fast-changing market.

With customers expecting faster deliveries and more flexibility, transloading is the key that helps companies unlock transport capabilities during disruption and seize growth opportunities amid uncertainty.

The Growing Challenges Facing Global Supply Chains

The first half of 2024 challenged supply chains, as geopolitical tensions, severe weather, logistics complications, and other obstacles put them to the test.

Disruptions can delay transport, drive up costs, and lead to product shortages. What’s more, the interconnected nature of global supply chains means a disturbance in one region can have cascading effects worldwide.

Media reports show global ocean shipments in Q2 2024 took an average of 66 days from booking to port clearance, an eight-day increase from the previous year. And disruption is largely to blame.

Let’s examine common disruptions that today’s supply chains face.

• Natural Disasters. The impact of weather-related events like droughts, fires, flooding, and La Niña continues to disrupt operations and generate shipping challenges. For example, drought conditions, traffic restrictions and water shortages in the Panama Canal are delaying shipments.
• Port Congestion. Ongoing congestion causes delays that can last days or even weeks. And it’s an issue at ports across the globe. Consider that, Singapore's congestion is at its highest since the pandemic, caused by traffic rerouting to avoid Houthi attacks near Yemen. Vessel divers in the Red Sea are increasing volume in Colombo. East Coast ports are congested after a brief dockworkers' strike, and West Coast ports have dealt with congestion for years.
• Labor Shortages. The lack of skilled workers across the globe is well documented. Recently, it has been exacerbated by the East Coast dockworkers' strike. Labor problems combined with port congestion are driving shipping delays.
• Geopolitical Conflicts. Right now, the conflict in the Red Sea has compelled carriers to take longer routes around the Cape of Good Hope, extending transit times and decreasing shipping capacity.
• Pandemics. The COVID-19 pandemic highlighted the significant impacts of a global health crisis. A global pandemic can cause labor shortages, factory closures, and logistical challenges. This disruption can also significantly change demand patterns, put pressure on inventory levels, and create uncertainty in shipping schedules.
• Supplier Bankruptcies. As inflation, operational costs and economic challenges spiral out of control, they too are disrupting global supply chains, leading to production delays, rising costs, and shortages of essential materials.

Companies must be prepared to navigate these challenges. A preplanned transloading strategy can make a supply chain more agile, enabling companies to pivot quickly, reduce downtime, and keep customers satisfied, even during disruption.

Transloading as a Dynamic Solution for Supply Chain Issues

The Council of Supply Chain Management Professionals defines transloading as “the transfer of goods from one transportation mode to another during the journey from the manufacturer to the end consumer. This can involve moving products from a truck to a train or from a ship to a truck as part of the shipping process. “

Transloading occurs when a shipment requires a change in transportation methods to reach its destination. For example, if a shipping container starts its journey by rail but cannot finish it that way, it may be transferred to a truck to reach its final destination.

However, transloading isn't restricted to just rail and truck transport; it can also include planes and ocean freight vessels. A shipment on an ocean vessel may undergo transfers in port, moving from a train to a plane, to reach its intended location.

Though transloading transfers goods from one mode of transportation to another, it is not the same thing as cross docking or intermodal, which are actually vastly different methods of moving goods from Point A to Point B.

Transloading involves using specialized facilities to prepare, store, and transfer shipments between different modes of transportation. Cross docking transfers cargo directly from inbound trucks to outbound trucks with minimal storage. Intermodal transport keeps freight remains in its original container and transfers the container between different modes of transportation.

Here’s a basic overview of how transloading can work:

• Unloading at the Port. Goods arrive at a port and are received, organized, prioritized and prepped for the next leg of their journey.
• Transport to Transload Facility. Products are then loaded onto trucks for transport to a transload facility.
• At the Transload Facility. A transload facility processes incoming cargo and schedules shipments to meet customer requirements.
• Transfer to New Transport Mode. Goods are securely loaded, and documents prepared for transport, with careful logistics management for truck and rail. The transfer method to truck or rail car depends on the type of product:

o   Pumps are used for liquids.

o   Cranes for heavy or bulk items.

o   Forklifts for pallets or boxed goods.

o   The choice of railcar also varies, with options including boxcars for general cargo, tank cars for liquids, or flatcars for large, heavy items.

