Frequently asked questions about freight transport

The documents required for land freight transport are as follows:

• CMR (Convention Relative au Contrat de Transport International de Marchandises par la Route). This document confirms the existence of an international road transport contract. It indicates the freight type, its origin, destination, the carrier, shipper and addressee. It is also a receipt for the consignor proving that they have delivered the goods to the carrier.
• ADR document: When transporting dangerous goods, this document specifies the type of goods carried, their classification and UN number and the measures that must be taken for their transportation and handling.

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Road freight transport is governed by the Law on Land Transport (Ley de Ordenación de Transportes Terrestres, LOTT), and by the Regulation on Land Transport (Reglamento de Ordenación de los Transportes Terrestres, ROTT), which develops the subject in greater depth. These documents provide regulations for transport companies and for companies related to their activity, meaning that it is important to know them. In this link you will find the complete set of regulations affecting this kind of activity, including special road transport.

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• Delayed shipment: The most common causes of delay are inefficient management of port times and formalities. Other variables may also affect the shipment, such as circumstances of force majeure, like a storm for instance, or, in some parts of the world, the risk of a pirate attack.
• Lost goods: While this represents a very low risk today, it can occur in the event of problems such as the boat sinking or breaking down, as well as due to robbery or theft in ports of loading and destination in countries with high levels of corruption.
• Moisture, humidity or extreme temperatures:Environmental conditions must be perfectly controlled to prevent the cargo from being rendered unusable due to moisture, humidity or extreme heat or cold. All cargo must therefore be transported in containers suited to their particular characteristics and checked to ensure that they are properly closed. They must also be correctly loaded, unloaded and stored.
• Contamination: Interaction between different goods can ruin them. The goods must therefore be well packaged and properly stowed in the hold to prevent their contamination.
• Natural disasters: Natural disasters are becoming more frequent and serious in recent years; this represents the most unpredictable risk on the list.
• Computer threats: This is one of the new risks of international maritime transport since the famous NotPeya attack suffered by Maersk. Companies and ports are therefore currently working on logistics cybersecurity.

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We can distinguish between different kinds of ships for maritime transport, depending on the load they transport:

• • General freighters:These are basic cargo ships; they can carry freight, but have no space for containers.
  • Container ships: Ships specially designed to carry goods in containers. They monopolize the majority of international dry freight transport and represent more than a half of all maritime trade.
  • Bulk carriers: The vessels best suited to transporting solid bulk cargoes.
  • Oil/gas tankers: Special tankers for transporting crude oil and by-products differentiated by their superior technical characteristics; all of them guarantee water tightness and structural resistance. Gas tankers have more sophisticated technology for storing liquefied gas and are divided into carriers of GNL and GLP, given that each one needs to be kept at a different pressure and temperature.
  • Reefer ships: Transport perishable food and commodities which must generally be preserved at very low temperatures
  • Ro-Ro ships: Have ramps and platforms for transporting vehicles with wheels, from private cars to industrial vehicles and loaded trucks. There are also hybrid versions of these ships which combine vehicle and passengers transport (ferries) and others that transport vehicles carrying containers (Ro-Lo)

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Oil tankers are purpose-built ships designed to transport crude oil or petroleum products. They have a pumping system that enables them to load and unload crude oil. Oil tankers are the only alternative to pipelines for transporting oil from the rigs to the ports for their onward travel from there to the refineries.

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We can distinguish between three types of ships dedicated to transporting chemical products. These are classified, depending on the severity of the environmental and safety hazards entailed by their cargo, into Type 1, 2 or 3, although the tendency is to build them to transport all 3 types.

• • • Type 1: Transport cargo representing the greatest risk, and are therefore equipped with the highest preventive measures, such as independent rather than structural tanks; they also have a lower capacity, around 1,250m3.
    • Type 2: Transport dangerous goods representing a lower risk, meaning that they are highly equipped to prevent leakage, but can carry a greater capacity: almost 3,000m3.
    • Type 3: Transport freight representing the lowest risk of all three when still referring to dangerous or IMO goods.

