Transhipment - A redefinition

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After going through many articles in different books and electronic search engines, I could not get a satisfactory explanation about the subject ‘Transhipment’ at global point of view. Most of the information about transhipment is partial used at their own practice based on their act of business or services.

Let me re-define ‘Transhipment’ (transshipment) as below in a globalized scenario:
“The transhipment’ (transshipment) means the shipment of off-loading of goods from one location and loading to another (or one country to another) and from one carrier to another by mode of air, sea, road, either of two, or of all” .

So a Transhipment could be from a vessel to another vessel, one air craft to another aircraft, a vessel to an air craft, an air craft to a vessel, a road carrier to a vessel, a vessel to a road carrier, an aircraft to a road carrier, a road carrier to an aircraft or a road carrier to another road carrier or by means of all of them. However, the term ‘transhipment’ is widely used international trade by air and sea.

Why transhipment? What are the reasons for transhipment (transshipment)?

Transshipment can be for various reasons. However major reasons for transhipment are as follows:

Transhipment - A redefinition When the distance of movement of goods from one place to another is very far, the single service of one carrier to move goods from the origin to final destination may not be possible in most of the cases. The owner of carrier would be one for movement of goods from its origin to final destination, although the carrier changes at a transhipment location or locations.

If a shipment is on less container load (LCL) basis, a transhipment is effected for the purpose of consolidation by dividing large shipment to small and small shipments to large by deconsolidating at transhipment hubs.

Another major reason for trans-loading is to change the means of transport.

If a cargo is stored in a customs bonded area where in import duty was not been paid by the importer, transhipment procedures are followed to export such dutiable imported goods to export to other country without paying import duty under the physical supervision of customs authorities of respective country. These formalities are also known as transhipment procedures under Customs Act of various countries. For example in India, section 54 of Indian customs Act explains about transhipment procedures as explained above.

Do you have different thought on Transshipment (transhipment) procedures and formalities? Write below.


The above information is a part of Export Import Training course online

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Zaman: I think this explanation is enough about transhipment. But one thing is here, some country is not allowed to use their port. For example, Bangladesh don't allow Israil. So, importing time, it is important to clearly known about the route.

Sankaranarayanan: Sir, Kindly clarify with Customs notification or with any other details who has to file egm / igm for offline carriers when cargo moves through Bonded trucks.

Alexandre Santos: Hi. I'm not a native english speaker and I am having an issue with the therms: transloading and transhipment. Is there any difference between them? For example: if I have to transfer grain from the truck to a train, or vice-versa, then the grain would be transloaded or transhipped? Thank you so much!

Nicefro Da Rocha: Is it required to file an additional TP for placing Spares of Ship at Mormugao when already goods are been dispatched under TP from Mumbai Customs. At other Indian Ports, such items are placed on board with only permission from DC.

Linta Abraham : I am working as an internal auditor in A O Smith Water Products Pvt Ltd. I needed your advice on the following matter:Our Company is engaged in the process of manufacturing water heaters. The Company has imported water heaters from China which is lying in the factory in Bangalore. No value addition has been done on the imported water heaters. We have received an order from Nepal and the customer has agreed to take direct delivery from the factory ( Bangalore) by arranging his own means of transport. The invoice is raised in INR. Is there any legal formality that we have to follow while raising the invoice?

Ali: i have a question that if there is sight LC 60 days expiry and there are three 4 shipments to be made each after fifteen days and we ship the the first shipment in time then do we get payment of first shipment? Or the payment will be done after four shipment?

Admin: Hello Ali, Normally payment under Letter of Credit is effected against each shipment. However, please go through the LC conditions on terms of payment mutually agreed.

Admin: Linta Abraham, You can resell the said product as arranged. However, if you availed any government benefits, the amount equivalent to such benefit has to be returned to Governmnet (if any)

Kamesh: Hai could anyone advice what are major Ports for LCL for TRanshipment , which can cover all the sectors , This information will be helpfull for me a lot Please

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