When traveling, many would find that opting for a connecting flight — where passengers make a stop en route to their final destination — often comes with a lower price tag, compared to a non-stop flight.
The same goes for goods.
This practice, known as transshipment, refers to the process where containers are transferred from one vessel to another at one location, before being shipped off to their intended destination.
Fueled by the growth in global trade through the years, transshipment plays a vital role in the global supply chain today, allowing cargo to reach different parts of the world.
It offers logistics players a high level of flexibility that can bring about significant cost benefits. A supply chain manager, for instance, can look at consolidating several small shipments to fill a large container or breaking up a large shipment into smaller ones to be shipped off to various locations. He can also choose to change the mode of transport or route for the shipment, depending on his needs.
Shipping cargo via a vessel making a single direct voyage, on the other hand, can often be costlier as the ships may not be fully utilized. Large ships that tend to ply these direct routes may not be able to call at smaller, less-traveled ports as well.
Transshipment activities usually take place in specialized hubs, such as the Port of Singapore — the world’s busiest transshipment hub, accounting for almost one-seventh of the world’s total container transshipment volumes. Other major transshipment ports include Shanghai, Shenzhen, Busan and Hong Kong.