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Los buques graneleros o bulk carriers son los más apropiados para transportar cargas sólidas de granel. Es decir, carga en pequeñas unidades sueltas o desmenuzadas, tales como granos, cementos o minerales. Sus características técnicas son:

• • • Up to 200,000 DWT.
    • Single deck.
    • Double bottom.
    • Wing tanks.
    • Double or single skin.
    • With or without self unlounders.
    • Spacious watertight holds fitted with hatches.
    • Grab cranes for loading and unloading.

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The different bulk carriers can be classified according to their size:

• • • Handies: These include the HandySize and the HandyMax, and are the most common kinds. They have a DWT of between 10,000 and 50,000 and their relatively small size means that they can enter any port.
    • Panamax: Have a DWT of between 50,000 and 80,000 with a maximum beam length of 32.2m. These are bigger ships, just the right size for making their way through the Panama Canal, hence their name.
    • CapeSize: These are bulk carriers with a DWT of more than 80,000 and are the ones which circulate in the lowest numbers. They are too big to sail through the Panama or Suez Canals and must therefore travel round the Capes of Good Hope and Horn.

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The size of a general cargo or multi-purpose ship varies greatly, although they tend to be rather small according to freight carrier standards. They are generally between 5,000 and 25,000 DWT.

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An average sized oil tanker can carry some 735,294 barrels. We must remember that the reference when talking about barrels of crude oil or petroleum is generally the 42-gallon unit (approximately 159 litres).

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Ro-Ro ships are vessels designed to transport vehicles on wheels, i.e. cars, trucks or industrial vehicles.

Sometimes they have built-in ramps for the loading and unloading of vehicles.

The fact that the cargo can access the ship under its own steam removes the need for a crane, thus reducing the intermediary costs related to loading, unloading and stowage.

These ships can only carry wheeled vehicles and mustn’t be confused with Ro-Pax vessels, like ferries, which combine the transport of vehicles and passengers.

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• • • Ro-Ro: These are ships for general wheeled cargo (cars, other vehicles, machinery on wheels, etc.).
    • Car carriers: Only transport cars and are perfectly prepared for this purpose.
    • Ro-Pax: Combine wheeled cargo with passenger transport. Ships carrying more than 12 passengers are considered to be Ro-Pax vessels.

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To transport wheeled cargo, such as all kinds of vehicles and machinery with wheels. The cargo can be loaded using the ramp, with no need for cranes or intermediaries, thereby making for lower costs and risks.

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Vessels designed to transport crude oil or petroleum products. They have a double-hull to keep potential damage to a minimum and prevent spills caused by collision or running aground. Apart from transport by pipeline, oil tankers are the only way to transport large quantities of crude oil.

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Vessels used to transport chemical substances. They have several tank compartments enabling them to carry different kinds of substances. They are classified, according to the risk of the cargo they transport, into three categories (Type 1, 2 and 3) referring to the way the vessel is built to guarantee safe transport.

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Vessels designed to transport freight in containers. They monopolize the majority of international dry cargo transport and represent more than half of all maritime trade. They are intended to transport standard containers according to ISO regulations.

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Vessels that transport perishable foodstuffs and commodities requiring special conditions during the voyage, such as fruit, vegetables or certain pharmaceutical products. Here we refer to goods requiring temperature-controlled transportation, and which must specifically be kept at very low temperatures. Vessels of this kind generally have from three to five holds.

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Ro-Ro or roll-on/roll off ships are vessels designed to transport vehicles on wheels. They are equipped with ramps and platforms to secure private cars, industrial vehicles or even trucks loaded with freight for long-distance journeys. There are also hybrid versions of these ships, combining vehicle and passengers transport (ferries), and others which transport container vehicles (Ro-Lo).

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A ship agent is an independent shipping agent who acts on behalf of the ship owner. Ship agents are responsible for a ship when it comes into port and conduct all of the procedures required to streamline its dock time in order to reduce the cost of the operation.

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A maritime charter is calculated at the market price. Said price varies depending on the availability of ocean transport in the area in question and whether or not their owners need to take their vessels from one place to another. By way of an example, bringing goods from China is much cheaper than it is to take them there. This is because shipowners are in high demand for bringing cargo from China to Europe, while it is more complicated to find freight to transport back out to China given the existing trade imbalance. Another variable with a strong influence is the oil price at the moment of travelling.

