International shipments allow your business to thrive, delving into new markets and expanding your audience base. Cross trade is one sector of worldwide cargo shipment and one that many are turning to as a means to improve their logistics too. Freight forwarders step in here with their wealth of experience and knowledge in the trade to help you create a smooth, straightforward and reliable line from the warehouse through to the end customer. In this guide, we’ll explain what cross trading is and the reasons why it may be a viable option for your business too.

What Is Cross Trade?

Cross trade refers to the movement of goods between two countries where the seller is physically located in a third country. For example, if your goods are manufactured in the USA, you regularly receive orders from Belgium but you actually live in the UK. Cross trade is the management of these shipments so that the goods never have to physically pass through your country before the trade is completed. They are also known as triangle shipments or third-party shipments.

To make the process as seamless as possible, many people opt for the support of a freight forwarder. These professionals manage the movement of goods, taking care of everything including the completion of export documents and arranging for customs clearance. This frees up your time and takes advantage of the experience they have in the field to build a reinforced and reliable logistics strategy for your sales process.

What Are the Benefits to Your Business?

We’ve written a shorter blog post about cross-trade here with a number of benefits you can expect. But let’s take a look into the ways these can be beneficial specifically to your business.

Reduced Delivery Times

Research shows that 68% of consumers will pay more for a product if the business is known to offer good customer service while 89% will make a second purchase because of it. However, 72.5% of consumers also reported that a poor delivery service would likely result in them not recommending a business to a friend. The importance of being the best within your market right now has, perhaps, never been so important. 2020 saw a significant increase in activity with online businesses and eCommerce became the shopping avenue of choice. Competition has significantly increased and therefore, so should the service you offer your customers as a result.

Cross trade shipments, managed by a reliable freight forwarding company, are an effective way to reduce the delivery lead times for international shipments.

Reduced Supply Chain Costs

International shipment is a significant investment for any business but especially for those that focus on online, eCommerce sales. You need to take into account storage costs for additional goods, transportation costs, procurement costs, inventory costs etc. Right now, many businesses have spent the past 18-24 months struggling to make a profit and, in order to stay afloat, this needs to happen swiftly. While there is an initial cost in the organisation and set-up of cross trade logistics, the support of a freight forwarder eliminates a significant proportion of the stress involved. And, once it has been set up, you reduce certain costs such as inventory storage fees and additional transportation costs too.

Improved Supply Chain Efficiency

By eliminating a single step in the cargo movement journey, you reduce the risk of further delays or disruption. In all, this improves the entire supply chain and increases efficiency. In some instances, having a three-way shipping structure will mean that the manufacturing location is closer to the end customers. So, the customer benefits from a shorter delivery time, fewer opportunities for damage or loss and an overall better experience all around.

Things to Consider

If cross trading fits in well with your business model, it always pays to work with an official Freight Forwarder who can provide advice and guidance to help. However, externally, there are a few things you can prepare for and consider to make the process as straightforward as possible.

1. International Trade Agreement

You may have a comprehensive understanding of the trade agreements between your home country and the end destination. But, do you know the relevant agreements between your manufacturing country and the end country? If not, you may come into complications due to a lack of appropriate paperwork or documentation.

2. Incoterm Contracts

These internationally recognised trade terms set out the arrangements for the delivery of goods to and from different countries. They detail the exact actions that should be taken with each shipment alongside who is responsible for the payment or costs and who takes ownership of different risks too.

How Does a Freight Forwarder Help?

Consider a freight forwarder as your right-hand support when it comes to shipping internationally. As industry specialists, they bring with them a wealth of contacts and experience in their trade to help you get the best deals with every single shipment. Here at Radius Warehouse & Logistic Services, we have the experience needed to support cross trading, as well as a specific specialism in USA and Far East inbound and outbound movements. We have a team of highly skilled professionals who can support you in getting your goods from a specific country to the end customer in the smoothest and most streamlined manner.

Is Cross Trade Right for Your Business?

When considering whether cross trade is the right choice for the business, consider things such as:

• Where is your product manufactured?
• Do you have the logistical structure to support shipments to you and then on to the end customer?
• How is the customer service experience you’re able to offer your customers currently? Could it be improved?
• Do you have the specialist support needed to ensure a triangle trade structure would work for your business?

With the experience and structure to help your business thrive, Radius Warehouse & Logistics is here to help improve your international shipping experience. If you would like more information about cross trade shipments, want to request a quote or need to speak to a member of the team, please do get in contact here today.