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International logistics

INTERNATIONAL LOGISTICS

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Logistics must ensure your customer's total satisfaction in the delivery of the goods you have sold them. International logistics refers to the set of associated activities, aimed at the flow of information and materials at the global levelThe process starts with the sourcing of raw materials in a given country and ends with the delivery of the final product to the customer in the country of destination. Logistics is If it is complex and requires a great deal of investment and specialisation, it is best to outsource to one of the large logistics operators that work very well and at a very reasonable cost.

Today, logistics is an extremely important aspect of physical distribution. necessary to understand the processes and regulation of exports and imports of goods, through the correct application of the forms of organisation, financing, projection and international marketing to obtain as a result an improvement in terms of time, money and effort in the delivery of a product to the final consumer.

Thus, by implementing a correct logistics strategy, the result will be to reduce costs and increase sales locally and globally, by controlling inventories and reducing the time between orders and deliveries, maximising the use of financial, technical and human resources.

The trend demands being competitive in a globalised world, for which it is necessary to reduce unnecessary steps, measure processes, reduce costs and eliminate risks in order to perfect the order-delivery cycle, perfect the order transmission and processing process, perfect order production, order delivery, and order administration, measuring the effectiveness of each process to achieve competitive advantages at a global level.

The elements that make up logistics at the global level include

  1. Services.
  2. Needs.
  3. Planning.
  4. Processes such as labelling.
  5. Transport.
  6. Storage.
  7. Manoeuvres.
  8. Packaging.
  9. Customs management.
  10. Various acts that increase customer service.

The constant advance of international logistics is the product of the technological advance of globalisation, which is based on the theory of supply and demand, serving as a primary market tool allowing the economic growth of countries, orienting their production to the customer, for which it has been necessary to implement a global marketing with modern international logistics.

This consists of attending to business as requested by the customer, increasing customer service and attention, reducing the cycle between the order and delivery, complying with the established date and times, increasing confidence in the delivery and quality of the product, for which it is important to take into account the following aspects communication with the client and being prepared in case of emergencies or unforeseen circumstances.

A good logistics strategy reduces the costs of physical distribution, increasing service, both to the customer and to those involved by increasing the quality of information and the specialisation of resources, to reduce economic investment by keeping inventories to a minimum and making costs more flexible by making them variable.

Most importantly, Just-in-Time delivery was ensured.

  • LABELLING

This can be commercial, care and marking labelling or import labelling including codes, country of origin, quantity and weight.

  • PACKING AND PACKAGING

It must offer the certainty of delivery of the product complete and in good condition, without increasing costs.

  • LONG-DISTANCE TRANSPORTATION

The means of transport must be decided that will provide precision delivery on exact dates, taking into consideration customs clearance.

  • DELIVERY OR SHORT-DISTANCE TRANSPORT

Consider prompt delivery, taking into account delivery times and quantities, not forgetting the customs clearance involved.

  • DISTRIBUTION AND WAREHOUSING

They consist of distribution centres where goods are prepared, verifying quantities, tariff classification, codes, weights, etc., to be stored on shelves, if necessary, or to be distributed to their final destination, automatically reducing inventories.

  • MANOEUVRING AND STOWAGE

It consists of arranging the goods in the best way to optimise their handling and minimise risks.

  • CUSTOMS CLEARANCE

Goods should be prepared for customs clearance, from the way the goods are stowed and labelled, to the presentation of accurate and precise documentation, in order to avoid unnecessary delays and setbacks.

Logistics Process Services

The substantive elements, consisting of information and cooperation, are useful tools for achieving goals through processed communication, on the basis of which the comprehensive planning of joint operations is carried out, such as:

  • Ordering: They consist of receiving sales in advance and allowing for their forecasting.
  • Transmission and processing of orders: It is the confirmation of orders to prepare and manage them in inventories and warehouses.
  • Route of goods: Plan transport and delivery according to type of client, area and time.
  • Warehousing and inventories: Manage load orders and distribution control by automatically deducting goods from their inventories.
  • Contingencies and complaints: They measure quality parameters in case of delivery incidents and complaints to improve delivery conditions and customer service.

The final result of the application of the logistics process is to obtain greater competitiveness in real and concrete terms, reducing costs without affecting product quality and customer service.

UPDATE

Implementation of the International Logistics Process

When the International Logistics process is applied concretely, a whole Integral System is put into practice that allows absolute efficiency to be achieved, involving information management and knowledge about distribution, where the most important aspect is the need for customers to receive their orders on the stipulated date, avoiding inventories and reducing costs, without stopping production or marketing, and that the end consumer always wins by delivering orders just in time for the customer, avoiding unnecessary time, costs and risks.

Today, this is no longer necessary, focus on delivering a quality product in a given timeframe, but how to get it to the final consumer in the time required by the customer.

