Nautical Term: Transhipment
Definition of Transhipment
Transhipment is a distribution method where cargo or containers are transferred from one vessel to another during the voyage. This method is used when the final destination is not directly reachable from the port of origin. By consolidating cargo onto larger vessels while transiting in the direction of main trade routes, transhipment enables better vessel utilization and economies of scale.
For example, ABC Shipping Company moves containers of perishable goods from South America to Europe. However, the direct shipping route from the port of origin in South America to the port of destination in Europe is not economically viable due to long transit times and high fuel costs. Instead, ABC Shipping Company utilizes the transhipment method. Containers are shipped from the port of origin in South America to a transhipment hub in the Mediterranean Sea. From the hub, the containers are loaded onto larger vessels bound for the port of destination in Europe. This transhipment method enables better vessel utilization and economies of scale for ABC Shipping Company.
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