In the context of modern international trade, the legal framework governing Shipping and Aviation has progressed rapidly in line with the increasing complexity of global supply chains and the growing need for cross-border logistical efficiency. Transshipment—the transfer of cargo through a third country—has now become a common practice among exporters and importers, particularly to reduce costs and accelerate delivery. However, this practice brings significant legal implications concerning the direct transport principle as stipulated in various international trade agreements, including the General Agreement on Tariffs and Trade (GATT) 1994, the ASEAN Trade in Goods Agreement (ATIGA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The direct transport principle requires that goods shipped from the country of origin must arrive in the destination country without undergoing further production processes in a third country and must remain under customs control at all times. In practice, indirect routes are still considered legally valid so long as businesses can demonstrate that the transshipment process was conducted transparently, monitored properly, and supported by official documentation such as the vessel manifest, Certificate of Origin, and customs documentation issued by the transit country.
These developments reaffirm that Shipping and Aviation Law is not only concerned with transportation and logistics but is also closely linked to legal certainty, compliance with rules of origin, and safeguarding the integrity of the global trading system. In Indonesia, the Directorate General of Customs and Excise has implemented the Customs Transit System, ensuring that transit cargo remains under official supervision. This underscores the government’s commitment to validating indirect routes while promoting efficiency in international shipping and aviation.
Nonetheless, challenges persist due to the inconsistent application of the direct transport principle across various free trade agreements and the limited enforcement capacity in certain transit countries. As a result, exporters and logistics operators must ensure that all shipping documents are complete, accurate, and fully compliant with regulations to avoid losing preferential tariff entitlements or facing potential customs sanctions.
Our lawyers possess deep expertise and extensive experience in handling legal matters in the Shipping and Aviation sector, including transshipment disputes, customs issues, and international sea and air carriage agreements. With a strong understanding of WTO provisions, FTAs, and national regulations—such as the Shipping Law, Aviation Law, and implementing regulations issued by the Directorate General of Customs and Excise—we are well-positioned to provide strategic legal support. Whether ensuring compliance with the direct transport principle, drafting transportation contracts, or resolving cross-border trade disputes, we are committed to delivering comprehensive, internationally aligned legal solutions in the field of Shipping and Aviation Law.