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Regarding the prohibition of transshipment
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We have received aThe document clearly stipulates that "transshipment is not allowed", but there are no direct shipping routes from our port of departure to the destination port, so we have to transship. What should we do now? What consequences will we face if we violate the regulations?
Eric ZhouYears of service：6Customer Rating：5.0
Senior Manager of Foreign Exchange & Tax RebatesStart a Chat
The "no transshipment allowed" clause you encountered is very common in letters of credit，but it carries extremely high risks. According to Article 20(c) of UCP600，if a letter of credit prohibits transshipment，banks will not accept bills of lading that indicate the goods will be transshipped. The key here is the word "indicate" — even if transshipment actually occurs，as long as the bill of lading does not show traces of transshipment，banks may still make payments under the principle of documentary compliance. However，please note that this is a gray area operation. From a compliance perspective，I recommend the following: First，never display transshipment information on any official documents (bills of lading，packing lists，invoices)，Second，check whether your goods' HS codes involve special regulatory conditions. Transshipping certain commodities may trigger additional commodity inspections，Third，if transshipment is necessary，choose a through-transport service from the same carrier and ensure the shipping company issues a through bill of lading without reflecting transshipment loading/unloading records on the documents. The greatest risk of violating this clause is not customs inspections (customs usually do not intervene in letter of credit terms)，but bank refusal to pay and buyer claims. If transshipment cannot be avoided，the safest approach is to request the applicant to amend the letter of credit terms.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
From a logistics operational perspective, "no transshipment allowed" does indeed limit your transportation options, but there are usually workarounds. First, immediately check all shipping routes from the port of departure to the port of destination. Many routes appear to involve transshipment, but in reality, they are "route connections" rather than "transshipment" — for example, if the ship stops at Busan port but does not change vessels, the shipping company can issue a direct bill of lading, which does not violate the terms. If a change of vessel is necessary, choose major carriers with "combined transport services" (such as Maersk and Mediterranean Shipping Company), which can issue through bills of lading that do not reflect transshipment information. In terms of cost, direct ships are typically 15-25% more expensive than transshipment, but they save on transit time and risks. In terms of timeliness, direct ships are usually 5-10 days faster. We recommend that you: 1) specify "need direct or combined transport bills of lading" when requesting quotes from multiple freight forwarders; 2) consider whether you can ship from nearby ports to obtain direct services; 3) choose Incoterms that give you control over transportation rights, such as CIF or CFR, which offer greater operational flexibility. Remember, the key is to obtain a "Port to Port" or "Combined Transport" bill of lading, not a "Through B/L".
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
When faced with the "no transshipment allowed" clause, there's actually more room for business communication than you might think. First, determine the client's true intentions: Are they concerned about cargo safety, delivery timeliness, or simply following the issuing bank's template? If the former, you can directly provide a solution: "We understand your concerns about cargo safety, so we will choose Maersk's end-to-end intermodal service. Although the shipping schedule shows a transit via Busan, the entire journey will be handled by the same carrier and a direct bill of lading will be issued. The cargo will not be unloaded or container-changed along the way, ensuring full risk control." Such a statement is both professional and reassuring. If the client insists on a literal interpretation, you could tentatively suggest: "To ensure full compliance with the L/C requirements and avoid any document discrepancy risks, we recommend amending the clause to 'allow transshipment by the same carrier'. This will both protect your interests and ensure smooth document submission." Typically, clients care more about timely receipt of goods than transshipment itself. If the order is profitable, you could even offer to cover the bank fees for amending the L/C. The core strategy is to transform "no transshipment allowed" from a technical issue into a collaborative discussion about how to jointly reduce risks, avoiding confrontation.