Transportation and transshipment are processes in the shipping sector that facilitate the movement of goods over long distances. Shippers wanting hassle-free worldwide trade prefer the use of transshipment, where the goods change modes of transportation to assist door-to-door services. Freight forwarders and 4PL service providers also ease the transportation process by acting as intermediaries between the shipper and the transportation service provider. Trucks, trains, ships, and planes are commonly used for international or domestic transportation. Although transportation and transshipment are involved in the movement of goods, they are not the same. Let us learn more about the difference between transportation and transshipment.

What do you mean by transportation?

Transportation in the supply chain refers to moving goods or passengers from one point to another. The transportation industry is one of the integral components of the global supply chain, ensuring the timely fulfillment of worldwide demand. The import and export business of raw materials and manufactured goods deeply relies on the logistics and transportation sector to facilitate a seamless supply. This transportation takes place using four primary and commonly used modes: road, rail, sea, and air. Shippers can choose from these modes of transport based on their shipping requirements to transport goods nationally and internationally.

With the increase in supply chain demands, technological advancements in the transportation industry are aiding shippers in improving agility and safety in transporting goods. Trucks, trains, ships, and planes integrate modern technology such as GPS (global positioning system), automation, artificial intelligence, and IoT (Internet of Things) in shipping. Let us learn more about the various modes of transport used in the supply chain.

Modes of transportation

The four modes of transport widely used in the supply chain are as follows – 

1. Road transport – Road transportation is commonly used for local, regional, and short-haul transportation of goods. It is flexible, providing door-to-door delivery services and accessibility to remote areas. For this purpose, trucks transport smaller shipments, perishable goods, retail distribution, and just-in-time deliveries. It is also one of the widely used modes of intermodal transport in remote areas.

2. Rail transport – Another commonly used mode for moving goods is railroad transportation. It efficiently ships goods overland, particularly over medium to long distances. Rail cars and trains are often used for transporting bulk commodities, automobiles, intermodal containers, and heavy machinery. It offers a cost-effective and environmentally friendly alternative to road transportation for certain types of cargo.

3. Sea transportation – Shippers looking for international long-distance transportation choose to move goods by sea using ships and vessels. Maritime shipping is ideal for large-scale shipping of goods over long distances. By using different types of ships, shippers can transport various goods, incredibly bulky or heavy items like raw materials, machinery, and commodities.

4. Air transportation – Moving goods using planes is the fastest method for shipping goods over long distances. It is suitable for high-value, time-sensitive, and perishable goods that require rapid delivery. Air freight is commonly used for electronics, pharmaceuticals, fresh produce, and other goods where speed is a priority.

What do you mean by transshipment?

Transshipment transfers goods from one mode of transportation to another while the goods are in transit from the origin to the destination. In the case of long-distance international transportation, it is impossible to deliver the goods by loading them on only one mode of transport. Due to the lack of direct routes between the origin and destination, shippers choose to either change the mode of transport or switch between the same mode of transport. For example, transportation may be initiated by loading them on trucks, unloading at ports, and loading vessels for further transit. In some instances, goods must change from a larger vessel to a smaller one to reach their destination.

Transshipment benefits shippers in cases of geographical constraints, infrastructure limitations, or operational considerations. It can occur at intermediate points such as ports, terminals, or logistics hubs where different modes of transportation converge. Transshipment facilitates the efficient movement of goods across different transport networks and helps optimize logistics and supply chain operations. 

Use of transshipment

1. Multimodal transportation – Transshipment is an integral part of multimodal transportation, where goods are transported using a combination of road, rail, air, and sea routes. Transshipment hubs are used as interchange points in multimodal transportation, where cargo transfers between different modes occur. This helps maximize efficiency and flexibility in logistics operations.
   
2. Cross-docking – In logistics and warehousing, transshipment is often used in cross-docking operations. It refers to the process of unloading goods from one mode of transport and immediately loading them onto another outbound mode of transport. Transshipment helps reduce the time spent temporarily storing goods at container depots or container terminals, reducing inventory holding costs and improving order fulfilment speed.
   
3. Streamlining global supply chain – The transport sector’s wide network is optimally utilized using the transshipment process to leverage customers. Transshipment facilitates the integration of global supply chains by connecting production facilities, suppliers, distribution centres, and markets worldwide. It enables companies to manage inventory levels, meet customer demand, and respond to market fluctuations effectively.

Difference between transportation and transshipment 

Transportation and transshipment are aspects of the global supply chain without which the shipping industry would fail. Although both help move goods from one location to another, let us learn more about the difference between transportation and transshipment.

1. Scope – Transportation encompasses the entire process of moving goods from their point of origin to their destination. On the other hand, transshipment is a type of transportation that occurs at intermediate points such as ports, terminals, or logistics hubs where different transport modes converge.
   
2. Purpose – primary purpose is to facilitate the movement of goods across distances. It involves choosing the most suitable mode of transport based on factors such as distance, speed, cost, and type of cargo. Transshipment aims to optimize logistics operations and improve supply chain agility by enabling seamless transitions between various modes of transport. It is used to transport goods to remote locations and provide door-to-door service. 

Technologies used in transportation and transshipment

Various technologies are used in transportation and transshipment to allow the seamless movement of goods.

1. GPS – A global positioning system helps with route optimization and tracking vehicles in real time. It also helps avoid traffic or congestion and provides sustainable routes for shipping. Trucks, trains, and ships use GPS technology in shipping.
   
2. Automation – Advancements have led to the integration of automation in vehicles and ships. Automated guided vehicles are used in ports to facilitate the transfer of goods to the quay. Autonomous ships, which operate driverless and crewless, benefit the maritime industry. Autonomous trucks are also emerging to increase the operational efficiency of the supply chain.
   
3. RFID – Radio frequency identification technology is also used in ships and other modes of transport to track their location in real-time. It helps track the movement of assets such as shipping containers, reducing loading and unloading time by knowing the exact location of containers.

These technologies in transportation and transshipment facilitate the agile and safe movement of goods across the global supply chain.

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