New to transshipment trade and unclear about common trade terms, asking if FOB, CIF are applicable in transshipment trade and if there are other special terms. The best answer points out that commonly used trade terms in transshipment trade are similar to general trade, such as FOB, CIF, CFR, FCA, etc., and should be chosen reasonably based on actual situations like transportation methods and division of responsibilities. It also explains the characteristics of each term.
Is transshipment trade really useful? Share your insights!
Resolved
I am recently considering developing a transshipment trade business, but I have always had a question in my mind: Is transshipment trade really useful? Some friends around me say that transshipment trade can bring many benefits, such as circumventing trade barriers and obtaining more profits. But others say that the process is very complicated and the risks are not small, and it might even be a loss-making deal if not handled well. Are there any friends who have done transshipment trade, can you share your actual experience and views? Is transshipment trade actually useful?
Trade Expert Insights Answers
Transshipment trade is useful. Firstly, it can effectively circumvent trade barriers. For example, when country A imposes high tariffs on products from country B, by transshipping through country C, processing or simply packaging the products from country B in country C and then exporting them to country A, it may comply with A's import policies, thus reducing tariff costs.
Secondly, transshipment trade can increase trade opportunities. Some countries, due to their own production capacity limitations, rely on imports for certain goods. Through transshipment trade, goods from different origins can be consolidated to meet the diversified needs of those countries and expand the market scope.
Furthermore, from a profit perspective, if the price differences of goods in various regions can be well managed, buying low and selling high can generate considerable profits. However, transshipment trade also has risks, such as changes in the policies of the transshipment country, transportation risks of goods, etc., and risk assessment and response measures need to be in place.
Transshipment trade is quite useful, and it can be used to profit from exchange rate fluctuations in different regions. For example, if the domestic currency depreciates, purchasing goods in a region where the currency is appreciating and transshipping them to other countries can allow for profits from exchange rate differences upon settlement.
It is useful. Transshipment trade can optimize the supply chain. For example, some goods can be purchased in bulk at a low cost at the place of production. Through transshipment trade, these goods can be distributed to different demand locations, improving logistics efficiency.
I think transshipment trade is useful and can help companies expand into international markets. Markets that were originally inaccessible due to trade restrictions may find new breakthroughs through transshipment trade.
Transshipment trade can help enhance a company's international influence. Frequent participation in transshipment trade and cooperation with traders from multiple countries can increase a company's international visibility.
In some cases, transshipment trade can regulate the storage time of goods. When market prices are not ideal, goods can be stored in the transshipment location first, and then sold when the price is favorable.
Transshipment trade can integrate resources. By consolidating advantageous products from different countries, it can meet the one-stop procurement needs of specific customers for multiple products.
It is useful and can alleviate trade imbalances. For example, if a country has strong exports and weak imports, it can import some goods through transshipment trade to balance its trade structure.
Transshipment trade can promote regional economic development. The transshipment location, due to increased trade activities, drives the development of industries such as warehousing and logistics.