TRANSPORT

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Transport and distribution are key considerations when planning for international trade. Choosing the right mode of transport is essential to ensure your import or export operation is efficient and cost-effective.

There are four ways of importing and exporting – road, rail, air and sea – although you may need to use more than one type of transport. When making your choices, it is why we are here to help you…

Covers how to deal with customs, identifies which regulations must be complied with and explains how to manage a freight forwarder.

Assessing your transport needs for international trade

Your choices for international transport and distribution include road, rail, air and sea.

Various factors will influence your decision on which type of transport to use – including your business’ requirements, the destination country, and the type of goods you are importing or exporting.

Ask yourself the following questions:

  • What do you want to distribute? Size and weight will affect the cost.
  • How quickly does the product need to reach its destination? This will affect which type of delivery service you use and the cost – sending goods by air is quicker but significantly more expensive than by sea.
  • How would transport costs impact on your overheads?
  • Where do the goods need to go? For example, Europe has a large rail and inland waterway network, but you may encounter problems if the destination is especially remote.
  • How valuable are the goods? Get quotes from insurance brokers before deciding on the appropriate insurance level.
  • Do your customers have any special requirements?

Consider all the methods of transport available. You should aim to balance service quality, cost, organisation and time. You will often use more than one mode of transport.

How your type of goods may influence your decision

Match the transport mode with the goods you’re moving. For example, if you import fresh fruit or other perishable items, speed is important. Transport by ship or road may not be quick enough.

Using road transport for international trade

Road transport can be the most flexible option for your international business, especially within the EU. The motorway network is good and crossing national borders is usually quick and efficient.

Other advantages:

  • relatively low cost
  • extensive road networks – scheduled delivery days and next day delivery services are a viable option
  • you can schedule transport to suit you and you can track the location of goods
  • consignments can be secure and private

The following classes of goods are defined as dangerous:

  • corrosive substances
  • explosive substances and articles
  • flammable liquids and solids
  • gases
  • oxidizing substances
  • radioactive substances
  • toxic substances

Using sea transport for international trade

If your business needs to transport large quantities but there is no pressure to deliver quickly, shipping by sea may be suitable.

Other advantages include:

  • you can ship large volumes at low costs – a freight forwarder can consolidate consignments to reduce costs
  • shipping containers can also be used for further transportation by road or rail

Using rail transport for international trade

Rail transport is a cost-effective and efficient way to move your goods. It offers you the following advantages:

  • fast rail links throughout Europe
  • it is environmentally friendly compared with other transport modes

Using air transport for international trade

Air transport offers numerous advantages for international trade, depending on your requirements. It can:

  • deliver items quickly over long distances
  • give you high levels of security for sensitive items
  • be used for a range of goods

Warehousing and international trade

When moving your goods in and out of the UK, you may need some form of customs warehousing. This can give your business the following advantages:

  • it can enable you to delay the payment of import duty and VAT on imported goods, which can help with your long-term cashflow planning
  • if you will be re-exporting to a non-EU country, storing your goods in a customs warehouse usually means you won’t have to pay customs duty or VAT
  • if you don’t have the correct licences in place for imported goods, storing the goods in a customs warehouse can give you time to remedy this

There are two types of customs warehouse. Private warehouses – known as types C, D and E – are for the storage of goods by an individual trader. A public warehouse (type A) is authorised for use by a warehousekeeper who will accept your goods but takes no responsibility for them. You should check that the warehousekeeper is authorised by HM Revenue & Customs (HMRC) and that their excise premises are approved.

For all your planning import or export operations, Orratum Arbiter is here to help and guide you all the way through. info@orratumarbiter.com