By Cadys Wang    Photo：CANVA

Triangular Trade refers to the trade activities among three countries or regions, where each party participates in the exchange of goods, resources, or services. This trading pattern was prevalent in history, especially in the 18th and 19th century Atlantic Triangular Trade. Modern forms of triangular trade are more complex, involving a variety of goods and services from around the world.

Significance of Triangular Trade

1. Resource Optimization: Triangular trade can utilize the resources and advantages of different regions to achieve more efficient resource allocation. For example, one country might have abundant raw materials, another might possess advanced manufacturing technology, and a third might have the consumer market.
2. Cost Saving: Triangular trade can reduce transportation costs in a single trade route, lowering total costs.
3. Market Expansion: Triangular Trade allows traders to enter more markets, expanding the range of product sales and increasing revenue.
4. Risk Diversification: Participating in multilateral trade helps to diversify risks, avoid the risk of dependence on a single market, and enhance the enterprise's risk resistance.

Types of Triangular Trade

1. Historical Type: For example, Atlantic Triangular Trade, which trades goods between Europe, Africa, and America.
2. Modern Type: Modern triangular trade mostly refers to multilateral trade activities under the backdrop of globalization, such as the trade in raw materials and finished products between China, Australia, and Japan.
3. Specific Commodity Type: Some specific commodities such as oil, electronic products, etc., are traded multilaterally among different regions worldwide.

Role of International Logistics Companies in Triangular Trade

International logistics companies play a key role in triangular trade, mainly responsible for the following tasks:

1. Transportation Management: Arrange different modes of transportation, such as sea, air, and land, to ensure that goods can be smoothly and timely transported from one region to another.
2. Warehouse Services: Provide facilities such as transit warehouses, bonded warehouses, etc., for short-term or long-term storage of goods, ensuring the safety and quality of goods.
3. Customs Clearance Services: Assist in handling import and export declaration, customs procedures, etc., to ensure that goods can smoothly pass the customs inspection of various countries, avoiding delays and fines.
4. Freight Forwarding: Serve as a bridge between importers and exporters and transportation companies, assist in coordinating transportation arrangements, freight negotiation, cargo insurance, etc.
5. Information Management: Utilize modern information technology to provide services such as cargo tracking, transportation status updates, etc., allowing customers to understand the transportation status of goods at any time.
6. Supply Chain Management: Integrate various links in the upstream and downstream of the supply chain, provide comprehensive supply chain solutions, and improve trade efficiency and overall benefits.

The above explains the role and relationship of international logistics companies in triangular trade. The next article will explain the detailed operation process and necessary documents in triangular trade using actual examples.

Appreciate if you could share TGL Blog among your friends who are interested in first-hand market information of supply chain and updated economic incidents.