Bear in mind that transshipment is a physical condition, whereas the credit is a documentary process. Accordingly what a transshipment ‘is' depends upon whether you mean in the contract of the physical world at large or only in the narrow context of the credit;
When cargo moves from point A to point B, it may involve a single device (vehicle, aircraft, vessel etc) or several devices. Sometimes the use of more than one device may be intentional, such as in the case of multimodal transport; sometimes it can be necessary due to unforeseen events - such as rail cargo transferring to road due to a problem with the rail track or bad weather. Equally, transit may involve a single type of transport (such as seafreight), but may be accomplished using more than one device (i.e. two vessels.) Depending on your point of view, each example in this paragraph could be classed as transshipment or none of them could be.
Lots of parties involved in trade have opinions on what the word transshipment means but the only parties to have a uniformly clear and documented opinion on the subject are the banks. The banks have an interest in transshipment as it creates risks that need to be considered and managed, in that a broken journey could involve cargo leaving country ‘A' but being diverted in transit away from country ‘B', subsequent to payment having been made. It may also involve the presentation of documents (under a documentary credit for example) that govern only a portion of the journey.
Banks are able to offer a clear definition of transshipment through the work of the International Chamber of Commerce banking committee and their publication in respect of the Uniform Customs and Practices for Documentary Credits (UCP.)
Prior to the 1993 publication (UCP 500), earlier versions of the UCP defined transshipment very narrowly. The exact definition was;
‘...the transfer and reloading during the course of carriage...from one conveyance or vessel to another conveyance or vessel, within the same mode of transport or from one mode of transport to another mode of transport...'
This effectively meant that every multimodal event involved transshipment as did every hub and spoke movement in airfreight or any seafreight event that involved a feeder service.
The main problem with this view arose in instances of containerised cargo, where multimodal movement is the central intention and is virtually unavoidable. Under this pre-1993 UCP definition, multimodal cargo was always ‘transshipped' and if a documentary credit was drawn up with the common clause ‘transshipment not allowed', there was an automatic discrepancy which lead to problems. The likely reason that the applicant prohibited transshipment in the first place was because their own ‘physical' understanding of what transshipment means was at odds with the banks documentary concept.
With the revision of the UCP in 1993, the definition of (seafreight) transshipment was changed. In that publication it reads;
‘...unloading and reloading from one vessel to another vessel during...carriage from the port of loading to the port of discharge.'
The airfreight equivalent clause substitutes ‘aircraft' for ‘vessel', whereas the road and rail definitions describe transshipment as the movement from one of these modes (road or rail) to the other (road or rail). Thus, containerised cargo moving from road to rail before shipment or subsequent to shipment is no longer seen as transshipment in terms of the documentary credit.
But as the name emphasizes, a documentary credit is a ‘documentary' event and is distinctly detached from the physical event of the sale and movement of cargo. The definitions of transshipment, however, rely heavily on an understanding of the physical underlying event of movement. So, the UCP went further and allowed the banks to accept any (conforming) document which indicates that transshipment will or may take place, provided the entire journey is covered by one transport document.
With this codicil, the bank's concept of transshipment remains documentary as cargo loaded on a vessel in port ‘A', removed in port ‘B' and placed onto a second vessel for carriage to port ‘C' does not involve transshipment in the bank's view. Provided one transport document is issued for the entire journey.
With the UCP 600 2007 revision, the text used to define documentary transshipment has been revised and reads
Seafreight - "reloading to another means of conveyance (whether or not in different modes of transport) during the carriage from the place of dispatch, taking in charge or shipment to the place of final destination stated in the credit. (However, a) transport document may indicate that the goods will or may be transshipped provided that the entire carriage is covered by one and the same transport document. (Further a) transport document indicating that transshipment will or may take place is acceptable, even if the credit prohibits transshipment. If the goods have been shipped in a container, trailer or LASH barge as evidenced by (the seafreight transport document)
Airfreight - "transshipment means unloading from one aircraft and reloading to another aircraft during the carriage from the airport of departure to the airport of destination stated in the credit. (However an) air transport document may indicate that the goods will or may be transshipped, provided that the entire carriage is covered by one and the same air transport document. (Further, an) air transport document indicating that transshipment will or may take place is acceptable, even if the credit prohibits transshipment.
Road and Rail - "transshipment means unloading from one means of conveyance and reloading to another means of conveyance, within the same mode of transport, during the carriage from the place of shipment, dispatch or carriage to the place of destination stated in the credit. (However a) road, rail or inland waterway transport document may indicate that the goods will or may be transshipped provided that the entire carriage is covered by one and the same transport document. (Further) a road, rail or inland waterway transport document indicating that transshipment will or may take place is acceptable, even if the credit prohibits transshipment.
As stated, this concept of transshipment represents the bank's point of view. There are other views flowing from the physical condition of transshipment, but as none of these are uniformly applied (unlike the banks), they are therefore difficult to comment on.
one hill at a time, please
I would like to highlight below:
If an L/C calls for partial shipments to be "allowed", this means that the supplier may ship the order in as many shipments as he likes until the lastest shipment date on the L/C. If you have ordered say a total 100units of a commodity and the latest date of shipemnt on the L/C is the 30/04/09, then your supplier may ship for example 10units on the 02/04/09 then another 50units on 15/04/09 and then the remaining 40units on 24/04/09. If partial shipments are "not allowed", then the supplier must ship the total 100unit (give or take tolerance amount) in one single lot on any given day before the 30/04/09.
A transshipment is when a cargo switches vessels at some point of it's journey. For example, take a cargo that is to be shipped from a port in China to a port in the UK. The shipping line may use a vessel for one part of the journey and then another for the remaining part. So they will load the goods on a ship in the port in China, the vessel will go a port in Egypt, off load the cargo and then reload it onto another ship for the jouney Egypt-UK. Like the partial shipments they can be allowed or not. If they are not you need to specify if to the shipping line when they book the vessel as they won't necessarily tell you is goods will be transhipped. However, if the B/Ls don't show that goods have been transhipped it is hard to tell without tracking the cargo online.
Hope this helps