Transshipment

Summary of Transshipment

The act of passing cargo from one carrier to another to continue the journey in those cases where the first carrier does not go from origin of a shipment to destination.

(Main Author: William J. Miller)

Transshipment in International Trade

Meaning of Transshipment, according to the Dictionary of International Trade (Global Negotiator): This term can have several meaning depending on the context in which is used. The literal definition is passing of shipped goods from one carrier to another, Under this strict definition, all through transport shipment would involve transshipment. A more practical definition might be that transshipment occurs whenever more than one of the same kind of conveyance is used for main carrier. For example, transshipment would take place of goods bound for Hamburg are shipped on one vessel from New York to London and then reloaded on a second vessel from London to Hamburg. However, a shipment made by truck to New York, where it is loaded on a vessel bond to Hamburg, would not be considered transshipped, since a single vessel accomplished main carriage. The issue of transshipment becomes very important with letters of credit that prohibit it. Because the hub system, widely used in vessel and air port transport, transshipments frequently take place. When considering vessel shipments, banks consider only the information shown on the transport document, even though the fact that a feeder vessel is being used can easily ascertained. Further, for air shipments, banks disregard the fact than an air waybill may show several different flight numbers and dates, as long as they shown on only one document.