One possible reason is to change the means of transport during the journey (for example from ship transport to road transport), known as transloading. Another reason is to combine small shipments into a large shipment, dividing the large shipment at the other end. Transshipment usually takes place in transportation hubs. Much international transshipment also takes place in designated customs areas, thus avoiding the need for customs checks or duties, otherwise a major hindrance for efficient transport.
Note that transshipment is generally considered as a legal term. An item handled (from the shipper's point of view) as a single movement is not generally considered transshipped, even though it may in reality change from one transport to another at several points. Previously it was often not distinguished from transloading since each leg of such a trip was typically handled by a different shipper.
Transshipment is normally fully legitimate and an everyday part of the world's trade. However, it can also be a method used to disguise intent, as is the case with illegal logging, smuggling or grey market goods.
Optimal and heuristic algorithms for the multi-location dynamic transshipment problem with fixed transshipment costs.
May 01, 2003; 1. Introduction and literature review Centrally controlled multi-location systems are capable of increasing their profitability...