• Final Delivery. Once loaded, the products are transported to their destination. Upon arrival at the terminal, the goods are unloaded and prepared for distribution. Trucks may transport goods for last-mile delivery to customers.

How Transloading Strategy Helps in Risk Management and Business Continuity

Transloading enhances supply chain agility by allowing businesses to quickly adapt to changes in demand, shipping routes, or inventory levels. This flexibility can improve service levels and competitiveness.

Transloading also increases capacity without infrastructure investment. Companies can scale operations and increase throughput by using existing facilities and equipment.

Shipment consolidation is another advantage of transloading. Combining multiple smaller shipments into a single larger load lowers transportation costs, reduces the number of trips required, and reduces a company’s carbon footprint.

Transloading also reduces operational costs by optimizing transportation routes and using cost-effective transport modes. Quick transfer of goods between modes also enhances logistics efficiency.

Implementing a Transloading Strategy for your Business

Implementing a transloading strategy into the supply chain can enhance efficiency and flexibility. Here are some key tips to ensure a successful integration:

1. Assess Current Supply Chain Challenges. This assessment helps identify bottlenecks, inefficiencies, and areas for improvement in existing logistics processes. Understanding the root causes of delays and increased costs helps companies develop a targeted transloading approach.
2. Evaluate Product Types and Shipping Needs. Not all products are appropriate for transloading, so it's essential to evaluate the goods and their shipping requirements. Consider factors such as fragility, perishability, and volume. This assessment identifies the best transportation methods and handling processes for transloading.
3. Choose Strategic Transloading Locations. Find facilities strategically positioned near major transportation hubs, including ports, rail yards, and highways. Being close to these nodes can greatly decrease transit times and expenses. Evaluate the capacity of these facilities to manage specific products and volumes.
4. Integrate Technology for Tracking and Coordination. Companies can monitor progress and make informed decisions by implementing a robust tracking system that provides real-time visibility into shipments. Using technology for logistics coordination streamlines communication and reduces delays and errors.
5. Optimize Inventory and Storage Management. Efficient inventory management is crucial when integrating transloading into the supply chain. Companies must have clear insight into their inventories and the storage capacities at transloading facilities and final destinations. Optimization can reduce excess inventory or storage costs.
6. Streamline Customs Clearance if Applicable. Customs clearance processes must be streamlined for international shipments relying on transloading. Work with a Customs broker to streamline documentation and reduce border delays.
7. Partner with Reliable Transloading Services. Look for companies with a proven track record in managing transloading operations. A strong partnership boosts supply chain resilience and ensures careful handling of goods.

Following these tips helps companies implement a transloading strategy that enhances supply chain efficiency and adaptability, improves service levels and saves money.

Choose the Right Transloading Service Provider

To achieve supply chain optimization, cost reduction, and increased efficiency, a reliable transloading provider is essential.

The first aspect to evaluate in a transloading company is their industry experience and expertise. A company with a solid history will possess the skills and knowledge necessary to manage cargo effectively and safely. Look for established companies with a track record of reliability and professionalism.

Leading transloading companies also offer a wide range of customizable services to meet unique needs. These services may include warehousing, cross-docking, inventory management, and transportation logistics.

The location and quality of facilities are also vital considerations. Ideally, transloading companies should be near key transportation hubs to minimize transit times and costs. Well-maintained facilities equipped with the latest technology ensure safe cargo handling. The right provider also can accommodate various types of cargo, such as bulk, oversized, or hazardous materials.

Prioritize transloading companies using advanced technology for cargo tracking and management. Features like real-time tracking, automated inventory systems, and sophisticated communication tools can greatly improve the clarity and efficiency of the transloading process.

The right partner also complies with safety standards and boasts a solid safety history. The provide thorough staff training, maintain their equipment, and have detailed safety procedures in place. This transloading provider also understands the legal requirements for transporting diverse cargo and can secure all necessary documentation and permits.

Finally, opt for a provider that prioritizes communication and is attentive to the company’s needs. They should provide timely updates on cargo status and be easily reachable to address any questions.

Deringer, Your Trusted Supply Chain Partner

By selecting AN Deringer as your transshipping partner, you can be confident that your shipments will be delivered to their intended location, even in the face of disruptions.

CTA: Looking to streamline your supply chain? Explore how Deringer’s logistic services can help keep your shipments moving efficiently during disruption.