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The document discusses various modes of surface and air transport that can be used for international trade, including their advantages and risks. It notes that road transport is relatively low-cost and flexible but long distances can take more time. Sea transport allows large volumes to be shipped at low costs but is slower. Rail transport is fast in Europe but routes have less flexibility. Air transport is quick but more expensive. Proper insurance, documentation, and consideration of goods type and delivery needs are essential to choosing the most suitable and cost-effective transportation options.
The document discusses various modes of surface and air transport that can be used for international trade, including their advantages and risks. It notes that road transport is relatively low-cost and flexible but long distances can take more time. Sea transport allows large volumes to be shipped at low costs but is slower. Rail transport is fast in Europe but routes have less flexibility. Air transport is quick but more expensive. Proper insurance, documentation, and consideration of goods type and delivery needs are essential to choosing the most suitable and cost-effective transportation options.
The document discusses various modes of surface and air transport that can be used for international trade, including their advantages and risks. It notes that road transport is relatively low-cost and flexible but long distances can take more time. Sea transport allows large volumes to be shipped at low costs but is slower. Rail transport is fast in Europe but routes have less flexibility. Air transport is quick but more expensive. Proper insurance, documentation, and consideration of goods type and delivery needs are essential to choosing the most suitable and cost-effective transportation options.
• Transport and distribution are key considerations
when planning for international trade. • Choosing the right mode of transport is essential to ensure that import or export operation is efficient and cost-effective • There are four ways of importing and exporting - road, rail, sea and air - more than one can be used (multimodal). • Also need to decide whether to handle logistics by yourself, or outsource the work to a freight forwarder. Assessing transport needs for international trade • Various factors influence transportation needs like business’ requirements, the destination country, and the type of goods importing or exporting. • Aim is to balance service quality, cost, organisation and time Ask 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? 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. • Another issue is whether or not your goods need to be kept refrigerated during transport. • If you are transporting animals, you must follow specific rules and regulations regarding depart of environment, rules regarding custom clearance on animal product. • If the goods being transporting are classified as dangerous, special rules regarding health and safety and how to move dangerous products should be complied with. 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 road transport for international trade Advantages: • relatively low cost • extensive road networks • can schedule transport to suit you and you can track the location of goods • consignments can be secure and private • Most flexible if the motorway network is good and crossing national borders is usually quick and efficient like EU Risks for road transport: • long distances overland can take more time • there can be traffic delays and breakdowns • there is the risk of goods being damaged, especially over long distances • toll charges are high in some countries • some countries have different road and traffic regulations • Goods-in-transit insurance can protect if goods are lost or damaged when transported. • You can either use your own vehicles, or a carrier. If you operate your own vehicles, you will need to consider licences, fuel costs, regulations, driver training and tax. Different types of carrier, include: • Couriers - specialise in the speedy and secure delivery of small goods and packages. • Hauliers - will collect goods from your premises and deliver them by road. • Freight forwarders - consolidate shipments and have a detailed knowledge of the rules and regulations that your business must comply with. Using sea transport for international trade Advantages • If your business needs to transport large quantities but there is no pressure to deliver quickly, shipping by sea may be suitable. • 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. Risks for sea transport: • shipping by sea can be slower than other transport modes and bad weather can add further delays. • routes and timetables are usually inflexible. • tracking your goods’ progress is difficult. • you have to pay port duties and taxes. • further transportation overland will be needed to reach the final destination. • basic freight rates are subject to fuel and currency surcharges. • Protect your consignments with insurance: maritime insurance, cargo insurance etc. Documents under Sea Transport • All consignments must be accompanied by either a Bill of Lading or Sea Waybill (when you know the creditworthiness of the business you’re shipping to). • These documents clearly set out who the consignment owner is and the terms of the contract of carriage. • Dangerous Goods Note to be prepared Using rail transport for international trade Advantages: • fast rail links throughout Europe • it is environmentally friendly compared with other transport modes • cost-effective and efficient way to move your goods. Risks for rail transport • routes and timetables available can be inflexible, especially in remote regions • rail transport can be more expensive than road transport • mechanical failure or industrial action can disrupt services • further transportation may be needed from a rail depot to the final destination, adding to costs and affecting delivery schedules Insurance and documentation • If you transport goods by rail, the Convention Concerning International Carriage by Rail (COTIF) is the system of law which applies in the 45 states in Europe, North Africa and the Middle East that are members of OTIF, the International Organisation for International Carriage by Rail. • You should also be aware of the CIM consignment note that sets the conditions for transporting non-dangerous goods by rail. • If you transport dangerous goods that have a UN dangerous goods code, or that your carrier considers to be dangerous, you must complete a dangerous goods declaration. Using Pipe-lines for international trade • Pipeline routes are practically unlimited as they can be laid on land or under water. • The longest gas pipeline links Alberta to Sarnia (Canada), which is 2,911 km in length. The longest oil pipeline is the Transiberian, extending over 9,344 km from the Russian arctic oilfields in eastern Siberia to Western Europe. • Physical constraints are low and include the landscape and pergelisol in arctic or subarctic environments. • Pipeline construction costs vary according to the diameter and increase proportionally with the distance and with the viscosity of fluids (from gas, low viscosity, to oil, high viscosity). • The Trans Alaskan pipeline, which is 1,300 km long, was built under difficult conditions and has to be above ground for most of its path. • Pipeline terminals are very important since they correspond to refineries and harbors. Using air transport for international trade • deliver items quickly over long distances • give high levels of security for sensitive items • be used for a range of goods Risks associated with International Trade • air transport can involve higher costs than other options, and is not suitable for all goods • flights are subject to delay or cancellation • you will need to pay taxes at each airport you use • fuel and currency surcharges will usually be added to freight costs • further transportation may be needed from the destination airport to the final destination • General cargo insurance is available in three levels - clauses A, B or C. Air transport can also use the Institute Cargo Clauses (Air). The level of insurance is reflected in the premiums that must be paid. Level of insurance should be matched to the potential risk the consignment is put under. Documents and regulations
• The Air Waybill sets out the contract between
business and the carrier being used. • The e-freight project aims to remove all paperwork from air cargo transportation.