More Shippers Turn to Transloading to Streamline Supply Chain

By The Journal Of Commerce, PRNE
Sunday, September 19, 2010

NEWARK, New Jersey, September 20, 2010 - Retailers and manufacturers anxious to reduce costs, lower their risk and
get goods into the right place at the right time are making key operational
changes in their supply chains to remain lean and flexible. Industry experts
report an increase in a tool known as transloading on the West Coast over
direct shipping to the Midwest via intermodal rail, according to the cover
story in this week's edition of The Journal of Commerce.

    (Photo: )
    (Photo: )

By repacking inbound container shipments into larger domestic containers,
shippers save on inland transportation costs and gain more inventory
flexibility. Various goods can be combined in a shipment to one store, and
decisions on where goods should end up can be made later in the distribution
chain. The tactic adds some handling costs and complexity at the front end
when imports arrive, but more companies are saying the trade-off works
because they end shipping fewer containers inland, and the ability to
postpone destination decisions is important in the fragile economy.

There is a troubling trade-off for U.S. exporters, however, because the
practice leaves fewer ocean containers available at inland distribution
points, exacerbating a shortage of equipment for agriculture and light
manufacturer companies looking to send goods abroad.

The Intermodal Association of North America estimates 29 percent of U.S.
import shipments were transloaded into 53-foot containers last year, up to
30.2 percent in the first half of 2010. Carriers — who often end up
responsible for the repositioning costs — are encouraging the shift by
lowering ocean rates from Asia to the West Coast.

Stronger growth of the method, The Journal of Commerce reports in this
week's Cover Story (
), will depend on strategic management of equipment to avoid costly container
repositioning, increase of customers with a year-round commitment to
transloading and generating two-way traffic to balance the flow of equipment.

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