What Is Transshipment? Purpose, Stages, & Differences from Transit

In sea freight, efficiency is a crucial factor, particularly when shipments involve multiple countries and ports. To achieve this efficiency, several strategies can be implemented, one of which is transshipment.

Transshipment is a strategy that helps ensure the optimal flow of goods despite limitations in routes, infrastructure, and even costs. How is this possible? Find out the answer in this article!

What Is Transshipment?

Transshipment is the process of transferring cargo or containers from one vessel to another before the vessel arrives at the destination port. This process involves a mother vessel and a feeder vessel.

A mother vessel is a large ship that serves transoceanic or intercontinental routes. A feeder vessel, on the other hand, is smaller and used to distribute cargo to regional ports.

The transshipment flow can begin with the mother vessel to the feeder vessel, or vice versa. The process takes place at a port that serves as a distribution hub.

Purposes of Transshipment

Generally, transshipment is carried out for the following purposes:

1. Connecting Shipments That Do Not Have Direct Routes

In fact, not all ports are connected by direct shipping routes. In such circumstances, cargo transshipment provides a viable solution. By transferring cargo via a transit port, the shipping process becomes more efficient.

For example, goods need to be shipped from Port A to Port B. However, no vessels are serving that route. Therefore, the goods must first stop at a transit port, Port C, and then be transferred to another vessel bound for Port B.

2. Supporting Cargo Consolidation and Deconsolidation

Consolidation is the process by which several small consignments from various ports are combined into a single larger consignment.

For example, containers from Surabaya, Makassar, and Balikpapan are to be shipped to Europe. All these containers are first gathered in Singapore, then loaded onto a mother vessel alongside other cargo from Asian countries also bound for Europe.

Meanwhile, deconsolidation occurs when a large shipment carried by a large vessel is divided among several smaller vessels.

For instance, a mother vessel carries 3,000 containers to Singapore. Upon arrival, the containers are distributed amongst several feeder vessels for delivery to Surabaya, Makassar, Balikpapan, and other cities.

Deconsolidation is also essential when the destination port has infrastructure limitations that prevent large vessels from berthing there. These limitations may include shallow waters, a short dock, or limited loading and unloading facilities.

3. Reducing Shipping Costs

In many cases, transshipment is carried out to optimize costs. As the mother vessel carries a large volume of cargo at once, the shipping cost per container is reduced. In maritime transport, this is known as the concept of economies of scale.

Conversely, without transshipment, shipping companies would have to operate vessels to every destination port. In addition to making the route longer, this approach risks increasing fuel, crew, and operational costs due to the greater number of stopovers.

4. Supporting Multimodal Transportation

Intermodal transportation is the shipment of goods involving more than one mode of transport, for example, from ship to lorry, ship to train, and so on.

Here, transshipment can support intermodal transport by connecting shipping networks to other modes of transport once the cargo arrives at the destination port.

For example, after a container has undergone transshipment and arrived at the destination port, the cargo is then transferred to a lorry. The shipment then continues to a warehouse or distribution center in the destination city.

Stages of Transshipment

Generally, the transshipment process involves the following stages:

1. Loading of Cargo at the Origin Port

The first stage takes place at the origin port or Port of Loading (POL). Upon arrival at the port, staff check the shipping documents, record the cargo details in the system, and handle the cargo to ensure its safety during the shipping process.

Scheduling for transshipment to the next vessel is carried out next. Once all administrative and security requirements have been met, the cargo is then loaded onto the first vessel and sent to the transit port.

2. Unloading of Cargo at a Transit Port

Upon arrival at the transit port, the cargo is unloaded. To continue the shipment to the final port, the cargo must await the next vessel and its departure schedule. During this waiting period, the cargo is temporarily stored at the terminal.

The storage location depends on the type of cargo. Containers are generally placed in the container yard, where goods are stored on pallets in warehouses, while vehicles are kept in a dedicated holding area.

3. Transferring and Reloading onto the Connecting Vessel

This third stage is the core of transshipment, where the cargo is reloaded onto a second vessel and then shipped to the destination port. Here, proper handling and compliance with Customs regulations are essential.

The cargo is then shipped to the destination port. Throughout the shipping process, the cargo’s status and location are continuously updated in the system, allowing the shipper and recipient to monitor its movements in real time.

4. Arrival and Unloading at the Port of Discharge

The final stage in cargo transshipment is the arrival of the cargo at the port of discharge (POD) and its unloading from the vessel.

Once the cargo has been unloaded, customs officials will inspect the goods from the port and arrange for delivery to a warehouse or the recipient’s address.

The Difference Between Transshipment and Transit

Aside from transshipment, you may have also heard the term 'transit.' Although they sound similar, the two differ in the following ways:

Core process: In transshipment, cargo is transferred from the first vessel to the second. Meanwhile, in transit, goods merely pass through a particular area without being transferred to another vehicle.
Mode of transport: Transshipment is generally carried out in sea freight, whilst transit is more commonly found in land and air freight.
Level of risk: The risk in transshipment is quite high as it involves the physical transfer of cargo. Some of the risks include damage during port loading and unloading and incorrect container placement. On the other hand, the risks associated with transit tend to be lower as goods do not need to be transferred. However, this process is subject to the risk of border queues.

There is also a process similar to transshipment that takes place on the open sea: STS (ship-to-ship) transfer. STS transfers are generally carried out for cargoes such as oil, chemicals, and LNG.

Trusted Port and Chemical Storage Solutions by CDI

One of the keys to optimizing the transshipment process is adequate and secure port infrastructure, ranging from docks and loading/unloading equipment to integrated logistics systems.

PT Chandra Daya Investasi Tbk (CDI), through its subsidiary, PT Redeco Petrolin Utama (RPU), provides reliable and professional port and chemical storage solutions. The following is a summary of the infrastructure owned by RPU:

Over 70 tanks with a total capacity of over 125,000 m³.
Two berths, each with an LOA of 200 meters, suitable for 35,000 DWT vessels with a draft of 10 meters.
A Centralized Fueling Station (CFS) suitable for various types and sizes of road tankers.
A Customer Order Service (COS) system for bespoke product collection plans.
International standards for fire and safety, including oil booms to handle oil spills.

With high-standard infrastructure and a responsive team, CDI and RPU are ready to be your #YourGrowthPartner in optimizing your business’s port operations.