GlossaryEN1 min readUpdated: Jun 18, 2026

Transit Risk

From the moment a consignment leaves the shipper's warehouse, it is exposed to transit risk – the range of perils that can affect cargo until the consignee takes delivery.

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Last updated: 18 June 2026Published: 27 January 2026

Source: https://www.investopedia.com/terms/t/transit-risk.asp

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Definition & Explanation

From the moment a consignment leaves the shipper's warehouse, it is exposed to transit risk – the range of perils that can affect cargo until the consignee takes delivery. This includes theft, damage, partial loss, total loss, and delays arising during loading and unloading, intermediate storage, mode changes, and waiting periods at borders or transshipment hubs. Cargo insurance is the primary instrument for managing this exposure, defining the scope of cover and applicable limits. In international trade, Incoterms determine the exact point at which transit risk passes from seller to buyer – a distinction that directly shapes insurance obligations. Transit risk should not be confused with the carrier's statutory liability, which is governed by transport law conventions such as the CMR or the Montreal Convention and is typically subject to strict caps.

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Transit Risk

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Related Terms

Transit state risk

Transit Security Analytics

NCTS message

Freight Risk Assessment for Reefer Cargo Logistics

CPT Transit Risk

Border Transit Risk Mapping

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