Time is money and so is transit

Transit and warehousing are two basic elements of international transportation that have to be taken into account seriously when a companies want to enter foreign trade. They are part of the customs suspending tax system established to ease clearance procedures. Customs transit and bounded warehousing are two customs systems created with the view of improving operations of logistics and strengthening the competitive situation of companies on international markets.

Generally speaking, transit defines all the means that allow a good to go through a special point (a pass, a port), changing the methods of transport if necessary. In this particular case, we are going to focus on customs transit which is used to facilitate the movement of goods between two points of a customs territory, via another customs territory, or between two or more different customs territories.

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2. PURPOSE : Time is money and so is transit. The main goal of customs transit is to go faster and faster, avoiding a waste of time and long clearance procedures. Because it is a temporary suspensive system, customs transit is a good formula to exempt goods from customs duties and other charges and plus provides a customs control over the goods that are being transited. Customs transit allows companies to clear its goods in the nearest clearance center, to avoid numerous offloadings at the frontiers and to limit complicated clearance procedures and paperwork.

To be part of this advantageous system, companies must offer a material guarantee, protecting the goods. To do so, they must ask the clearance centers to provide them with affixed customs seals. Companies must as well offer a finantial guarantee. Through this guarantee, customs authorities will make sure that the goods get to their destination point in the best conditions. Afterwards, companies can be paid back.

3. TYPES OF TRANSIT : The types of transit depend on the modes of transport and the countries crossed. Here are mainly concerned road and railway transports. The most important customs transit procedures are : International transit : It concerns the transit of goods, without any offloading, coming from or going to a non European country. Those same countries must be part of the 1975 Transport International Routier Convention1 which facilitates the movement of goods in international trade. Particular norms and obligations must be respected such as affixing customs seals, owning a TIR Carnet which will sum up all the countries crossed by the lorry, respecting types of trailers used, etc.

Community transit : It covers the movement of goods between two points within the European Community. It comprises two procedures : The External Community Transit Procedure T1 (i.e. a French consignee gets a good from a Canadian supplier. The good is shipped towards Rotterdam before being cleared in Paris, near the consignee’s premises) and the Internal Community Transit Procedure T2 (the good is from European origins and benefits from the 1993 free transit of goods and persons).  Common transit : This procedure applies to the movement of goods to, from, or between EFTA Countries (namely, Iceland, Norway, Switzerland and Liechtenstein, or Visegrad Countries (namely, Poland, Hungary, Czech Republic and Slovak Republic). The provisions are broadly in line with those of Community Transit.

Whatever the form can be (cold store, wharf), a warehouse is a place of storage and must adress an economic need. It allows companies to bond their goods after exporting and/or importing activities, in the best conditions. Goods can be stored for un unlimited period of time (imports) or for a two-year period of time (exports). Any kind of goods are accepted as long as they are not dangerous for national security and national morality (i.e. non hazardous goods). Alike the customs transit, we are going to deal with bounded warehousing in which duties are not paid until the goods leave the warehouse.