In Transit Inventory: Definition, Significance, and Best Practices

As supply chains become more complicated and global, the concept of in transit inventory has gained significant important in the world of logistics. In this article, we’ll clarify what in transit inventory is, why it’s important, and some best practices for managing it efficiently.

What is In Transit Inventory?

In transit inventory refers to the inventory that is in the process of being transported from one location to another. These could comprise raw materials, work-in-progress commodities, or finished products. In transit inventory can be moving via several modes of transportation, such as sea, air, train, or road. The time it takes for the inventory to reach its destination can vary based on the transit option, distance, and any possible delays. 

The Significance of In transit inventory

In transit inventory plays a critical role in ensuring that the supply chain operates properly. It helps organizations meet customer demand by having the right products in the right place at the right time. In transit inventory also enables for a more efficient supply chain by minimizing the lead time between when the order is placed and when the product is delivered. This can be especially essential for organizations that operate in a just-in-time (JIT) manufacturing or distribution environment.

In transit inventory might also act as a buffer against unanticipated supply chain disruptions. Whenever there are delays or disruptions in the supply chain, having in transit inventory can assist lessen the impact on customer service levels. It can also assist organizations manage their inventory levels by enabling for more accurate planning and forecasting.

Difficulties of Handling In transit inventory

Handling in transit inventory can be a complex operation that comes with various issues. Some of the common issues include:

  • Lack of visibility and real-time monitoring
  • Coordination and communication concerns between multiple stakeholders involved in the transportation and warehousing process
  • Delays and disturbances in the supply chain
  • Transportation and warehousing costs
  • Maintaining inventory accuracy and safety stock levels

Best Methods for Handling In transit inventory

To efficiently manage in transit inventory, organizations need to have a well-planned strategy that takes into account the diverse parts of the supply chain. Following are some best practices for managing in transit inventory:

Accurate Planning and Forecasting

Having precise planning and forecasting systems in place can help organizations better anticipate client demand and guarantee that the appropriate products are in the right location at the right time. This involves having a clear awareness of lead times and transit timetables.

Real-Time Visibility and Monitoring

Having real-time visibility and monitoring tools can help organizations follow their in transit inventory and spot any potential difficulties or delays. This can include the use of tracking technology, such as GPS, RFID, or barcodes.

Cooperation and Communication

Good coordination and communication between multiple stakeholders involved in the transportation and warehousing process can assist guarantee that in transit inventory is maintained properly. This involves clear communication channels, sharing data and information, and proactive problem-solving.

Efficient Transportation and Storage

Effective transportation and warehousing systems are crucial to managing in transit inventory successfully. This includes optimizing transportation routes, using appropriate packing and handling techniques, and ensuring that warehouse facilities are suitably suited to manage the inventory.

Inventory Optimization and Safety Stock

Managing inventory levels and maintaining adequate safety stock levels can help organizations balance the cost of carrying inventory with the need to meet consumer demand. This includes adopting inventory management techniques, such as ABC analysis, and establishing safety stock levels that take into consideration lead times and unpredictability in demand.

For more insights on e-commerce inventory management, check out this article by Launch Fulfillment


In transit inventory is a key part of the supply chain that allows organizations to meet consumer demand, prevent supply chain disruptions, and run a more effective operation. Yet, controlling in transit inventory can be complex and comes with various challenges. By following best practices such as accurate planning and forecasting, real-time visibility and monitoring, collaboration and communication, efficient transportation and warehousing, and inventory optimization and safety stock, companies can effectively manage their in transit inventory and achieve better supply chain performance.



What is the difference between in transit inventory and on-hand inventory?

In transit inventory refers to merchandise that is in the process of being carried from one area to another, while on-hand inventory refers to material that is physically located at a specific site, such as a warehouse or store.

How might real-time visibility and monitoring help with controlling in transit inventory?

Real-time visibility and monitoring can help organizations follow their in transit inventory and spot any possible difficulties or delays, allowing them to take corrective actions in a timely way.

What is safety stock and why is it crucial for in transit inventory?

Safety stock is the supplementary inventory that companies maintain on hand to protect against unexpected variations in demand or supply chain interruptions. It’s vital for in transit inventory since it helps ensure that organizations can still meet customer demand even if there are delays or disruptions in the supply chain.