It is a combination transportation and deconsolidation.
Transportation is done during all the stages ie from the source to an intermediate storage location through to a final destination. Either the same vessel is used to carry it to its destined locations.
Unbundling of shipment is done from the warehouse to its final destination. It became necessary to classify the movement as Transshipment as the goods went through a number of hands and in case of an illegal activity like smuggling.
The transshipped goods however do not undergo a customs check as it will deter it from being an efficient means of transportation . This makes it more susceptible to illegal activities.
The transshipment strategy is recommended for companies like IKEA where the goods are easy to assemble or disassemble by the customers themselves. It requires an export license to carry transshipped goods unless it comes under certain exemptions. It usually takes place between two different countries.
Hence, this concludes the definition of Transhipment along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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