The shipping activity that involves the transportation of goods to an intermediate location or a third party before reaching the final destination is known as transhipment. This is a system that is used for a variety of reasons, which include:
- It’s impossible to move the shipment from origin to the final destination in one go
- Different shipping methods being used throughout the entire journey
- Bulk shipments go to the transhipment centre before being split up into different loads
- Can be cheaper than sending goods directly especially when shipping to remote locations
- Multiple shippers might combine forces on a transhipment to cut costs
There are risks involved and government officials often monitor transhipment locations to fight fraud. Some of the problems include greater risks of damages or losses, so special insurance is required for added protection. When a journey is broken into sections there is an increased risk of problems occurring as more vulnerabilities are created. However, it can provide a cost effective solution to some when a direct shipment isn’t required.