SURFACE & AIR TRANSPORT

• 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.