Becoming more competitive requires following the next steps of the international logistics process:

  • You must identify consumption needs in volume and time, in order not to produce more than what is going to be consumed nor to produce before it is consumed, thus only producing what is sold, managing to satisfy the needs of the customers, considering the volume of their requirements per order, being able to plan the orders according to the customers' habits.
  • Identify methods for storing goods, which are expected to be stored for a short time, occupying only the unloading position, which will be the same position from which they will be dispatched, taking care not to occupy risky positions due to handling, loading and unloading.
  • Identifying the right moment The way they must label, pack and package goods in order to comply with global trade and customs regulations, which require specific markings or trade information, without double handling, delays and unnecessary costs.
  • Identifying means of transport to help reduce loading and unloading handling, and to know the best ways to stow goods so as not to hinder loading and unloading internationally, upon customs request.
  • Locate redistribution points of the goods, so as not to make customers' goods travel longer than necessary.
  • Consider the type of documentation that will be required, whether customs, fiscal or commercial, in order to avoid unnecessary delays and costs. Such documentation includes the technicalities of transport and insurance, as well as legal or customs clearance documentation.
  • Take into account customs handling and storage costs, which are usually unnecessary expenses that can be avoided by correctly preparing customs documentation and goods in advance so that they comply with legal packaging and labelling requirements.
  • To have a computer system that provides information, communication and control, in order to manage orders, customs documents, monitor routes, warehouse status and foresee contingencies to generate immediate solutions.
  • Integrate the participants of the productive and commercial chains in the international logistics process in order to solve problems and implement changes, since international logistics decisions affect everyone in order to achieve the changes that efficiency demands, as illustrated below.

DISCUSSION

Logistics is a sophisticated science that contributes to the solution of problems based on the study of alternatives, with the objective of reducing costs in the manufacture and delivery of products, achieving the goal of being more competitive locally, nationally and internationally. At present, thehe customer demands price, quality and timely delivery, for which consideration should be given to achieving all of these at the lowest price.

However, logistics does not come cheap, as evidenced by the most important topics involved, such as packaging, marking, warehousing, inventory control, computer systems, loading and unloading handling, transport, customs, delivery and distribution.

There is a very fashionable way in today's world and widely used by various companies for the low cost at which it provides logistics services in a specialised way, called Outsourcing, in fact several bonded warehouses and customs agencies, among others, are already using it to provide a better service to their customers, allowing them to be more competitive.

In spite of this, although they have all these facilities to be more competitive, the goods cannot reach their destination without first having passed through customs, and to enter a certain product into a certain country they must have complied with phytosanitary and sanitary standards, since the objects to enter the countries may be medicines that are not allowed to produce prohibited drugs, for example, For this reason, customs ensure strict compliance with regulations, presentation of permits and customs procedures such as physical and documentary verification to protect the world's population from various situations ranging from possible outbreaks of new viruses in the population to much more complex situations.

Even so, perfect planning is possible, and to achieve it the importer must know in a timely manner his tariff classification and therefore his tariff rate, which is presented in the Harmonised System of Classification and Coding (worldwide for 165 countries in the world, approved by the WCO), or the Central American Tariff System (at the Central American level).

It is extremely important to know the tariff classification of the product to be marketed abroad, in order to take into account the restrictions it has, i.e. the documents that must be presented at customs clearance, the tariff rate that must be paid, the permits that must be presented, other internal taxes that must be complied with, such as restrictions on tobacco, value added tax and others.

Before presenting the goods for customs clearance, the necessary documentation to be presented must be known, depending also on the customs regime in question, since what is necessary to present for some regimes is not necessary for others, but if for some reason some of the information necessary to clear the goods in a few hours is not available, unnecessary expenses and delays will be incurred, and the goods will not be competitive.

In addition to the information necessary to present the complete documentation to customs, it is important to take into account the costs of customs in logistics, as there are customs offices that provide services more quickly and less expensively than others, some have more space for ramps than others and some are better located geographically than others.

And, last but not least, the last aspect to be taken to present the merchandise with its complete documentation to customs is the use of adequate professional services, which work the documentation in a legal manner, applying their knowledge with professionalism, to provide an excellent service to their clients, whose goal is to be competitive, and they will achieve it if they hire an efficient customs broker.

RECOMMENDATIONS

In order to know how logistics should be applied in different businesses, and to know the depth with which it should be applied, it is necessary to apply Differentiation Factors, since each business is different and presents different situations that make logistics applicable to a certain business, totally inapplicable to another business.

  • FIRST FACTOR

It is to observe the distribution channels, made up of the set of companies or individuals that make possible the manufacture, distribution and use of a certain good or service, the further away from the final consumer it is, the more complex the logistics are, as there are more companies involved, and the closer to the final consumer it is, the more services must be implemented.

