What is Transshipment?
Transshipment is a process where one package or container is unloaded from one vessel and loaded onto another and eventually shipped to its final destination. In short, the package or container reaches a particular location first rather than the end destination. It is unloaded at the site, re-loaded onto a different vessel, and transported to the endpoint.The intermediate location or the point of shipment transfer is known as the transshipment hub.
For example, a Canadian transporter may want to ship a large container of coffee to Australia. However, they may have to ship to the US first and then Australia. In this case, the port in the US would be the transshipment hub, and the shippers will follow the transshipment process.
For this container to reach Australia, the shipper will first send it from a Canadian port to a US port. The package will then be offloaded from the Canadian vessel to the port. The shipment will go onto the vessel departing from the US port, ready to be shipped to Australia. As a result, the container will be counted twice in the entire transportation process as two different cranes handle it.
Note: Transshipment may include containers and packages from any modes of transport, including rail, road, and sea, or from one mode to the other.
The following flow chart displays the transshipment process:
What is the Purpose of Transshipment?
There may be multiple reasons behind a transshipment, from a transport change to a transfer in vessels.
Mode of transport changes: In some cases, goods may need to be shipped by two modes of transport. Such instances call for a transshipment. For example, a shipment must be transported by road from point A to B and via sea from point B to C.
Reduced costs: Irrespective of the port, direct shipping is usually costly. The transshipment option may take longer but ensures minimum transportation costs.
Large vessels challenges: Every port doesn’t berth large vessels. Transshipment is the best option if containers are shipped in a large craft. The goods will be transferred to a smaller vessel and can quickly arrive at the destination port through this process.
A transshipment usually occurs when there is no direct trade route between the export and the import location. However, there may be other reasons:-
When the direct route between the two destinations is expensive.
When there is no direct route between the two locations.
When the exporter and importer want to trade goods despite the trade restrictions or bans between their countries. In that case, they may choose to ship via a third country.
How does a Transshipment Lead to Shipping Delays?
Transshipment may be the most cost-effective option, but it is slower than other transport methods. The following are the disadvantages of using the transshipment process, which may lead to delays.
Prolonged loading and unloading: If a vessel is large, loading the goods may take anywhere between a day to one week. The same applies to unloading. This leads to significant shipment delays.
More extensive distance coverage: Transshipment usually results in the vessel covering a longer distance than the direct route.
How to Track Transshipments?
The best way to track transshipments is through the shipping line’s website. Most shipping services have introduced cargo tracking systems that let the consignors and the consignees track their goods.
A bill of lading (BOL) is generated when a container is sent out for transshipping. The consignee can use either the BOL number or the shipment number to track the departure, location, time of arrival, and other vital consignment details. It will also include all the information about the second vessel.
For example, if a consigner is transshipping the goods through Maersk, they can visit the company's official website. Once they enter the shipment number or the BOL number, they can access all details.
What is the Difference between Direct Shipment and Transshipment?
The primary difference between direct shipment and transshipment is the presence of an intermediate port, railway station, or hub.
Direct shipment refers to a process where a container is shipped directly from the port of origin to the destination port. There is no third port/hub involved.
On the other hand, transshipment requires the container to be offloaded at an intermediate port, loaded to a new vessel, and then shipped to the final port.
