What is Cross Trade Transportation?
Cross trade can be defined as the sale of goods to another country before they become national goods or before they enter the customs territory of that country. This transportation method refers to the direct sale of goods purchased from a company or warehouse located abroad or in a free zone, to another country or to a company or warehouse in the free zone. Technically, this method is not considered a real import and export process, and one of the most important features is that there is no need to issue a customs declaration.
When engaging in cross trade, it doesn’t matter where the purchased goods and cargo are shipped until they reach the buyer. At this stage, it is sufficient to arrange the shipment documents in accordance with the legislation of the countries where the goods enter and exit. During the loading process, the cross trade company is specified as the buyer in the contract arranged for the supplier at the loading port instead of the actual buyer. The seller company must prepare the packing list, commercial invoice, and all other related documents through the bank or according to a pre-determined arrangement. To ensure these processes run smoothly and documents are prepared correctly, it is recommended to work with a specialized logistics company. Cross trade logistics requires a good understanding of international transportation features.
Today, international trade laws and regulations open the door to many innovations. The ability of companies to operate independently of their geographical location is one of these innovations. Thanks to cross trade, companies are provided with all the logistical privileges they need to survive and grow in international markets. This increases their chances of competing in the international market. A company that sends goods worldwide can quickly grow and become a leader in its sector.
The advantages of cross trade transportation, especially preferred by companies wanting to engage in global trade, are as follows:
Lower Logistics Costs: Cross trade allows goods to be shipped directly from the supplier’s country to the buyer’s country independently. This means there is no need to first deliver the goods to your office and then send them to the buyer’s location, reducing all logistics, tax, and customs costs between the two different countries.
Faster Shipping Process: Cross trade logistics operations help select the most effective shipping method based on the geographical locations of the buyer and supplier. It also prevents customs and tax confusion, allowing for faster delivery and transit times where needed. With the development of international transportation, various methods have been developed to complete cross trade processes effectively and quickly. Methods that shorten the shipping time and protect the goods and cargo can minimize damage and losses. These advantages offer many privileges to both the supplier and the recipient companies.
Gaining a Foothold in the Global Market: For companies to grow and increase their profit margins, entering the global market is crucial. Many large companies that have become world leaders in mass production benefit from cross trade transportation methods. By using cross trade, you can ensure that goods are produced in one place and sent to another country independently of the business’s geographical location. This way, you can reach buyers from all over the world and establish a presence in the global market.
The following should be considered in cross trade logistics:
Commercial Agreements: Since cross trade logistics is usually conducted between two different countries, a detailed study of the trade agreements and rules between the buyer and supplier countries is required. This ensures that all necessary documents and prerequisites are met. Completing and correctly arranging these documents helps prevent technical problems during international transportation. Incorrectly or incompletely prepared documents can cause the transportation process to take longer than planned, damaging the goods and cargo and increasing costs.
Expert Logistics Company: An experienced and specialized logistics company should have a wide agency network, trade guidelines, a dedicated team, and experts knowledgeable about all the documents required for cross trade. These companies can make cross trade seamless by handling packaging, insurance, final delivery, customs clearance, and other documents.
In cross trade logistics, documents should be prepared and approved in accordance with the procedures of the country in which the activities are conducted. This should be handled by firms with a wide agency network to meet the transportation needs even in countries where they do not have a presence. Additionally, reliable and fast operations with accurate information flow ensure timely completion of processes. Companies offering customs clearance and delivery options provide comfort in logistics.
To gain a competitive advantage in the logistics sector, it is crucial to choose a reliable company. This ensures that goods and cargo are delivered to the specified address on time. Companies that organize import and export processes with great care provide safe logistics services. Firms that prepare the necessary documents for transfer processes and offer solutions to minimize foreign trade costs should be preferred.
Ministry of Transport and Infrastructure, Republic of Turkey.