  • SECOND FACTOR

It is the economic and commercial relevance, it is necessary to observe the cases of greater or lesser economic relevance, for which the location, customs, diversity and needs of the clients must be taken as a starting point.

  • THIRD FACTOR

It is the integration of efforts with the rest of the supply chain, a strategy must be implemented that motivates supplies to be part of the chain, in order to improve systems, reduce costs and ensure delivery.

  • FOURTH FACTOR

We have the conditions of delivery, service and quality of the products and services offered, with the aim of identifying the customer service strategy and the degree of satisfaction obtained from the product purchased or the service provided, in terms of quality and the time taken to receive it.

  • FIFTH FACTOR

consists of applied and potential technology, this factor refers to the computer systems that are used, however there are companies that do not have access to this technology or it is not in line with the matrix.

  • SIXTH FACTOR

It is extremely important, and that is the standardisation of the parties, because if you want to obtain satisfactory results, you must work under the same standard, your own standard, based on manuals, audits and company policies, these standards consist of writing down tasks, objectives and obligations of each integral part, which allows, among other things, to verify that tasks are not duplicated or unnecessary processes are carried out.

  • SEVENTH FACTOR

It consists of verifying the integrated direct, indirect and hidden costs in order to calculate the impact of the costs on the product and to establish rules for their reduction as part of the logistics strategy. Thus, direct costs include local and international transport, packaging, signage, customs clearance, taxes and other contributions, handling, container rental and storage, among others.

Indirect costs include delays, defects and damages, cancellations, among others, and hidden costs include those that cannot be programmed but can be foreseen, such as customs or fiscal contingencies.

The above seven differentiating factors must be applied to the business that intends to implement logistics, in order to formalise an adequate and calculating strategy based on an exact and controlled science such as International Logistics.

CONCLUSION

International trade has been transcending and modernising throughout history, up to the present day when the most important thing is the delivery time of the purchased good, the consumer's need to obtain his product in the time he needs it, and in order to meet the customer's needs, suppliers do the impossible to meet that need, or else they may lose that sale forever.

Faced with this situation, suppliers have resorted to using production strategies that improve delivery times at low cost, which translates as international logistics.

Such strategies include all suppliers of goods and services, including transport, packaging, storage, labelling, customs and inventory management, which as integrated links form part of the production and commercial chain together with the buyers of goods, from the moment the idea of producing a certain product or service arises until its delivery to the final consumer, working together for the same purpose, with effective communication and efficient information flow, minimising costs and optimising resources that are shared among those involved.

However, the fundamental part of international logistics lies in the automation of processes, with a good computer system that allows those involved to know their participation, announce their operational processes, report their degree of progress, and monitor the process, so that if any contingency arises that could delay the loads, an alternative can be found that allows the product to be delivered on the established date and time.

All with the aim of optimising resources, reducing costs, inventories and delivery times, always taking into consideration the necessary documents and regulations required by customs at an international level to achieve the desired goal: Competitiveness.

SEE DHL'S PACKAGING TIPS

Means of international maritime transport

The characteristics are their high load capacity and their adaptability to transport all kinds of products, volumes and values.

The low cost, compared to other modes of transport, particularly for large volumes and long distances, makes this mode the most suitable for a high percentage of internationally traded goods. Container and general cargo traffic follows certain routes which are complemented by transhipments, thus generating an increasing intensity of flows. 

TYPES:

Maritime transport offers various types of shipping and services: international, cabotage and short sea shipping, as a start or continuation of a voyage. Their mode of commercial operation is classified as liner or charter. Unit load is the most versatile mode: it transports gases, liquids, conventional and roll-on/roll-off cargo. 

The most widely used unit, since its standardisation, is the ISO container, which allows for intermodality, improving physical circuits and making better use of the first and second level units. 

AGENTS

It is difficult to define the boundaries of the maritime sector's activities given the large number of personal figures involved: port, shipowner, shipping line, consignee, broker, stevedore, customs and border inspector are the most common. 

CONTRACT OF CARRIAGE AND REGULATION

The document that proves the existence of a contract of carriage service is the charter party for non-scheduled lines and the bill of lading for scheduled lines. In addition to indicating the contractual terms, the bill of lading serves as an acknowledgement of receipt and a negotiable instrument.

Despite the fact that there is no regulatory unification or coordination in terms of jurisdiction, in international maritime transport the procedural problems are minimal and lead to recourse to the internal rules of each state. 

The liability regime at the national level is regulated by the Commercial Code, and at the international level by the Visby Protocol, the Brussels Convention and the Hamburg Rules, the latter not ratified by Spain.

Main documents

  • Sea Way Bill
  • Charter party

(charter party bill of lading)

OUR RECOMMENDATION

Although the risk margin is very low, damage can occur due to force majeure. It is therefore advisable to protect the product and the investment by means of transport insurance.

Means of transport: international air transport.

