What is Cross Trade?
Cross Trade, also known as Triangular Trade, Third Party Shipments, or Foreign-to-Foreign Shipments, is a transaction involving three parties in three different countries.
What are the Benefits of Cross Trade?
- Lower Supply Chain Costs
Cross trade eliminates bringing the goods to the seller’s country or location and all associated costs with it such as freight, duties, and taxes.
- Shorter Transit Time
Cross trade can cut down the time of travel, allowing greater cost savings
- Supply Chain Efficiency
Cross trade decentralizes the supply chain by placing production and stock closer to the final destination.
Important Considerations for Cross Trade Shipments
Incoterms are essential in international contracts. They tell the parties involved what to do with respect to the carriage of the goods from the seller to the buyer, in addition to explaining the division of costs and risks between the parties.
- Commercial and Shipping Documents:
International shipping transactions require proper commercial documents for customs clearance. These include a Commercial Invoice and other documents such as Certificates of Origin and Health Certificates.
- Trade Agreements
Remember to check the trade agreement between the origin and destination country to find out if you need any specific documents.