Understanding international trade takes some time and research. Working with a freight forwarder, you are guaranteed a wealth of experience and knowledge to help you make the right choices for your business. But, we believe that any investment into the growth of your company should be backed with as much information as possible. So, in this blog, we’ll discuss the 3 different types of international trade – Export Trade, Import Trade and Entrepot Trade.
Export Trade
Export trade is when goods manufactured in a specific country are purchased by the residents of another country. It can also apply to services that are provided in one country and for the benefit of someone living in another country. In this transaction, the seller of the goods or service is known as the exporter. Here in the UK, the majority of our exported products include cars, turbo-jets, medication, gold and crude oil. In June 2021, exports from Britain were valued at £51.2 billion.
Import Trade
If we look at this transaction in reverse, we see import trade. This is where goods or services are brought into one country from another, where they were originally manufactured or created. Goods are normally imported when the country of origin does not have the demand for the goods. Or, where the manufacture of goods in one country is significantly lower than it would be in the receiving country. Goods can also be imported if they cannot be manufactured in the desired country – an example being the import of crude oil.
Entrepot Trade
Also known as transhipment, Entrepot Trade is where goods are imported into a country and then re-exported out, without being distributed within the importing country. For example, if metal is imported from India to Singapore, processed and then re-exported to China, it is entrepot trade. This form of trade is used for a number of reasons, including access to machinery, the development of technology and to help reinforce international relations.
Having a solid, basic knowledge of the workings of international trade ensures you’re informed enough to make the right business decisions. Here at Radius Warehouse and Logistic Services, we have over 25 years of experience offering excellent logistic solutions for worldwide cargo movements. To get started, request a quote or get in contact here today.
When it comes to international trade and logistics, I've got a treasure trove of firsthand expertise and in-depth knowledge. Let's delve into the concepts referenced in that article.
Export Trade: This type involves the sale of goods or services manufactured or produced in one country to residents or entities in another country. The seller of these goods or services is termed the exporter. The UK, for instance, exports various products such as cars, turbo-jets, medication, gold, and crude oil. This type of trade is pivotal for a country's economy and is often influenced by factors like demand, production capabilities, and market competitiveness.
Import Trade: In contrast to export trade, import trade involves the purchase of goods or services from a foreign country into the importing nation. This happens when there's a lack of domestic production, insufficient supply, or when the cost of manufacturing domestically is significantly higher than importing. An example is the import of crude oil into a country that lacks natural oil reserves.
Entrepot Trade: Also known as transhipment, this trade type involves the importation of goods into a country solely for the purpose of immediate re-exportation without undergoing any substantial change or distribution within the importing country. It's a strategic practice utilized for various reasons, including facilitating technological development, strengthening international relationships, or leveraging machinery or specialized capabilities available in the intermediate location. An instance could be importing metal from India into Singapore, processing it, and then re-exporting it to China.
Understanding these trade concepts is pivotal for businesses engaged in global commerce. They dictate decisions related to market entry, supply chain strategies, and economic viability. And as mentioned in the article, partnering with experienced freight forwarders or logistics services, like Radius Warehouse and Logistic Services with over 25 years of industry experience, can be invaluable in navigating the complexities of international trade and ensuring efficient cargo movements worldwide.