CHARACTERISTICS

It is the fastest growing mode of transport and must reconcile cost-effectiveness with safety and environmental friendliness. The characteristic The most remarkable feature is its speed of movement, and therefore transports higher unit value, time-sensitive and perishable goods. 

It offers medium and long distance services, its costs are high and its capacity, in terms of weight and size, is limited. The main airports are working according to the hub configuration, which increases the complexity and concentration of operations over time. The optimisation of connectivity will come from the functional relationship of the airport with its surroundings and its infrastructures. 

TYPES

The commercial operation of air transport may be scheduled or chartered, mixed cargo/passenger or cargo. 

LOADING UNIT

Depending on the type and model of aircraft, the characteristics of the holds differ: they can be containerisedor conventional.

ULDs are used in containerised holds, which may or may not belong to the aircraft, but which must conform to IATA technical criteria. 

AGENTS

IATA cargo agents are the most visible figure in the airfreight chain and coordinate the other actors involved, such as airport managers, airlines, cargo terminals, border inspection services and GSAs. 

CONTRACT OF CARRIAGE AND REGULATION

There is a single transport document, for both domestic and international transport, called an air way bill. It is a non-negotiable nominative document, can serve as an insurance certificate and is regulated by the Warsaw Convention and its subsequent amendments.

MORE TIPS:

Open skies" agreements are allowing unrestricted market access for airlines, thus achieving the concept of economy of scale. 

On the other hand, destinations with a small number of services create high and rigid costs that have a major impact on the competitiveness of the product. 

VOCABULARY

  • ULD (unit load device): pallet or air container used as a unit load.
  • GSA (general sales agent): agent providing marketing and sales services to airlines in countries where they have no or limited commercial representation. 

On the Internet IATA (International Air Transport Association) is the association representing 93 % scheduled airlines. (+ information)

Means of international transport by ROAD

Road transport has experienced a remarkable growth due to its great capacity to penetrate, to reach any loading or unloading point regardless of environmental and territorial problems.

On short and medium distances it is the most competitive mode, interoperates with all other modes and achieves a high rate of competition and subcontracting.

Factors such as congestion, high accident and accident rates and the infrastructures it uses, together with those derived from pollution and energy consumption, are forcing administrations to rethink this transport model. 

TYPES

Depending on the scope, they can be classified as urban, inland, national, international and special; 

  • According to their function, they are divided into regular and discretionary. 
  • Depending on the load, in full or fractioned. 

LOADING UNIT

Apart from intermodal units, the most common secondary loading unit in uni-modal road transport is the pallet. The maximum axle weights and truck dimensions determine the load and vary from country to country. 

AGENTS

Despite being a highly atomised sector, the number of actors involved in international road transport is reduced, in its uni-modal form, compared to other modes. Transport agencies, customs and inspection services are the main operators.

Contract of carriage and regulation andational transport is governed by the consignment note as a document and the provisions of the LOTT and the LCTTM, and international transport is governed by the international consignment note and the CMR Convention.

THE APPLICABLE LAWS
  • LOTT: Ley de Ordenación de los Transportes Terrestres. 
  • LCTTM: Law on the contract of carriage of goods by land. 
  • CMR: Convention on the Contract for the International Carriage of Goods by Road.

International means of transport RAIL

Rail is the mode with the smallest share in Europe due to the national character of its networks. Liberalisation and the EU's harmonisation and investment policies to create a single space, given the security and environmental friendliness it represents, are boosting this environment. 

With the right infrastructure in place, it can be competitive for medium and long distances, heavy, bulk and roll-on/roll-off freight, and has demonstrated a high capacity for automation and interoperability with other modes such as maritime. 

Efforts are being made to make more use of conventional routes for transporting goods and also to open up the possibility of using high-performance lines to move goods more quickly and safely. 

TYPES

The current offer is focused on full load. Breakbulk cannot yet compete with other modes because of the commercial and operational rigidity of rail. 

LOADING UNIT

The most commonly used loading unit in rail is the wagon adapted to the different types of goods and the ISO sea container in its multimodal use.

One of the consequences of the privatisation of rail services will be the emergence of new transport units, such as the rolling road on wagons. 

AGENTS

Rail separates infrastructure management from rail operators, transport operators and terminals. As in the other modes, customs and inspection services are also involved. 

CONTRACT OF CARRIAGE AND REGULATION

National rail transport is governed by the railway consignment note as a document, the LOTT and the LCTTM, and international rail transport is governed by the CIM consignment note, the COTIF Convention and the CIM Rules.

International transport. MULTIMODAL

Multimodal transport integrates two or more different modes of transport to complete a distribution chain from origin to destination, and through a comprehensive approach makes more rational use of available capacities. 

Rail, inland waterways and air transport alone do not allow door-to-door transport and face difficulties during their combination. On a journey, a change of transport mode is more like a change of system than a mere technical transfer. 

