If you’re a freight shipper of any kind, it’s likely that at some point in your supply chain, your goods will transfer from one mode of transportation to another. For instance, if you ship by rail across the continent, but switch en route to truck for the last several miles, you have switched modes. This is referred to as transloading.
Rail transload facilities play a crucial role in shipping networks of many companies, allowing them to reap the benefits of both rail and truck transportation. When selecting a rail transload facility, you may have more options than you think. If this is your first time scouting transloading facilities, the amount of options could seem overwhelming. Or, perhaps you’ve used the same transload facilities for some time, and you’re wondering about exploring other opportunities. Alternatively, you may be reevaluating your shipping strategies to accommodate new receivers, new products, or to address recent rate hikes.
Whatever the reason for your research into rail transload facilities, there are several key factors to consider that can help you choose the best rail transload facility for your logistics. Let’s take a look at the background of rail-to-truck transloading, and the important factors involved in selecting a rail transload facility.
Background of Rail-to-Truck Transfer Terminal
Rail transload facilities have not always existed. While North American railroads expanded significantly in the middle and late 19th century, and trucking was popularized in the early 20th century, these two modes didn’t meet until the 1960’s with the pressure differential covered hopper.
In the 1960’s railroads had lost business to the trucking industry thanks to the advanced interstate highway system. In response to this, ACF Industries utilized pressure differential technology to develop the “Flexi-Flo” Hopper. The pressure differential covered hopper, or Flexi-Flo Hopper, utilized applied air pressure to the contents of the inside of the car (typically dry bulk goods) to more easily transport the contents from tank car to truck load or storage tank. In turn this revolutionized the rail industry, bringing back some of the business it had lost to the trucking industry. It also empowered shippers to more efficiently use both truck and rail shipping options to the very best of each method’s unique abilities.
Today, transload terminals offer these same benefits, with a wide range of locations operated by major railroads, shortline railroads, and other logistics businesses. Sometimes choosing the right transloading facility can be straightforward, especially when there are limited options. However, in situations where multiple choices are available, selecting the right facility is important to find lower rail rates, optimized truck and rail routes, and an improved guarantee of goods reaching their destination on time.
Selecting a Rail Transload Facility
Choosing the right rail transload facility generally involves three major factors; distance to receivers, rail lines available, and the transloading facilities equipment. Gathering necessary information about each of these factors can help you balance them, and choose a rail transload facility with maximum benefits.
Distance to Receivers
Combining rail and truck transportation using a transload facility gives you the cost-saving benefits of multimodal shipping. When comparing costs per ton mile by truck and rail, rail has the potential to cut costs in half. This means minimizing transportation by truck can dramatically reduce costs. With that in mind, it’s important to choose a transloading facility as close as possible to your receivers. However, it’s also important to consider volume in this equation. Bulk transloading can help you significantly increase efficiency and cost-savings, while improving flexibility and adaptability through your shipping operations.
A good rule of thumb is to choose a transloading facility as close as possible to your primary receiver, as this normally yields the lowest cost. However, if a transloading facility closest to your primary receiver brings you much farther away from your other receivers, more detailed calculations may be needed.
Serving Rail Carriers
Many transloading facilities are served by a single rail line. These facilities give shippers few options, and this makes many shippers subject to captive rates. Other transload facilities give shippers access to more than one line-haul rail carrier, and with more than one carrier, competition often results in higher negotiating power for the shipper. In some cases, it may be economical to move to a farther transloading facility if it is possible to negotiate competitive rail rates. Even having this option can help in negotiating alternative pricing with your existing rail carrier.
As you consider transloading facilities in your area, take a closer look at rail carriers available. A relatively minor route shift can give you access to other rail carriers and more competitive rates, especially in congested areas. These alternative routes, as well as benchmark data about your current routes and rates, can give you more leverage to effectively negotiate with your carrier.
Transloading Facility Materials and Equipment
Bulk transfer terminals typically accommodate various dry and liquid commodities such as plastics, chemicals, fuels, food-grade products, minerals, aggregates, lumber and municipal waste. Safely and efficiently moving these materials to and from rail cars and trucks requires specialized equipment. It is important to ensure that your transloading facility can accommodate the products you’re shipping, especially when working with hazardous materials.
Consider the materials or items you’re working with, and the types of equipment required to safely move them from one mode to another. Transload facilities may use the following to move materials on-site:
- Mechanical conveyance or lifting equipment: This might include conveyor belts or other methods like forklifts or cranes.
- Pumps: Many different types of pumps, such as those designed for flammable liquids or acids, may be used, depending on the materials.
- Pneumatic conveyance: Pneumatic conveyance minimizing dust and spillage when transporting many plastics and powders.
- Steam boiler: Materials that require reheating in order to transport may require a steam boiler.
- Spill containment: Caustic or otherwise hazardous materials require spill containment procedures and barriers.
Some transload facilities specialize in certain materials. Though it isn’t common, these facilities may refuse shipments that pose particular risks to other shipments. For example, transloading facilities may refuse explosive or radioactive materials due to a high level of liability and risk to other shipments. In these cases, alternative shipping methods will be required.
How to Select a Rail Transload Facility
Finding the right rail transload facility can be a challenge, especially if you’re willing to adjust your current route in order to avoid captive lanes. To select a rail transload facility and decide if transloading is helpful for your situation, it’s first helpful to look at benchmark data and assess your current rates. See how they compare to others in your industry. This can show you where it may be most lucrative to consider transloading and alternative routes. Use the transloading facility map to take a closer look at the transloading facilities available to you, as well as the equipment available at each location. When you find a facility that works for you, contact the facility manager to get more information. Or, take a look at our transload facilities to determine which best suit your materials and routes.
Selecting the right transloading facility is an essential component to a cost-effective overall bulk terminal strategy. This can help you negotiate more competitive rail rates, get closer to your largest receivers, and protect your shipments with top-quality equipment and safety measures.
