Transshipment and transloading are among the many terms that define how freight moves around the world. With an economy becoming ever more global in nature, some terms become more popular in different places. Someone entering the fast-moving waters of the global logistics community could get swept away in a sea of misunderstandings.
Transshipment and transloading both refer to the transfer of goods from one form of transportation to another. However, transloading refers to the transfer of goods between different types of containers, while transshipment refers to the transfer of cargo from one ocean vessel to another while remaining in the same container.
See what the exact differences are between transshipment vs transloading and why you need to be able to tell them apart.
Transshipment and Transloading: Defining Cargo Transportation
Moving cargo through the various stages of the global supply chain takes coordinated effort and an array of supporting equipment. Current supply chain difficulties have required the addition of some creative solutions to the mix as well.
Transloading and its related term, transshipment, aren’t new concepts. Anyone in the logistics industry could tell you they have been around for a while. Now that certain supply chain aspects are becoming more visible to the average consumer, some confusion about the terms is growing too.
The use of the two terms as distinct and separate actions may depend on where you are doing business. At times, there may be nations that use the two terms interchangeably. This is especially true in Europe and Southeast Asia, locations home to a variety of languages and dialects.
This sometimes results in related services with similar words getting grouped together. Translation, especially of technical jargon, isn’t an exact science.
If you are planning any ocean shipments from these places, be sure to clarify definitions ahead of time.
What is Transshipment in Logistics?
As mentioned, transshipment and transloading both deal with merchandise transfer.
Transshipment is the movement of shipping containers, heavy haul cargo, or bulk raw materials from one ocean vessel to another. Marine containers are not emptied or have their content divided up in any way.
Transhipping can take place at designated ports called Hub Ports, or on the open water with specially designed barges. Some of these barges are near or within ports to handle heavy haul and out-of-gauge cargo that isn’t moved with standard cranes.
Internationally, transshipment barges and hubs handle a vast variety of maritime equipment and cargo.
- Oil platform rigs
- Oversized construction equipment
- Marine shipping containers of assorted cargo
- Coal, gravel, ore, and other loose material
- Catch from fishing vessels (often tuna in the Pacific)
- Marine salvage of foundered ships and equipment
The process of transshipment is generally completed with the use of dockside cranes or specially designed barges, known as derrick or transshipment barges. These are barges equipped with cranes capable of reaching and lifting containers from loaded ships.
Even within transshipment barges, there are special made-to-order varieties designed for specific commodities. Some of these barges function as ocean-based transloading facilities.
Specialty transshipment barges can load raw materials like sand or rock from dredging into containers. These get sent back to shore for transport in trucks or along railways.
Where Is Transhipping Most Popular?
Different types of transshipping are popular depending on where you go. Because some services take place outside of the territorial waters of any nation, legal complications can come up.
Logistics companies operating out of Southwest Asia are currently the most frequent users of transshipment services. Singapore’s transshipment megahub, Tuas Port, handled the transfer of 36.9 million TEUs in 2021 alone. To put that in perspective, the combined efforts of the U.S.’ busiest ports, Los Angeles and Long Beach in California, moved 20.08 million TEUs in the same year.
Other notable transshipment hubs in the same region include:
- Hong Kong
- Kaohsiung, Taiwan
- Busan, South Korea
Outside of the major ports in China, such as Shanghai, there are several smaller ports used for both imports and exports in the region. Southeast Asia is a major manufacturing zone, shipping goods produced there around the world.
Container Transshipment Numbers By Hub Port in 2021
|Port and Nation||TEU (Twenty-Foot Equivalent Units)|
|Tuas Port, Singapore||36.9 million|
|Port of Hong Kong||10.6 million|
|Busan Port, South Korea||12.3 million|
|Port of Shanghai, China||6 million|
|Port of Dunkirk, France||652 thousand|
Tuas Port in Singapore gets most of its container numbers strictly from transshipment. Others, like the Port of Shanghai, have a relatively low number compared with their total capacity numbers.
Transshipment allows smaller vessels to load containers of goods at local ports, sail to transshipment hubs, and move freight onto the massive container vessels destined for ports in the U.S. and Europe.
In these areas, using non-stop shipping services is actually more costly. Although the added time needed to transfer goods impacts final destination arrival times, it usually comes with a price break.
Meanwhile, ports in Europe are now starting to see the benefit of investing in transshipment hubs. Dunkirk is taking advantage of its position to serve as a transshipment hub for the Mediterranean Sea. Such ports would otherwise need to rely on overland shipping by truck or rail car.
While nations in Asia rely on transshipment hubs to move from smaller to larger vessels, the opposite is beneficial in Europe.
Nations like Australia use transshipping barges in the mining industries for iron ore and bauxite. Raw materials are moved from barges to container vessels for further transport. Since many mines are close to the shore, ocean barges for storage and transport make sense.
In parts of Europe and North America, transshipment is the most cost-effective way to transport break bulk items. Since these shipments cannot be moved with standard container cranes, their loading and unloading in such areas could slow down already congested container ports.
