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What is transshipment?

Transshipment is the transfer of cargo from one shipping vessel to another at an intermediate port in a different country. In this blog, learn about its process in the blog.

As a part of the export logistics process in international trade, transshipment is a crucial step involving the transfer of goods from one transportation vehicle to another during the course of a shipment, without goods being stored or processed at an intermediate point. It ensures that goods are transported efficiently in a cost-effective way to their final destination, particularly in cases where direct shipping services are not available.

What is transshipment?

Transshipment is the transfer of shipments or goods from one shipping vessel to another at an intermediate port or hub in a different country. It is often used to transport goods to their final destination when direct service is not available due to a variety of reasons such as shipping routes, cost, and logistics¹. For instance, when a shipment, that’s originally going from the US to Japan, is sent via a truck to a nearby port in the US, then shipped to a port in China, and finally shipped to Japan – it’s called transshipment.

What are the types of transshipment?

There are two main types of transshipment²:

Silent transshipment

In a silent transshipment, the cargo is transferred from one vessel to another without being reported to the importer. The transfer is kept confidential, and the original vessel carrying the goods continues to the next port of call.

Active transshipment

It is the opposite of the silent type and involves cargo being reported to the importer or consignee of the goods. The transfer of cargo is recorded, and the importer or consignee is informed of the new shipping details.

Transshipment process

Below is the commonly followed transshipment process³:

Arrival of cargo:

Cargo arrives at the initial port of loading and is checked in for transport.

Loading of cargo:

Cargo is loaded onto the initial vessel for transportation to the transshipment port.

Transportation to transshipment port:

The initial vessel carries cargo to the port, where it is offloaded for transfer to the next vessel.

Unloading of cargo:

Cargo is offloaded from the initial vessel and is held at the transshipment port for transfer to the next vessel.

Customs and documentation:

At the transshipment port, customs and other regulatory authorities verify the cargo and ensure that documentation is in order for the transfer of cargo to the next vessel.

Transfer of cargo:

Cargo is transferred to the next vessel for transportation to its final destination. This can involve loading it onto a new vessel or moving it to another mode of transportation such as a truck or plane.

Loading onto the next vessel:

Cargo is loaded onto the next vessel for transport to its final destination.

Transportation to final destination:

The next vessel carries it to the final destination, where it is offloaded and delivered to the consignee.

Throughout the process, there are various factors that can affect the efficiency of transportation including logistics, customs requirements, regulations, and security concerns. It is important for all parties involved in the transport to coordinate effectively to ensure that the process is completed without any hassles.

Need of transshipment in transportation of goods

There are several reasons why transshipment may be necessary in the transportation of goods:

Geographical constraints:

Sometimes, the final destination of a cargo shipment may be inaccessible by ocean or land transportation. In such cases, cargo must be transshipped to a port or location that is more accessible to the final destination.

Cost savings:

It can often be a more cost-effective option for transporting goods. This is especially true when the cost of transporting goods directly to their final destination is expensive due to long distances or logistical challenges.

Security concerns:

In some cases, it may be necessary to transship cargo to avoid risks associated with certain routes or ports.

Political or legal restrictions:

It may also be necessary to avoid political or legal restrictions on certain types of goods or shipments. Hence, it is used to bypass trade embargoes or other regulations that restrict direct shipments.

Logistics:

It can be used to optimize logistics and minimize transportation time, especially in cases where direct transportation is not possible or practical.

How to track transshipments?

Tracking transshipments can be complex due to the involvement of multiple parties and the potential for cargo to be transferred between different vessels and locations. Some of the strategies that can be used to track shipments and ensure that cargo is delivered to its final destination are:

Use a freight forwarder:

A freight forwarder can handle logistics of transshipment and provide tracking information throughout the process.

Electronic tracking:

Electronic or e-tracking systems can be used to monitor the movement of cargo and provide real-time updates on its location and status. This can include GPS tracking, RFID tags, and other technologies.

Documentation:

Detailed documentation can be used to track transshipments and ensure that all parties are aware of the location and status. This can include Bill of Lading, customs documents, and other paperwork.

Communication:

Effective communication between all parties involved in the transshipment process is essential to track cargo and ensure that it is delivered to its final destination.

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Frequently Asked Questions

What is the role of transshipment?

The role of transshipment is to facilitate the movement of cargo from one location to another, typically between different modes of transportation such as from a ship to a truck or from a truck to a train.

What are the advantages of transshipment?

Transshipment offers several advantages for businesses and the transportation industry:

· Cost savings: It can help reduce transportation costs by allowing cargo to be consolidated into larger shipments and using more efficient transportation modes.
· Flexibility: It provides greater flexibility in transportation options and enables cargo to be transferred between different modes of transportation, routes, and locations as needed.
· Accessibility: It can help overcome geographical barriers and enable access to markets that may otherwise be difficult to reach.
· Lower risk: It can help avoid risks associated with specific routes or ports and bypass political or legal restrictions on certain types of goods or shipments.
· Increased efficiency: Transshipment can help optimize logistics by consolidating cargo from multiple suppliers into a single shipment or distributing cargo from a central hub to multiple locations, making the transportation process more efficient.

What is the difference between direct shipment and transshipment?

Direct shipment involves moving cargo from its point of origin directly to the final destination using a single transportation mode. The cargo is not transferred between different transportation modes or locations, and the entire transportation process is handled by a single carrier. Transshipment involves the transfer of cargo between different modes of transportation or locations to reach its final destination. This can involve moving cargo from a ship to a truck or from a truck to a train, for example, to get to a location that is not directly accessible by the original mode of transportation. It typically involves the involvement of multiple carriers and logistics providers.

What is the transshipment time?

Transshipment time refers to the duration it takes for cargo to be transferred between different modes of transportation or locations during the process. It includes the time it takes for cargo to be unloaded from the original transportation mode, moved to a different transportation mode or location, and then reloaded onto the new transportation mode.

What are the types of transshipment problems?

Some of the challenges faced during transshipment are:
· Delayed transfer
· Cargo damage
· Loss of cargo
· Customs clearance issues
· Capacity constraints
· Security risks
· Regulatory compliance

How does a transshipment lead to shipping delays?

Some of the common ways that transshipment can lead to shipping delays include:
· Coordination challenges
· Customs clearance
· Capacity constraints
· Handling and packaging

Published on February 23, 2023.

Sources:
1. https://www.shippingandfreightresource.com/what-is-transhipment/
2. https://www.sevenseasworldwide.com/need-help/how-does-international-shipping-work/what-is-a-transhipment/
3. https://www.container-xchange.com/blog/transshipment/
4. https://blue-whale.in/logistics/transshipment/
5. https://www.cargoflip.com/post/how-to-track-shipping-containers
6. https://fresatechnologies.com/wp-content/uploads/2020/02/Transshipment.pdf
7. https://www.dripcapital.com/en-in/resources/blog/transshipment
8. https://www.container-xchange.com/blog/transshipment/

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