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Chartering refers to the international transport contract and its price. It is the cost associated to transporting freight and will depend on several factors, such as the volume of the cargo, the rate charged by the shipper and any additional costs involved in the transportation of dangerous goods.

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They are two different ways of transporting freight by air:

• • • When using a courier service your goods won’t be considered as freight, but as a postal package. This is an ideal option for small, lightweight parcels requiring urgent transport. However, courier companies don’t provide an integral logistics service covering aspects like customs clearance, meaning that you may find yourself faced with delays or surcharges.
    • On the other hand, air freight sent by means of a logistics or forwarding company will guarantee greater security for your operation since its professional team will take care of all necessary details.

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An air charter service is calculated based on the volume of the goods transported. However, it is strongly influenced by the availability of physical means (transport) on your desired route. By way of an example, bringing goods from China is much cheaper than it is to take them there. This is because shipowners are in high demand for bringing cargo from China to Europe, while it is more complicated to find freight to transport back out to China given the existing trade imbalance. Another variable with a strong influence is the oil price at the moment of travelling.

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• • • Air Waybill (AWB): This is the document of title to the goods travelling by air and is therefore non-negotiable. It travels with the cargo and acts as evidence of delivery of the goods travelling on board the plane.
    • Commercial invoice: Document establishing the conditions of sale for the goods and their specifications. Serves as proof of sale.
    • Packing list: A list of the contents in a package, completing the information of the invoice, which must be issued by the sender.
    • Customs clearance authorisation: Document with which an importer or exporter authorises a customs agent to submit one or several customs declarations on their behalf.

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The price of air transport for a cargo. Although it is calculated based on the volume of the goods, the cost of chartering is strongly influenced by variables such as the availability of physical means (of transport) on the desired route or the price of fuel at the moment in question.

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Multimodal transport consists of carrying a single cargo by different modes of transport (air, land, ocean…) using Intermodal Transport Units (ITU) such as containers, semi-trailers or swap bodies (interchangeable containers).

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For the purposes of duty and tax, we have two different kinds of warehouse, the CW and the WAOC:

• • • Customs Warehouse (CW): This is a space where goods can be stored for an unlimited period of time, during which duty and tax payments are suspended. Goods will only become liable for duty and tax when they leave the premises again. It is an excellent option for companies with a medium-low inventory turnover, but who need to have stock on hand.
    • Warehouse Authorisation Others than Customs (WAOC): Also known as a tax warehouse, this is another place where goods can be kept for an unlimited time, offering advantageous conditions for the storage of goods imported within the EU, with no need to pay VAT in advance.

These terms mustn’t be confused with the concept of storage in a free warehouse or open-air warehouse, since both can function as a CW and WAOC.

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A free warehouse is a place providing storage space for goods, as well as other services related to their handling, maintenance and safety. It is intended for all kinds of imports and exports and offers tax benefits. Cargoes deposited here are not liable for import duties or tax and, for the purposes of customs regulations, are not considered to exist on Community territory.

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A customs warehouse (CW) is a warehouse that offers certain tax benefits for goods. It is a place where goods coming from outside the EU can be stored indefinitely, without having to pay tax. The customs warehouse therefore means that the VAT due on imports can be deferred, as well as any corresponding duty, until the goods leave the warehouse again.

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A forwarding agent or forwarder is an agent who acts on behalf of importers and exporters to organise safe and economical goods transport. Among their many tasks, the most common are facilitating transport, selecting the most efficient route, taking out insurance policies, choosing the appropriate packaging depending on the cargo and taking care of its storage and/or distribution.

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A forwarding agent or forwarder is a transport operator. They act on behalf and in favour of importers and exporters, organising safe, efficient and economical goods transport. In other words, a professional expert at your disposal for the purposes of hiring transport, selecting the most efficient route, taking out insurance policies, choosing the appropriate packaging and taking care of storage where required.

A customs agent is responsible for managing all customs duties and documents required by the tax administration in every country for the traffic of goods between states. Their importance lies in knowing the legal regulations in order to satisfy the tax authorities and avoid last-minute surprises such as tax duties or surcharges.

