Understanding the terms ’transit’, ‘transit cost’, and ‘goods in transit’

Transit/Transit Cost

The words ‘Transit’, and ‘goods in transit’ are commonly used in the transport and logistics sector. We are sure you have come across this term before in your profession, but do you know what exactly they mean? Do not worry, if you don’t. Let us help you out.

Key Pointers:

  • Any cargo or goods that are being shipped by the seller to reach the buyer can be termed as goods in transit.

  • Transit refers to the status of the goods right from the time they are dispatched by the seller till the time they are received by the buyer. 

  • Goods transit is neither with the seller nor with the buyer. They are in between both parties involved. 

  • Transit goods are being shipped, so they are undertaking a journey toward their destination. 

An example can help you understand better. Suppose, Mr. Gupta (A) has cargo to be shipped from New Delhi to Raipur to Mr. Shah’s (C) factory. So, he hires Mr. Singh (B) who runs a transport and logistics company to help him with the shipping. 

In this case, the goods in transit would be the entire time when the goods are with B (Mr. Singh), and that is when it is being transported from New Delhi to Raipur. The transit will include the time from when the goods leave point A (Mr. Gupta’s warehouse), reaches point B (Mr. Singh’s company and travel in his fleet of trucks) until they reach their destination point C (Mr. Shah’s factory). 

What is Goods Transit Insurance?

From the time goods leave the seller till they reach the buyer, they can be exposed to a number of risks. Since goods transit is a period of travel, it can even lead to damage/ loss of goods. Some of the factors affecting goods transit can be noted as–theft, misplacement, loss, damage, accidents, collisions, and the like. 

To ensure the financial safety of all the parties involved (Mr Gupta, Singh, and Shah) any one of them can opt for goods transit insurance. This insurance can help them with financial aid in case of any accidental damage/loss of goods. The goods in transit insurance cost will depend on the policy you choose as well as the value of the goods in transit. 

Usually, the goods in transit insurance rates are .15% of the declared value of the goods. Hence, if Mr Gupta’s cargo was worth Rs 2,50,000, the goods transit insurance cost will be Rs 375. 

Why Does Goods Transit Need Insurance? 

Goods transit run the risk of being damaged while they are in transit. Loading, ferrying, unloading–any stage of transit can lead to a loss of goods. To avoid this affecting the funds of the involved parties, an insurance policy is required. 

When Mr. Gupta’s cargo was in transit, one of the trucks met with an accident wherein part of the cargo was lost. Out of Rs 2,50,000 worth of cargo, Rs 1,00,000 was lost due to the accident. Thankfully, Mr. Singh had the cargo insured which offered them a good amount in return as their claim. 

The Bottomline

This sums up all about goods transit. We hope the term is clear to you now. In case of any other query, you can contact our team at Vahak and get expert-backed insights to help you better. 


Ans. Goods transit insurance is easily available online. You can even get in touch with us at Vahak to contact our agents.

Ans. The cost of goods transit insurance depends on the value of your goods and the policy you choose.

Ans. Anyone whose business involves ferrying goods should buy goods transit insurance. 

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