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The pier must be built within the influence of a harbor warehouse or Harbour master's office. It provides mooring for ships to exchange goods. This means ships en route to the island can dock and unload/load goods at the Pier instead of going to the Warehouse proper.

Having multiple piers at your busiest islands is essential. It's not uncommon to have 6 piers at your main warehouse harbor in the mid to late game.

Tip: Every so often check to see if you trade route ships are bottle-necked at any islands. If you see your ships sitting with an hourglass icon above them, this means they are waiting until a free space is available to unload/load goods. Build more piers to eliminate this problem.