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The main kinds of customs control according to the route and jurisdiction are as follows:

• • • Land customs: Are found at the borders between countries, where they deal with heavy goods transport, private cars and even people who cross on foot in the case of city border points. Their functions are to check that the documentation matches the articles transported.
    • Air customs: Are located at international airports and deal with the highest flow of human transit. Imported and exported goods arriving at an airport are checked by customs on arrival, and subsequently by customs at the place of their destination
    • Maritime customs: This kind of customs deals with the vast amount of goods travelling between countries geographically very distant from one another. Here the goods are generally of great weight or size, such as vehicles or industrial machinery. Maritime customs are responsible for verifying the goods entering and leaving, as well as their documentation.

On the other hand, depending on their function, customs controls can be classified as:

• • • Customs at the port of entry: Which deal with goods to be declared for national consumption.
    • Customs at the point of destination: Receive goods or products sent. At this point the goods are no longer considered as being in transit and become liable for tax.
    • Border customs: These are customs which neither receive nor issue goods, but which control goods in transit, often when travelling from their country of origin to that of their destination.

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Customs control the movement of goods between different states in three steps:

• • 1. Customs declaration: Must be presented to the customs authority in order to identify the goods to be transported and their destination.
    2. Goods inspection by the customs agents, to check that they match the declaration.
    3. Verification that trade policy norms have been met and amounts due have been paid (import and export duties).

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The role of customs control is to regulate and inspect shipments in order to guarantee that commercial exchanges between different countries proceed legally, that they comply with all tax and duty obligations and with all other requirements related to their entry or exit.

As well as guaranteeing compliance with international trade rules, collecting taxes and duties due where appropriate, customs controls are a fundamental mechanism for preventing money laundering, tax fraud and drug trafficking.

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The management of all formalities required by the customs authorities. It is important for these formalities to run smoothly and trouble-free in order to prevent delays due to bureaucratic issues. These formalities are therefore usually entrusted to a customs agent who will carry them out on behalf of the freight owner.

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All formalities and requirements to be completed for goods entering and leaving a specific national territory in order to control and approve their transportation. The customs agent is responsible for completing these formalities on behalf of the importer or exporter, and for submitting a declaration of information to the competent customs authority in each case.

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Customs clearance means that the customs procedure has been completed, i.e. that all of the paperwork has been submitted and that the shipment can continue on its way.

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Dangerous goods are classified according to the ADR (European Agreement concerning the International Carriage of Dangerous Goods by Road), as follows:

• • • Class 1: Explosive substances and articles
    • Class 2: Gases
    • Class 3: Flammable liquids
    • Class 4.1: Flammable solids
    • Class 4.2: Substances liable to spontaneous combustion
    • Class 4.3: Substances which, in contact with water, emit flammable gases
    • Class 5.1: Oxidizing substances
    • Class 5.2: Organic peroxides
    • Class 6.1: Toxic substances
    • Class 6.2: Infectious substances
    • Class 7: Radioactive materials
    • Class 8: Corrosive substances
    • Class 9: Miscellaneous dangerous substances and articles

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There are different regulations on dangerous substances.

The road transport regulation is the ADR (European Agreement concerning the International Carriage of Dangerous Goods by Road), an agreement including 32 EU countries.

The carriage of dangerous goods by rail is governed by the RID.

For the ocean carriage of dangerous goods, the IMDG (International Maritime Dangerous Goods) code applies. Here such cargoes are also known as IMO goods due to the fact that the International Maritime Organisation is the authority in the matter.

Finally, the ICAO provides the regulation for the air transport of dangerous goods.

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This is a practice whereby the cargoes of one or several shippers are bundled together for transport under a single transport document. It is also known as groupage when different cargoes are combined to fill a single container.

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IMO is the name given to dangerous goods in maritime transport. It takes its name from the International Maritime Organisation, the body responsible for classifying these kinds of hazardous freight.

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The ADR (Agreement on Dangerous Goods) concerns the land transport of dangerous goods. It is the European agreement that classifies these dangerous goods and provides the regulations for their transportation.

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