Transit shipment

From CEOpedia | Management online

Transit shipment is a delivery operation which happens between two places which are not port of destination and port of origin. Transit is a common situation for land transport between a country without access to the sea and those that have access. For example, goods delivered from any seaport in Germany to Hungary, are crossing Austria or Czech Republic. That crossing is called transit shipment. Globalization has become more and more omnipresent - goods are ordered and delivered around the world. The only limitations are distances and costs of transport(Sarkar P. K., 2015, p.365-374).

Transit Procedure

Transit procedure is the result of the implementation of the assumptions of the European Union - it is the a delivery of goods without any customs barriers.

There are two types of transit:internal and external:

  • External transit of Non-Community goods - This is the transfer from one place to another within the areas of the community. All transported goods at that time are not subject to customs operations, fees or other commercial policy measures.
  • External transit of Community goods - This is the transfer from one place to another within the areas of the Community. Transport concerns the goods that are subject to export requirements to third countries and for which all customs formalities have been carried out.

There is possibility to use external transit procedures for transport through the third-country territory(Danz T. L., 2013, p. 3-10).

  • Internal Transit - Transport of Community goods from one place to another in the customs territory of the Community, through the territory of a third country, without changing customs status of the goods.

Goods are tranported from one point in a country to another country on the basis of the same customs document (transit declaration card), customs formalities are kept to a minimum. In the transit of goods, there is a possibility to change the means of transport, however, the division of the shipment or change of content is not allowed. A customs guarantee must be lodged in the transit procedure.

Trans-European Transport Network (TEN-T)

This is a European Union project which started in 1990 - it plans to build a network of rails, roads, airports and seaports around Europe(Johnson D., 1997, p.73). Core Network Corridors:

  • Baltic-Adriatic ( Poland - Italy)
  • North Sea - Baltic ( Estonia - Netherlands)
  • Mediterranean (Hungary - Spain)
  • Orient/East - Mediterranean (Germany - Bulgaria/Greece
  • Scandinavian - Mediterranean (Norway/Sweden - South Italy)
  • Rhine - Alpine (Netherlands - North Italy)
  • Atlantic (West Germany - Spain/Portugal)
  • North Sea - Mediterranean (Scotland - South France)
  • Rhine - Danube(West Germany - Romania)

Types of transport

There are five main types of transport:

  • Roads

Roads are modified on a regular basis in accordance with the changing demand. This project aims to improve the transport infrastructure of the European Union, to connect remote areas, good connections with other modes of transport and to build bypasses of central European cities . In addition, the road infrastructure is to be modern, safe and open to everyone.

  • Railways and Trains

It is divided for high speed rail network and conventional one: Its most important role is long distance passanger transport and freight transport, about 250 million tons of goods were transported in Poland in 2018

  • Airports

There are three categories of airports:

  • International connecting points with annual freight transport above 150000 tones
  • Community connecting points with annual freight transport between 50000 and 150000 tones
  • Regional connecting points with annual freight transport less than 50000 tones
  • Seaports

Similar to Airports there are three types of seaports:

  • International connecting points with annual freight transport above 1,5 milion tones
  • Community connecting points with annual freight transport between 0, 5 to 1,5 milion tones
  • Regional connecting points with annual freight transport less than 0,5 miion tones
  • Inland ports and waterways

Each inland port must meet specific requirements so that it can serve ships as well as passenger traffic. Land shipping is the least known mean of transport, but very popular when it comes to freight shipping . An example of Inland waterway is Duna river.

Examples of Transit shipment

  • Air freight transit shipment: This type of transit shipment is used for international delivery of goods. Air freight transit shipment is usually used for urgent deliveries as air freight is the fastest mode of transport. For example, a company in the US might need to send urgent documents to a client in India. They would arrange for an air freight transit shipment to ensure that the documents reach the client as quickly as possible.
  • Rail freight transit shipment: Rail freight transit shipment is used to transport large quantities of goods over long distances. This type of transit shipment is often used to transport bulky and heavy items that cannot be transported by air. For example, a manufacturing company in the US might need to transport large quantities of raw materials to its factory in Canada. They would arrange for a rail freight transit shipment to move the materials safely and quickly.
  • Sea freight transit shipment: Sea freight transit shipment is used for international deliveries of large shipments. This type of transit shipment is often used for large, bulky items that need to be transported over long distances. For example, a furniture store in the US might need to deliver a large order of furniture to a client in the UK. They would arrange for a sea freight transit shipment to ensure that the furniture is delivered safely and on time.

Advantages of Transit shipment

A transit shipment has many advantages, including:

  • Increased efficiency - due to the direct route of transit shipment, goods are able to reach their destination faster, with fewer stops and delays.
  • Cost savings - transit shipments have lower costs associated with them, since they don’t require multiple shipments, and they don’t require additional fees or taxes associated with international shipping.
  • Reduced paperwork - with transit shipments, paperwork is minimized since only one set of documents needs to be completed.
  • Improved security - transit shipments have higher security standards, making them a more reliable option for transporting goods.
  • Increased visibility - with transit shipments, customers are able to track their shipments more efficiently, allowing for better customer service.

Limitations of Transit shipment

  • One of the main limitations of transit shipment is cost. Shipping goods over long distances can be expensive due to the cost of fuel, maintenance and labor. Additionally, the cost of transit ship can often be prohibitive for smaller businesses.
  • Another limitation of transit shipment is time. Transit shipments can take weeks or even months to reach their destination, depending on the distance and complexity of the route. This can be a disadvantage for businesses that need their goods quickly.
  • A third limitation of transit shipment is reliability. Many transit shipments are prone to delays or unexpected problems which can cause delays and cost businesses money. Furthermore, transit shipments may go through areas that are unstable or prone to theft, which can further add to the time and cost of transit shipment.
  • Finally, transit shipments can be subject to customs regulations and taxes, which can further add to the cost and complexity of transit shipments. This can make it difficult for businesses to accurately plan and budget for transit shipments.

Other approaches related to Transit shipment

To better understand transit shipment, it is important to consider the following approaches:

  • Logistics Management: Logistics management involves the planning, implementation, and control of the efficient flow of goods and services from point of origin to point of consumption. It includes all the activities required to ensure the timely, cost-effective, and secure delivery of goods to customers.
  • Warehousing: Warehousing is an important part of transit shipment. It involves the storage of goods in a secure facility for a specified period of time. This can include the unloading, loading, and storage of goods, as well as the tracking and management of inventory.
  • Transportation: Transportation is the process of moving goods from one location to another. This can include trucking, rail, air, and ocean shipments. It is important to ensure that goods are shipped safely and securely and arrive on time.
  • Distribution: Distribution involves the delivery of goods to their final destination. This includes ensuring that goods are properly packaged, labeled, and shipped to the right destination.

In conclusion, transit shipment is a complex process that involves several activities, such as logistics management, warehousing, transportation, and distribution. These activities must be managed carefully and efficiently to ensure that goods arrive safely and on time.


Transit shipment — recommended articles
Outbound logistics — Direct delivery — Door to door service — Break bulk cargo — Accessorial charges — Multimodal transport system — Bonded warehouse — Freight carrier — Transloading

References

Author: Angelika Zając

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