The Advantages of Triangle Shipments

Posted on Thursday, November 5th by

Also known as foreign-to-foreign shipments or triangular trades, triangle shipments refer to shipping operations that involve the participation of three different parties from three different countries. Let us assume a trade between three parties based in the US, China and Colombia, respectively. In this case, an example of a foreign-to-foreign shipment would involve the cargo being transported between China and Colombia without it passing through the US.

Triangle shipments are highly advantageous on a number of levels, allowing for lower supply chain costs, shorter transit times, supply chain optimisation and maximised efficiency as all operations are handled exclusively by the companies providing such services and their freight forwarders or logistics providers. This leads us to another advantage of this kind of shipments, namely the fact that the parties involved in the trade can keep their anonymity all throughout if desired. However, the protection of the suppliers is conditioned by the hire of an experienced and well-connected freight forwarder or logistics provider, one who is familiar with document switching, among others.

Document switching ensures the protection of suppliers by not revealing their information. Thus, for instance, in ocean freight transportation, the forwarder issues a so-called switch or blind bill of lading to serve the export customs purposes of the supplier upon exporting their cargo which does not contain any details regarding the supplier. In air freight transportation, the switch bill of lading is replaced by the switch or blind air waybill. In the context of this first set of documents, the buyer does not receive any commercial invoice, certificate of origin, packing list, health certificate or similar documents that contain information about the supplier.

A second set of documents contains information about the seller and the buyer and serves to allow the latter to obtain customs clearance and carry out the delivery. At this point, the seller must provide the aforementioned additional documentation. However, the supplier is protected once again regardless of the type of services provided by the seller.

In the end, protecting the supplier, shipper or exporter is the key to successful foreign-to-foreign shipping. Therefore, it is important to take the necessary precautions with regard to the freight forwarder or logistics provider to handle this kind of shipping activity. Setting up an interview with them before initiating any type of partnership is a good place to start.

Finally, it should be noted that switch bills of landing and air waybills are only valid in the case of particular types of shipments. Therefore, it is essential that their validity within the terms of the cargo insurance be verified by the freight forwarder in advance. In addition to this, it is essential that the information contained in the two sets of documentation match. However, the issuance of the second set of documentation described above is conditioned by the collection of the first one by the seller from the supplier with the mention that the seller can choose to collect the documentation themselves or have the freight forwarder collect it on their behalf.