There are two location types that are inventory type locations that carry inventory stock, COURIER and LABOR, they are both created in the Locations application. The difference between a Labor Location and a Transit Location is that a Labor Location has a Labor record, and it creates a location of type LABOR, a Transit Location of type LABOR created directly in the Locations application does not have a Labor record. Therefore, you may wish to emphasise this difference by only having Transit Locations referenced by a location of type COURIER.

The other difference between Transit Locations and Labor Locations is that with a Transit Location the stock is only temporarily held as it is being transferred from one storeroom to another. An Inventory Usage record of type Transfer is used to transfer items to a Transit Location, and an Inventory Usage record of type Transfer is used to transfer the items from the Transit Location to the destination storeroom. After completion of the delivery there should be no stock in the Transit Location. The Transit Location is not used for issues and returns.

While locations of type COURIER and LABOR are referenced as inventory type locations in IBM documentation, they will not be found in the Storerooms application. These are standalone locations which cannot be a part of a location hierarchy. 

Transit Locations are used when you want to track the movement of stock between storerooms, probably because there are a few days or weeks between the stock leaving one storeroom and arriving at the next. This occurs when items are shipped offshore. Item Availability shows the items in LABOR and COURIER type locations and these items can be found in the Inventory application. The Storeroom is the name that you provided in the Locations application. As stock is only temporarily held while in-transit, there is no control or shrinkage account that need to be set up.

Transit Locations can be used to support some logistic scenarios.

Transit Locations exist at the SITE level.