The resulting friction costs have an impact on the competitiveness of intermodal transport and, without a suitable intermediary, can result in higher prices, longer times and journeys, and fewer quality services available. 

The transport operator or freight forwarder is the integrator of the different modes and ensures the piloting of the harmonisation process of the loading unit, dates and documentation. The transport document is the FIATA combined transport bill of lading, regulated by the Geneva Convention 1980, but not yet ratified by a minimum number of countries for international application. 

The current system is financed and administered independently, which makes it fragmented and makes it difficult to determine liability for damages and applicable covenants between related parties. 

ADVANTAGES OF INTERNATIONAL MULTIMODAL TRANSPORT:

  • Costs.
  • Reliability.
  • Frequency.
  • Integrity of goods / security.
  • Flexibility.
  • Incident response.
  • Transit time.
  • Complementary services.
  • Information systems.
  • Administrative procedures.

International transport operator

The international transport operator or freight forwarder is the natural or legal person specialised in the organisation and management of the freight transport chain, in any of its single or combined modes. 

In addition, it can offer and integrate ancillary transport services such as freight forwarding, customs clearance, insurance, warehousing, distribution and consultancy. 

Globalisation has rendered these functions, independently, somewhat obsolete, and initiative is the basic ingredient for the transport operator to move away from the role of order executor and adopt a collaborative attitude in international transactions, bringing more value to organisations. 

In other words, it is necessary to integrate capabilities and understand the international company's business model in order to identify obstacles to transport fluidity, leverage information and communication, simplify the supply chain, reduce costs and improve the use of transport modes and infrastructure.

The LOTT recognises this figure and allows it to issue various types of documents for control and transport as a contractual intermediary. Some of the most commonly used documents are the FIATA bill of lading, as a multimodal transport document, and the forwarding certificate receipt, as a certificate of receipt.

CRITERIA FOR YOU TO SELECT THE RIGHT INTERNATIONAL TRANSPORT OPERATOR:

  • Quality of service.
  • Compliance with delivery deadlines.
  • Cost.
  • Treatment of goods.
  • Response to incidents.
  • Quality certifications.
  • Proactivity.

Distribution hubs

The high economic density of some regions, the need to reduce costs and exposure to volatile energy prices are creating increasing concentration of business, activity and routes in the international supply chain, and making it easier for operators to access the inherent benefits of economies of scale. 

Nowadays, one of the phenomena that marks the strategic importance of logistics are the international distribution centres or hubs, which act as a transit point for goods belonging to an increasingly larger geographical area. 

The function of these hubs is not so much to be a point of origin or destination, but to serve as a connection, consolidation and redirection centre for goods from other countries. Its proximity has advantages and a clear revitalising effect on economic activity in the area. 

The most visible advantage is the reduction of provisioning time, and the influence, technology and regulation of these infrastructures also influence competitiveness, greater service offerings and better operational knowledge. 

Therefore, these logistics centres are closely linked to the economic reality of the environment, and their positioning depends on geographical, economic, cultural and market factors, as well as on the decision of the mega ship, plane and train operators.

The overall intermodal transport network is structured on three levels

The first is made up of global hubs, located basically in the northern hemisphere; in the second are the regional hubs, which also have their role of concentration and distribution but on a smaller scale, and, finally, there are the national logistics nodes, together with the territories of influence. 

  • THE CUSTOMS DEBT

The customs debt is the amount to be paid which results from the equation between a taxable amount, the customs value of the goods and a tax rate. This tax rate is determined by the tariff classification and origin of the goods.

THIS DEFINITION DEFINES THE THREE KEYS TO CUSTOMS, THE CONTENT OF WHICH IS DETAILED IN THE FOLLOWING PARAGRAPHS: 
  • Customs value.
  • Origin of goods.

Tariff classification 

The determination of these three elements often involves a complex technical study and it is difficult to determine which tax element should prevail in the calculation of the customs debt for an international trade operation. 

Customs debt is a fundamental cost to be taken into account in trade. Companies that study and take advice on the amounts to be settled in their international transactions are guaranteed not to have unexpected costs during the period of validity of the customs declarations.

The import or export of goods may also be subject to additional duties, anti-dumping, countervailing or export taxes. In addition to the customs debt, Indirect taxes, VAT and excise duties are usually paid on importation.

The maximum customs duties to be paid on an import can be seen in the following table

Reduced by preferential agreements or trade policy measures (suspensions, quotas, etc.). Import planning must be done to see what measures can help to reduce costs in the payment of customs duties.

Customs duties are taxes levied on the importation of certain goods. SThe Commission has not yet adopted an ad valorem approach: a certain percentage is applied to the customs value.

Tax base (customs value) x tax rate = customs duty

Example: 100.000 € x 2,5 % = 2.500 €.

