Transit and warehousing are two basic elements of international transportation.

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 Convention 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.

2. WAREHOUSING :

4. DEFINITION AND OBJECTIVES :

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.

The objectives of good warehousing are multiple :

• To protect goods from damage and prevent them from being lost and stolen.
• To keep an up-dated record of items.
• To ensure a steady supply and issue goods quickly and efficiently to users.

5. TYPES OF WHAREHOUSES :

Bounded warehouses are under customs cover and must be created with the view of storing. Two types of warehouses can be found:

• Public warehouse : it can be used by a warehousekeeper or owned by a warehouseman. These two are liable, separately, if any matter appears. In France, they are in the hands of haulier companies, the Chamber of Commerce and customs brokers.
• Private warehouse : in that case, the warehousekeeper and the warehouseman are the same person and are liable if any problems arise.

Public warehouse and private warehouse are of various forms (a,b,f,c,d,e), all the more complicated and with different procedures each.

6. ADVANTAGES OF THE SYSTEM :

The reasons for storage are various from a general, as well as an importing/exporting point of view. Materials should be available in stock at the time and place they are required to:

• Create de buffer stock (stock can be bought from a supplier in large, convenient or economic quantities)
• Create a safety stock because deliveries may be sometimes uncertain and demand unpredictable. It is a good way of ensuring that stocks will be available for users as  they need it.
• Store seasonal stock for commodities or other supplies received in bulk but issued usually over a short period of time.

A strategic stock can be set up for importing or exporting :

• When importing, goods are not dutiable until there are used on the national market. It means for example that an importing company can ease its cash flow and differ the payment.
• When exporting, even if the goods are still in the premises and have not moved yet, goods are considered as exported and so net of VAT. For instance, goods can be stored in France, they will not bear the VAT  cost, invoices for goods sold abroad will be charged net of VAT, etc. It is as well advantageous for example when company A wants to deliver from time to time to company B and that its production capacity is big. In that case, a warehouse allows company A to clear off its premises while satisfying at the same time company B.

Transit and warehousing are two customs systems that are all the more interesting for companies that want to develop itself abroad, getting at the same time steady clients, to control their cash flow or want less and less complications in terms of clearance.  

SOURCES

 

1. BOOKS :

• L’anglais Economique et Commercial, Business and Economics, Langue Pour Tous, Michel Marcheteau, 5° Edition Revue et Corrigée, Pocket, 1997, Paris, 604 pages.
• Guide Pratique du Commerce International, Sylvie Graumann-Yettou, 4° Edition, Litec, 1997, Paris, 331 pages.
• Commerce International, Techniques et Management des Operations, BREAL, 1998, Paris, 415 pages.

2. THE INTERNET :

• www.eur-export.com/francais/apptheo/ logistique/douane/transit.htm

APPENDIX

1. THE T.I.R. SYSTEM CONVENTION …………………………………………………………………………………P.8
2. T.I.R OPERATIONS ……………………………………………………………………………………………………………P.9
3. TYPES OF WAREHOUSES …………………………………………………………………………………………..P.10
4. WAREHOUSING CHART ………………………………………………………………………………………………P.11

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