Transloading has been around since the age of steam and harness, but this multimodal transportation practice has seen a marked resurgence in the past five years. According to some estimates, the volume of transloaded cargo has grown by 50 percent, with growth rates varying considerably depending on the geographic region, industry, and product involved.

Briefly, transloading is the practice of transferring product between truck and rail transportation. It allows shippers and their customers to enjoy much of the cost benefits of rail transportation without having a rail siding at their door—at the least an expensive proposition, and for many companies, a physical impossibility. In most instances, a transload facility operator, third-party logistics company, or transportation broker facilitates transloading for both the shipper and the consignee. These companies coordinate truck and rail connections and frequently offer warehousing and inventory management services to facilitate storage and delivery.

The objective of transloading is to get the goods as close as possible to the point of final processing, packaging, and consumption as economically as possible. In a typical transaction, a bulk shipment moves by rail to a transload facility, where it is offloaded with specialized equipment that's designed to handle the specific commodity. Depending on the shipper's or the consignee's requirements, the bulk product may then be packaged and warehoused at the transload facility, scheduled for delivery in smaller quantities to the consignee for further processing, or delivered directly to an end user. (See the chart below for some examples.)

Transloading's roots are in bulk shipment of raw and semi-finished commodities such as grain, dairy products, metals, forest products, and chemicals. But the practice isn't limited to those types of commodities. Today some shippers are successfully applying this technique to shipments of higher-value goods in a bid to accelerate turnover and reduce inventory costs.

For shippers that are considering switching from a single transportation mode to transloading, there are some useful benchmarks to guide their decision. One consideration is whether the distance is great enough to make the cost of transloading worthwhile. "Typically, 600 miles is the differentiation breakpoint for transloading," says Charlie Ring, business development manager for Ventura Transfer Company, a transloading firm with nine facilities in California and Arizona. Ring also suggests comparing the transportation and handling costs associated with trucking and transloading. "In a true bulk transloading operation, a shipper can send out four truckloads of product on a railcar and typically pay the equivalent of only two-and-a-half truckloads in price," he says.

That's one reason why Dial Corp., the Scottsdale, Ariz.-based manufacturer of household cleaning products, now relies on transloading to handle inbound shipments of "AES," a chemical compound used in manufacturing Purex laundry detergent. Dial had been shipping the viscous, temperature-sensitive substance in tank trucks from the supplier in St. Louis to a plant in Los Angeles. Pete Opsomer, Dial's transportation resource manager, was looking for a more cost-effective way to move the material. He explored the possibility of converting to transloading and ultimately selected Ventura Transfer to provide that service.

Today the supplier ships AES in ISO tank containers by double-stack train. At the destination terminal in Los Angeles, Ventura uses a special water-heating process to maintain the product's temperature and a custom-built hydraulic tractor to move and tilt the containers during unloading. The product is then trucked to Ventura's facility, where it is held at the optimum temperature while awaiting shipment to Dial's plant.

This procedure has not only slashed Dial's linehaul costs, but it's also eliminated the formation of significant amounts of "heel," or thickened material that typically forms at the bottom of tank trucks or containers and becomes waste. "If you combine the expense of the former single-mode trucking operation versus transloading and the elimination of the waste problem, thanks to transloading we've probably reduced our costs by approximately 35 percent," Opsomer reports. Continued...

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