However, there are other tax rates. These are the specific rights and mixed. The former are rights whose determination must be made according to the number of units, weight or volume of the imported goods.

Tax base (units, weight or volume of goods) x rate of taxation = customs duty

Example: 20.000 mt x 12,00 €/mt = 240.000 €

Finally, mixed are those that combine both rates of taxation. For the same goods there is a percentage rate which will settle the ad valorem duty on the same goods. and, additionally, a specific type that taxed on the units, the weight or the volume.

Tax base (customs value) x tax rate = customs duty

Tax base (units, weight or volume of goods) x tax rate = customs duty

Example:

Mixed type

11,2 % + 23,8 €/QN (QN = quintal net)

100.000 € x 11,2 % = 11.200 €.

200 QN x 23.8 €/QN = 4,760 €.

Total customs duties = 15.960 €.

Customs value

The customs value is the value established by the World Trade Organisation (WTO), adapted to the notes, criteria or rules issued by its Value Committee. The customs value of goods corresponds to a theoretical definition. 

This definition is based on the invoice price (in the case of a sale), and by adding and subtracting certain items (freight, commissions, royalties, financial interest, etc.), sometimes by increasing and sometimes by decreasing in an algebraic sum, the customs value is reached, which may be different from the transactional value. 

THE VALUE REGULATIONS PROVIDE FOR TWO WAYS OF VALUING GOODS AT THE TIME OF IMPORTATION:

  • The main criterion.
  • The secondary criterion.

The primary criterion is based on the transaction value, i.e. the price paid or payable for the imported goods, while the secondary criterion is applied when the transaction does not qualify for transaction value, or because transaction value does not exist.

The customs value is the taxable base on which the ad valorem tariff is applied and is one of the components of the import VAT base. Make sure that the customs value is correct, as it is the taxable base for import duties and therefore affects the determination of the direct costs of the operation. 

More information on customs valuation can be found on the website of the World Trade Organisation: http://www.wto.org/indexsp.htm

Origin of goods

It is the set of rules established by a country or set by mutual agreement between two countries (or group of countries) that lead to the determination of the country to be considered as the originator of the goods obtained or processed. 

PROOF OF ORIGIN OF THE GOODS IS REQUIRED FOR: 

  • The correct application of customs duties, which allows, where applicable, to benefit from the tariffs of countries that have specific agreements with the EU.
  • The correct application of non-tariff measures established in the exchange of goods, such as phytosanitary or trade policy measures. 
  • The possibility of certifying the Community origin of goods exported to countries with preferential agreements, so that they can be imported into those countries with tariff benefits. 

A distinction is thus made between the preferential and non-preferential origin of goods, the rules governing which establish, among other aspects, the degree of processing to which a product must undergo in order for the resulting goods to be considered as originating in the country where the last processing has been carried out, as well as the documents to be used to prove the declared origin.

Community legislation provides for a number of basic, so-called insufficient transformations, which do not allow the origin of the product to be changed. Companies have to be particularly careful when applying for EUR 1 movement certificates covering the export of their goods, as they have to ensure that the goods have been sufficiently processed to qualify as originating in accordance with the agreements between the countries traded. 

When goods are imported, the payment of taxes changes the status but not their origin.  Check list origin Scheme to be considered for certification of non-preferential and preferential origin. Tariff classification. TARIC

The need for countries to establish common criteria and uniform rules in their foreign trade relations led to the creation of a tariff nomenclature that would allow the codification of imported and exported goods. 

THE EUROPEAN UNION HAS ESTABLISHED THE INTEGRATED TARIFF OF THE EUROPEAN COMMUNITIES TARIC, BASED ON THE HARMONISED SYSTEM OF DESCRIPTION AND CLASSIFICATION OF GOODS, WHICH MAKES IT POSSIBLE TO ESTABLISH:

  • Tariffs and other charges levied on goods. 
  • The inspections to which the import and export of goods is subject by the technical border inspection services. 
  • Applicable trade policy conditions, such as quotas, tariff preferences and prior import or export authorisations. 
  • Consultation of foreign trade statistics. 

Customs classification is progressive in the arrangement of goods, so that its starting point is the natural products in their raw state, to advance in classification as the products are further processed, according to their constituent material, their function and the use and destination of the goods.

The correct classification of goods is essential for the success of foreign trade operations.

Tariff classification can be complex. In case of doubt, it is advisable to request binding tariff information, which will give us legal certainty in the classification declared in our operations. 

The Harmonised Commodity Classification System is the indispensable language that allows the international identification of goods with six digits. 

This system is developed in the World Customs Organisation and most countries adhere to it.

Almost all goods traded abroad are classified according to the terms of the Harmonised System. The adaptation of the Harmonised System to the European Union is the Combined Nomenclature. This nomenclature makes it possible to apply the Common Customs Tariff (customs duties, common to the EU). 

