Transportation for International Trade

Three modes of transportation are available for exporting products overseas: air, water (ocean and inland), and land (rail and truck). Whereas inland water, rail, and truck are suitable for domestic transportation and movement of goods between neighboring countries (e.g., the United States to Canada, France to Germany), air and ocean transport are appropriate for long-distance transportation between countries that do not share a common boundary.

Export-import firms may use a combination of these methods to deliver merchandise in a timely and cost-efficient manner. The exporter should consider market location (geographi­cal proximity), speed (e.g., airfreight for perishables or products in urgent demand), and cost when determining the mode of transportation. Even though air carriers are more expensive, their cost may be offset by reduced packing, documentation, and inventory requirements. It is important to establish with the importer the destination of the goods, since the latter may wish the goods to be shipped into a free-trade zone that allows for exemption of import du­ties while the goods are in the zone.

Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.

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