Is There a Shocking Scam in Export Trade? You Might Have Been Engaged in Entrepôt Trade!

Mr. Zhang has been running a foreign - trade company for many years, but recently he almost got into big trouble because of an "export" order. It turns out that the ordinary export trade he thought it was actually involved complex entrepôt trade processes. Thismakes people think: In the era of globalized trade today, do we really understand every link in the trade chain?

Export trade refers to the business behavior in which an enterprise in one country directly sells and transports goods to another country. This mode has the following typical characteristics:

• The buyer and the seller are from different countries
• The goods are directly transported from the exporting country to the importing country
• The transaction process is relatively transparent and simple

Key Note: According to the research data of Zhongshitong, in 2022, the total value of China's export trade reached 3.59 trillion US dollars, accounting for 14.7% of the global trade volume.

Unlike direct exports, entrepôt trade refers to the trade form in which goods are transported from the producing country to a third country, and then resold from the third country to the final consuming country. Ms. Li once encountered such a situation:

• Her company purchased clothing from Vietnam
• The goods were first transported to Singapore
• After being repackaged in Singapore, they were sent to the United States

Although this trade mode adds logistics links, it may bring advantages such as tariff preferences and avoidance of trade barriers.

To distinguish between these two trade modes, the key is to look at three points:

• Whether the goods transit through a third country
• Whether the trade entity changes
• Whether there is a middleman mark - up link

For example, the case analysis of Zhongshitong in 2023 shows that about 38% of enterprises were initially unclear about which type of trade they were involved in.

Whether it is export or entrepôt trade, special attention should be paid to:

• The authenticity of the certificate of origin
• The customs supervision requirements of the transit country
• The import policies of the final destination country

Key Note: In 2022, the number of fine cases caused by misidentification of trade types globally increased by 21% year - on - year.

Enterprises are advised to consider from the following dimensions:

• Product characteristics: Perishable goods are not suitable for multi - link transshipment
• Cost accounting: Including time cost and capital occupation
• Policy environment: Pay attention to trade agreements of various countries

The survey of Zhongshitong shows that a reasonable choice of trade mode can save enterprises an average of 12 - 15% of operating costs.

In the context of the reconstruction of the global supply chain, relying solely on the traditional export mode may no longer meet the development needs of enterprises. Understanding the operation mechanism of entrepôt trade may open a new door for your business. Might as well think: For your next order, can you consider a more flexible trade method? Welcome to share your insights in the comment section.