The Integrated Tariff of the European Communities, TARIC, also determines commercial policy measures other than the Common Customs Tariff. 

More information on the Harmonised Commodity Classification System can be found on the internet at World Customs Organisation website.

Technical border inspection services

Through customs all goods subject to foreign trade pass through. However, not all import or export controls are carried out by the customs administration itself. At borders, certain products, either by virtue of their status or their destination, must be subject to controls by external health, animal health, plant health, pharmacy inspection, commercial quality or CITES. 

The inspection by the services is carried out by specialised personnel in each of the areas, who issue the corresponding certificate giving conformity to the traffic of the goods. This certificate must be presented together with the SAD in order to clear the goods for import or export, as appropriate. In other cases it will be necessary for the consignee of the goods to carry out import formalities in his country. 

If the result of the inspection is not in conformity, the goods may be re-dispatched to another (non-EU) country, destroyed or confiscated as appropriate in each case. The inspection by the technical border inspection services often requires the presentation of certificates, issued in the countries of origin, of the goods that guarantee the conditions and a prior inspection before their departure from the exporting country. 

When you receive goods subject to inspection, make sure that all documentation is issued correctly at origin, and when your company is shipping the goods, ask your customer what documentation will be required for importation.

Authorised Economic Operator (AEO)

The World Customs Organisation (WCO) created the figure of the authorised economic operator, as it is called in the European Union, with the mission of designating reliable operators, i.e. companies in the logistics chain that are capable of guaranteeing security. 

The Authorised Economic Operator (AEO) allows companies that are considered as "trusted partners" by the customs administration, after having been audited by them, to undergo fewer customs controls, so that their goods can move smoothly into and out of the Community customs territory. 

It is a a tool created by customs to prevent security checks from being carried out indiscriminately on any type of company. Companies whose security procedures are audited by customs have their controls reduced and therefore have less costs to bear and can dispose of their goods more quickly. 

The recognition of these figures between countries, within the framework of the WCO, aims to establish secure logistics chains at the international level and to guarantee the fluid traffic of goods between companies that habitually carry out foreign trade operations. 

All this This entails a commitment by customs to concentrate their efforts on the surveillance of uncertified operations and to ensure the protection of citizens. If your company regularly carries out foreign trade operations, you should consider the possibility of becoming AEO certified. To do so, you should take into account the advantages granted by customs, which may allow a reduction in clearance times and costs, as well as having the corporate brand before your customers, your suppliers and customs itself.

Standardisation and conformity assessment

Standardisation is the activity of developing technical standards, which are documents that set out requirements defining ways of making products, processes and services and ways of managing organisations. Standards are developed within standardisation bodies at national (e.g. AENOR), regional (e.g. CEN) or global (e.g. ISO) level. 

It is true that public technical standards are the largest global knowledge support available to organisations. ISO standards, because of their universal character, have become a staple of world trade, as evidenced both by the testimonies of the World Trade Organisation (WTO) and their increasing use in setting the technical conditions for world trade. 

The characterisation, not only of the product, but also of parts of the service, through referencing to ISO standards allows for a better and faster understanding between buyer and seller, as well as facilitating entry into all those markets that use them, which are already the majority worldwide. The identity of ISO standards with regional standards (EN, in the case of Europe) and national standards (UNE, in the case of Spain) is an additional advantage for their use.

When considering the export of certain products to a certain country, it is necessary to know, among other things, the mandatory technical requirements (administrative regulations) and market requirements, both for the product itself and for its additional elements such as containers and packaging. In both cases, it is advisable for the manufacturer/exporter to know which technical regulations are being used in the country of destination and their correspondence with national standards.

The inspection

Buying and selling goods in international markets involves a number of risks, both for the buyer and the seller. Among them is that the goods comply with all the requirements that apply to them, whether they are imposed by the buyer or by the legislation of the country of destination and also of the country of origin. 

This is why the manufacturer must be fully and clearly aware of the requirements to be met by the product and also by the packaging, wrapping and instructions for use before dispatching the goods and even before producing them, not forgetting the form in which the documentary evidence is to be presented. 

Pre-shipment verification of compliance with the requirements by an independent and technically competent entity provides the seller and the buyer with the assurance that the goods will move smoothly and will not be detained in the country of destination. 

TO DO SO:

  • Documentation of compliance must reach the buyer or his representative prior to the arrival of the goods at destination, so that the goods can be cleared through customs when they arrive.
  • If necessary, the inspection entity must be recognised by the competent authorities. 
  • The inspection entity must have a network that allows it to intervene close to the responsible bodies when, for whatever reason, the goods are detained, in order to act quickly and efficiently to release them.

THE USE OF THE SERVICES OF AN INSPECTION ENTITY MAY BE ADVISED BY:

  • Imposition of the buyer. 
  • The seller, as a precautionary measure. 
  • Documentary credit. 
  • The legislation of the country of origin and/or destination. 

