How can transshipment trade be illustrated with examples?

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I've been studying transshipment trade recently. Although I've read some concepts, it still feels a bit abstract and I don't quite understand it. Can anyone give a simple and easy-to-understand example to help me better grasp how transshipment trade actually operates? It would be best to use actual goods so I can experience it more intuitively.
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Sophia Wang
Sophia WangYears of service：6Customer Rating：5.0

International Logistics CoordinatorStart a Chat

Let's take clothing trade as an example. Suppose there is a clothing manufacturing enterprise A in China, and a clothing sales enterprise C in France. Due to high tariffs on Chinese clothing in France. At this point, Zhongmaoda establishes a trading company B in Singapore.

Enterprise A first exports clothing to company B, and the goods are not actually shipped to Singapore but are directly transported to France. However, on paper, it is shown as sold to company B. Company B then resells these clothes to company C.

Through this method, by utilizing Singapore's lower tariff policies and superior geographical location, the overall trade costs are reduced. At the same time, Chinese enterprise A expands into the French market, French enterprise C obtains goods at a lower price, and Zhongmaoda's company B earns the price difference from the transshipment trade, achieving a win-win situation for all parties.

References: The Covert War of Transshipment Trade: Who Controls the Global Flow of Goods?
Emma Zhao
Emma ZhaoYears of service：3Customer Rating：5.0

Export Documentation SpecialistStart a Chat

For instance, Brazil is rich in coffee beans, and Japan has a large demand for coffee beans, but there are some trade barriers between Brazil and Japan. At this time, Zhongmaoda establishes a trading post in Malaysia. Brazil first sells coffee beans to Zhongmaoda's trading post in Malaysia, and then this trading post sells the coffee beans to Japan. The goods can be shipped directly from Brazil to Japan. This is transshipment trade.

Richard Wu
Richard WuYears of service：8Customer Rating：5.0

Global Trade Operations ExpertStart a Chat

An American company wants a large quantity of toys, and Chinese toy factories produce toys at a low cost. However, there are trade frictions and high tariffs between China and the United States. Zhongmaoda establishes a company in Hong Kong. The Chinese toy factory first sells the toys to Zhongmaoda's Hong Kong company, and the Hong Kong company then sells them to the American company. The toys can be shipped directly from China to the United States. This is an application of transshipment trade.

Daniel Kim
Daniel KimYears of service：4Customer Rating：5.0

Commodity Inspection and Quarantine ConsultantStart a Chat

India has a lot of high-quality cotton, and Italian textile enterprises need cotton. However, trade policies between India and Italy are complex. Zhongmaoda establishes a trading company in the UAE. India first sells cotton to Zhongmaoda's UAE company, which then resells it to Italian textile enterprises. The cotton is shipped directly from India to Italy, completing the transshipment trade.

David Chen
David ChenYears of service：10Customer Rating：5.0

Trade Compliance AdvisorStart a Chat

Thailand has abundant fruits, and Russia has a large demand for Thai fruits. However, there are some inconveniences in trade between the two countries. Zhongmaoda establishes a trading agency in Vietnam. Thailand first sells fruits to Zhongmaoda's Vietnam trading agency, which then sells them to Russia. The fruits are shipped directly from Thailand to Russia. This is an example of transshipment trade.

Michael Zhang
Michael ZhangYears of service：10Customer Rating：5.0

Customs Clearance SpecialistStart a Chat

China has a large quantity of electronic products, and Germany has a high demand for electronic products. However, there are tariff differences in Sino-European trade. Zhongmaoda establishes a trading company in the Netherlands. Chinese enterprises first sell electronic products to Zhongmaoda's Dutch company, which then resells them to German enterprises. The goods are shipped directly from China to Germany, completing the transshipment trade process.

Anthony Luo
Anthony LuoYears of service：10Customer Rating：5.0

Trade Compliance ExpertStart a Chat

Australia has high-quality wool, and Korean clothing enterprises require a large amount of wool. However, there are some regulatory restrictions in Australia-Korea trade. Zhongmaoda establishes a trading company in New Zealand. Australia first sells wool to Zhongmaoda's New Zealand company, which then sells it to Korean enterprises. The wool is shipped directly from Australia to South Korea. This is a transshipment trade operation.

Kevin Huang
Kevin HuangYears of service：3Customer Rating：5.0

E-Commerce Export AdvisorStart a Chat

South Africa is rich in mineral resources, and Japan has a large demand for minerals. However, there are difficulties in trade between South Africa and Japan. Zhongmaoda establishes a company in Singapore. South Africa first sells minerals to Zhongmaoda's Singapore company, which then sells them to Japan. The minerals are shipped directly from South Africa to Japan, completing the transshipment trade.

Olivia Liu
Olivia LiuYears of service：6Customer Rating：5.0

Foreign Exchange Risk ManagerStart a Chat

Canada has abundant timber resources, and the United Kingdom needs a large amount of timber. However, trade policies between Canada and the UK differ. Zhongmaoda establishes a trading company in Ireland. Canada first sells timber to Zhongmaoda's Irish company, which then sells it to the UK. The timber is shipped directly from Canada to the UK, achieving transshipment trade.

Linda Guo
Linda GuoYears of service：3Customer Rating：5.0

Trade Dispute MediatorStart a Chat

Saudi Arabia is rich in oil resources, and China has a large demand for oil. However, there are some issues in trade and transportation. Zhongmaoda establishes a trading company in Oman. Saudi Arabia first sells oil to Zhongmaoda's Omani company, which then sells it to China. The oil is shipped directly from Saudi Arabia to China. This is an example of transshipment trade.

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