Transshipment or Transshipment is the shipment of goods or container to an intermediate destination, and then from there to yet another destination. The possible reasons for transshipment is to change the means of transport during the journey (for e.g. from ship transport to road transport), which is known as Trans loading. Another reason could be to combine small shipments into a large shipment, dividing the large shipment at the other end. Transshipment usually takes place in transportation hubs. Most 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 of:
- Goods are moved from country to country without being imported into the country.
- Goods that are transshipped through Singapore are not subject to the duties and taxes that would normally be imposed on imports.
What are the Goods that can be Trans shipped
- Non Controlled goods, can be transshipped through Singapore without the need for Licenses.
- The transshipment of certain goods is subject to control by the relevant Competent Authorities ("controlled goods").
- Traders of controlled goods must have the necessary licenses and permits before they can transship the goods.
- Special permits are required for exporting, re-exporting, transshipping and transporting of strategic goods like munitions or bio-chemicals.
Strategic goods are regulated by the Strategic Goods (Control) Act. It covers all goods and technology that are intended or likely to be used for weapons of mass destruction.
What Permits are Needed
- One can apply for a Transshipment Permit either through Trade Net, freight forwarder or cargo agent when:
- Transshipping goods from one Free Trade Zone (FTZ) to another FTZ.
- Transshipping controlled goods within a FTZ. For e.g. when goods are moved from the ship in the FTZ to a storage facility within the FTZ.
- Transshipping strategic goods.
- If one is transshipping controlled goods within a FTZ, the Transshipment Permit must also be approved by the Competent Authorities (CAs).CAs are Government agencies that regulate controlled goods.
- If one is transshipping Strategic Goods, then one must obtain a Strategic Goods Control (SGC) Trade Net Permit before the goods leave Singapore.
- If they are also controlled goods, the application would be routed to the CAs for approval before going to Singapore Customs for final approval.
What Happens When the Goods Arrive
- For transshipment goods arrive by sea or air. They are stored at the FTZ before they are loaded onto another vessel or aircraft.
- FTZ are designated areas in air and seaports where duties and Goods and Services Tax (GST) are temporarily suspended.
- All dutiable goods can be stored in the FTZs except for liquors and cigarettes.
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Free Trade Zones (FTZs)
Free Trade Zones (FTZs)
Free Trade Zones are essentially designated areas where in normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. No duty or taxes are payable on goods that are stored in FTZs. You only need to pay duty and taxes when the goods leave the FTZ and enter into customs territory for local consumption.
Who Can Transship Goods Through Singapore
- Both foreign and local traders. For e.g.: (a) A local Singapore trader wanting to export toys from Vietnam to Europe might use Singapore as a transshipment hub through which to transport the goods, (b) A foreign trader in Europe wanting to import toys from Vietnam can also use Singapore as the transshipment hub.
- Foreign traders would find it useful to engage a local freight forwarder or cargo agents to help apply for permits through Trade Net.
Why to Use Singapore for Transshipping
Singapore is the largest transshipment hub in the world. This enables transshipments to be processed in a fast, cost-effective and efficient manner.
- PSA Singapore Terminal provides shippers a choice of 200 shipping lines with connections to 600 ports in over 120 countries. Ships sail daily to every major port in the world.
- There are five container terminals in Singapore operated by PSA: Tanjong Pagar, Keppel, Brani, Pasir Panjang and COSCO-PSA.
- Jurong Port is the key bulk and conventional cargo gateway in Singapore, with 23 berths serving over 7000 vessels every year.
- It is Singapore's only dry bulk cargo-handling port.
- It has the world's largest common-user cement terminal, with a capacity in excess of 4 million tons a year.
- It also has a multi-storey, drive-up warehouse known as the Jurong Logistics Hub.
- The Changi Airfreight Centre (CAC) operates a 24 hour one stop service centre for airlines, shippers, cargo agents and consignees.
- The cargo terminal being a FTZ makes it easier to transship goods. Cargo from one airline to another need not leave the terminal, thus either removing or reducing the necessity for customs.
- State of the art infrastructure like automated stacker systems and container and pallet elevating transfer vehicles, have replaced manual labor, making cargo handling more efficient and quick.