IN ANY CASE, THE APPLICANT FOR INSPECTION SERVICES SHOULD CONTACT THE CHOSEN ENTITY IN TIME FOR THE FOLLOWING ISSUES TO BE SATISFACTORILY RESOLVED:

  • Consider all requirements to be fulfilled. 
  • Have all the necessary documents (packing list, invoices, certificate of origin, test reports, etc.). 
  • Transmit all information to the place of use.
  • Arrange inspection dates with the seller. 
  • Resolving any incidents that may arise.

THE CERTIFICATION

Certification is a tool whose ultimate objective is to give confidence to the buyer that a product/process/service or management system complies with the requirements set out in a standard or technical document. 

Its fundamental difference with inspection is that inspection verifies compliance at a specific place and time (photo), whereas certification is of a continuous nature (film): through certain mechanisms it ensures that over a certain period of time a product/process/service/management system will meet the specified requirements.  Currently, certification has become an almost obligatory tool in the international market.

For example, the certification of organisations' management systems according to ISO 9001 exceeds 1.1 billion certificates in 187 countries, with China leading the ranking with more than 328,000 certificates. In fact, certain certifications, have become an organisation's calling card in certain markets, without which it is not possible to enter them. 

Certification and inspection should not be seen as mutually exclusive but complementary. It is common for the market to demand certification from an organisation as an early sign of good performance in certain aspects (quality, environmental, etc.) and for the buyer, in particular, to demand that the goods he has purchased be inspected to meet factory, testing, integrity, identity and loading requirements. So is one activity redundant over the other? No.

 It is common for the inspection results of products manufactured by an organisation that is certified to be better, thus increasing customer confidence and allowing for less intensive inspection. Inspection is an activity that is partly part of certification. 

The certification process requires the verification and audit of the inspection activities that an organisation carries out during the manufacture of a product or the provision of a service. This is the reason why certified organisations are better prepared to pass an inspection than organisations that are not certified.

How to use Inteligencia Artificial (IA) to design the most suitable international logistics for a company?

TO USE CHATGPT TO DESIGN THE MOST SUITABLE INTERNATIONAL LOGISTICS FOR A COMPANY, FOLLOW THESE STEPS:

  1. Define the needs of the company: Start by understanding your company's specific needs in terms of international logistics. Consider factors such as the size and nature of your business, the products or services you offer and the destinations to which you wish to export or import.
  2. Enter your needs in the chat: Once you have a clear understanding of your business needs, you can start using ChatGPT to design an appropriate logistics strategy. Enter the needs into the chat and wait for the model to respond with specific recommendations.
  3. Analyse the answers: Carefully analyse ChatGPT's responses to determine if they are appropriate for your company's needs. If necessary, provide more information or ask additional questions for more details.
  4. Make adjustments as necessary: If necessary, make adjustments to the international logistics strategy recommended by ChatGPT to better adapt it to the specific needs of your company.
  5. Implement the strategy: Once you have finalised the international logistics strategy, implement the recommendations and follow up regularly to evaluate its effectiveness and make further adjustments as necessary.

APPLY THIS TIP TO YOUR PROJECT

TASK

INTERNATIONAL LOGISTICS CASE STUDY FOR A COMPANY IN AN ACCELERATION PROGRAMME USING CHATGPT

  • Identification of the company: Let's imagine we are working with a technology start-up in the accelerator programme. The company specialises in software development and has seen high demand in the international market.
  • Definition of needs: The company needs an international logistics strategy that allows it to export its software products to different countries. The company has a limited budget, so it is looking for a solution that is cost-effective but efficient in terms of delivery time and quality.
  • Enter the information in ChatGPT: We enter information about the company and its specific needs in the chat and wait for ChatGPT to provide us with recommendations.
  • ChatGPT Answers: 
    • ChatGPT provides us with several recommendations, such as: 
      • Use a third-party international shipping service to ship software products to different countries, as this can be more cost-effective than setting up your own logistics infrastructure.
      • Use a shipment tracking service to ensure that products arrive at their destination in a timely manner.
      • Research and comply with the customs regulations and requirements of destination countries to avoid delays and additional costs.
  • Adjustments and monitoring: We evaluate the recommendations provided by ChatGPT and make adjustments as necessary to adapt the international logistics strategy to the specific needs of the company. We then implement the strategy and regularly follow up to evaluate its effectiveness and make further adjustments as necessary.

In a nutshell, ChatGPT helps us design an appropriate and cost-effective international logistics strategy for the technology start-up in the accelerator programme, enabling it to expand its reach globally in a cost-effective and efficient manner.

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Jaime Cavero

Presidente de la Aceleradora mentorDay. Inversor en startups e impulsor de nuevas empresas a través de Dyrecto, DreaperB1 y mentorDay.
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