Published in Operations and Supply Chain Terms by MBA Skool Team
What is Transhipment?
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.
In those cases where there is no direct link between the source and locations and that is why is transferred into another vessel in an inland waterway where there is a transfer to a higher depth vessel .
As per the regulations a prior 15 days notice has to be sent to the trade ministry , finance ministry and customs to make arrangement for the transshipped vehicle.
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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