Transshipment hubs may be separate ports altogether, or they may be specially designated terminals in container ports. Transshipment barges, on the other hand, can be redeployed in various areas as needed, which makes them ideal for assisting in salvage operations.
How Are Transshipment and Transloading Different?
The main difference between transshipment and transloading really comes down to the mode of transportation being used.
Transshipment is specific to ocean-going transport and vessels.
Quantities moved via transshipment also tend to be significantly greater. In many cases, actual goods are never removed from their initial containers until reaching their designated destinations.
In this sense, transshipment actually has more in common with intermodal shipping than transload. A container can be moved by transhipping from one vessel to another much like intermodal services can move a container from a port onto railroad tracks.
Transloading generally takes place on land and involves moving materials from one type of container to another.
Transloading services cover a variety of routes, including ocean transport. Likewise, transshipment sometimes moves loose materials, such as sand, from one kind of transport unit to another - the very definition of transload. With these examples, it’s easy to see how the two terms could be confused.
Transloading also makes it possible for goods to travel directly to a distribution center or manufacturing facility, something nearly impossible with transshipment.
There are a few ways this is possible:
- Containers of office furniture coming into the Port of New York would be transloaded into dry van trailers that take them directly to a retail store or distribution center.
- Transload facilities allow oil tankers to transfer bulk quantities into oil tankers destined for refineries
In places like Asia, where transshipping is more standard, it isn’t uncommon for the term to be used to refer to traditional transload processes. This may include intermodal transport and cross dock services.
Is Transshipment Illegal In the United States?
Although there are some types of transshipping used in the U.S., there are some legal and ethical concerns involved.
To be clear, transshipment is not illegal in the U.S. if done properly and within the legal boundaries.
Most transshipment services in the U.S. have more to do with salvage operations and the occasional movement of oil rigs in the Gulf of Mexico and off the coast of California. Container transshipment is nowhere near as popular as in Asia or even parts of Europe.
There are two main reasons for this. One has to do with tariff payment and trade sanction concerns. Transshipment hubs don’t need to be overly large and many of them are run by private third-party logistics (3PLs) operations. Unfortunately, not all 3PLs are created equal.
U.S. Customs and trade officials try to closely monitor transshipment locations where things like customs fraud have been found. Some of these hubs have been used by carriers and shippers trying to hide or obscure the actual nation of origin of some commodities.
There are a variety of reasons for some importers to try and change or hide certificates of origin.
- Commodities are from countries fully sanctioned by the U.S.
- Goods were manufactured in centers known for human rights violations
- Change origin of food and produce to bypass USDA restrictions
- Changing to nations with lower or no import duties (hiding behind trade agreements)
- Attempts to bypass import quota limits and tariff-rate quotas (TRQs)
For reasons above and more, transshipment hubs are likely to gain little traction within or near U.S. territorial waters. The few that do exist are at established landside ports at specific and highly regulated terminals.
The Jones Act
The second reason for the lagging popularity of transshipment hubs within the territorial waters of the U.S. is the Jones Act of 1920, which is part of a greater Merchant Marine Act.
The Jones Act states that water-based cargo moving in U.S. territorial waters between U.S. ports can only be transported on U.S.-built, owned, registered, and crewed vessels.
Originally intended to protect the American Merchant Marine industry, the Jones Act does throw a wrench into the use of transshipping hubs. The large foreign container vessels that want to make more than one port of call in the U.S. can do so, but cannot take on any cargo from one port to the next.
Since a transshipment barge is technically a vessel - this law applies as well. Compared with other nations known for shipbuilding, the U.S. produces 10 or fewer ships a year. Most are river barges for the Mississippi or tugboats. The first part of the law, which requires the vessel to be built in the U.S., simply cannot be met because there just aren’t enough that qualify.
Ports in and around the Caribbean, such as Miami, Puerto Rico, or the U.S. Virgin Islands cannot benefit from transshipping services for their smaller ports since all the vessels involved would need to follow each requirement.
Similar difficulties come up with vessels traveling by Hawaii or Alaska. For example, if retailers in Hawaii want to stock American-made cars, they cannot take advantage of a car carrier vessel traveling from California to Japan.
- The journey from Los Angeles to Honolulu is a route between two U.S. ports.
- A vessel traveling to Japan is likely to be owned, built, and operated by a nation other than the U.S.
Although a transshipping hub or barge could be useful in facilitating trade on and off the Hawaiian islands, the Jones Act prevents it.
Use Transload Services USA to Organize Your Transload Needs
At the end of the day, transshipment and transloading services are set up in a way to meet the needs of unique industries and economies.
Transload Services USA is here to help you find transload facilities around the U.S. that meet your unique industry needs in the same way. Whether you have a single shipment or many, we want to make sure you get the best services possible.
Our full suite of services includes:
Give us a call today at (866) 757-1109 to speak with an industry expert about your needs. You can also receive an online quote directly from those same experts.
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