How is passenger baggage transferred, and how does it happen so quickly?
On big airliners, baggage is mostly stowed in containers, called Unit Load Devices. They are packed at the departure airport and pre-sorted to minimize the amount of sorting at a hub, but normally need to be emptied after arrival so the baggage can be re-sorted.

On regional jets and older aircraft which don't take ULDs, bags are still loaded individually and transported to and from the aircraft on open carts which are assembled to small trains (see picture below).



Airport baggage transportation (picture source)

Once the ULDs or the carts arrive inside the terminal, the bags are unloaded into the baggage handling system, a collection of conveyor belts, barcode readers and switch points. Since every bag received a sticker with a big barcode upon check-in, the reader can report the barcode of the next bag to a computer wich sets the switch point accordingly. Traditional systems employ humans with a portable barcode reader for putting the bags on the right belts.



Baggage tags (picture source)

The most recent systems put the bags on plastic trays which have RFID tags attached, and the RFID information is used for switching the conveyor belts. By loading the bags on standard size trays, the flow of bags is simplified. However, a baggage handling system is a complex piece of machinery, and some new airport terminals were delayed because the system did not work initially, or opened with lots of mis-routed or even mangled bags in their first months of operation. London's Terminal 5 and Denver airport, which went back to manual sorting after 10 painful years of trying to get their system working, come to mind.

When they are sorted, the bags are deposited either at a ULD packing station or an empty cart for transportation to their respective flight. At the end of their journey, they are routed onto baggage carousels for pick-up by their owners.



Baggage carousel (picture source)