Final answer:
Transshipping can be used to reduce shipping costs through consolidation or for improper purposes such as evading import quotas or local manufacturing requirements, which can conflict with trade regulations designed to protect domestic interests.
Step-by-step explanation:
Transshipping is a tactic used in international trade and can serve multiple purposes depending on the specific context and objectives of the merchants or shipping agents involved. One common reason for transshipping goods is to reduce shipping costs by consolidating shipments. This can make logistical and economic sense when it involves aggregating smaller shipments into a larger one to save on transportation costs. However, transshipping may also be utilized for less legitimate reasons such as to avoid import administration, evade allocated quotas, or evade local manufacture requirements. These practices can undermine trade policies and regulations designed to protect local industries, manage resources, or enforce safety and quality standards.
The last half-century has seen significant changes in international trade, including the reduction of government-created barriers such as tariffs, import quotas, and other non-tariff barriers, in part facilitated by technological improvements in transportation, communication, and information management. These changes have contributed to the growth of global trade.