Transshipping is the practice of transferring imported goods from one form of transportation to another during their journey from their country of origin to their final destination.
Transshipping can be perfectly legal – and efficient. It can be more economical to consolidate small shipments into larger ones, and it might be necessary when a route isn’t accessible through a single mode of transportation. Some goods, for example, might have to make part of their journey by boat, then train, then truck to get where they are going.
Transhipping can also be used to take advantage of trade agreements, regulatory differences between countries and tax benefits – legally. However, transhipping can also be done illegally to bypass trade restrictions, traffis and quotas when bringing goods into a country. It’s also a common diversionary method employed when someone is smuggling goods around international restrictions or in and out of countries under sanction.
How do you spot illegal transhipping? Here are some signs:
Documentation and paperwork discrepancies
If you spot differences between bills of lading, invoices and customs declarations, or the goods don’t seem to be coming from the expected countries of origin, that’s a major red flag. Missing or incomplete documentation, such as the appropriate certificates of origin should never be overlooked.
Unusual shipping routes or patterns
Be wary if one of your suppliers seems to send their goods by circuitous routes that seem unnecessarily convoluted or indirect, especially if they’re passing through countries with lax customs procedures. If there’s no clear logistical or economic reason for good to take a winding route, you need to be concerned.
Questionable companies and vague answers
If the company has little track record or seems to be a shell operation registered in China, you may find that you have difficulty getting straight answers to your questions. Companies that frequently change ownership or management are also problematic, since that may indicate an attempt to obscure responsibility for whatever the company is doing.
As an importer, you need to be on the alert for items that are commonly subject to trade restrictions, undeclared goods (and flat-out illegal ones) coming through with ties to your name. If you have concerns about being involved in illegal importing activities, seeking tailored guidance is wise.