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Why is it crucial to control cargo rights in re-export trade? What are the consequences of not doing so?
Resolved
I'm new to re-export trade, and I've heard that controlling cargo rights is crucial in this type of trade. I'd like to ask everyone why it's necessary to control cargo rights in re-export trade? What risks might be faced if cargo rights are not controlled? I hope to get some professional insights to gain a clearer understanding of cargo control in re-export trade and proactively prevent risks.
Trade Expert Insights Answers
Controlling cargo rights is crucial in re-export trade. Firstly, re-export trade involves multiple parties and complex processes, and goods may need to be transshipped and stored in different ports. Controlling cargo rights ensures that goods flow according to the requirements of the trade contract, preventing incorrect or mistaken shipments.
Secondly, controlling cargo rights is key to protecting one's own interests. If market prices fluctuate, having control over the goods allows for flexible disposal, reducing losses. For instance, if market prices fall, one can choose to temporarily withhold delivery or resell to other buyers.
Furthermore, if cargo rights are not controlled, you might encounter fraud from suppliers or intermediaries, such as "empty orders" or non-conforming goods, while being unable to actually control and inspect the goods, leading to the loss of both goods and payment. In summary, controlling cargo rights is a necessary means for the smooth execution of re-export trade and the protection of one's own legitimate rights and interests.
If cargo rights are not controlled in re-export trade, goods might be arbitrarily disposed of. For example, goods could be resold to others by the supplier without your consent, while you remain unaware, only to find the goods are gone when it's time for delivery, resulting in substantial losses.
If cargo rights are not controlled, disputes might arise due to issues such as warehousing fees after the goods arrive at the transshipment port. If the consignor fails to pay and you lack control over the goods, the port might detain them, affecting subsequent transactions.
Re-export trade involves many stages; if cargo rights are not controlled, should goods be damaged or lost during transit, it would be difficult to clearly assign responsibility, and you might have to bear the losses alone.
Controlling cargo rights gives you more leverage in trade negotiations. If you don't control cargo rights, buyers might use this to drive down prices, knowing that your actual control over the goods is limited.
If cargo rights are not controlled, suppliers might delay delivery, disrupting your sales plan. Without control over the goods, it would be difficult for you to effectively urge them to deliver on time.
In re-export trade, controlling cargo rights ensures that goods quality meets requirements. If not controlled, by the time the goods reach the final buyer and are found to be substandard, you would have no way to control it at the source.
Without controlling cargo rights, when encountering changes in trade policies, such as a sudden imposition of tariffs at the destination port, you would be unable to promptly decide the goods' whereabouts, potentially leading to high tax burdens.
If cargo rights are not controlled, the delivery time of goods would be difficult to guarantee. Transshipment stages might be delayed for various reasons, and you would be unable to adjust in a timely manner.