If within Brazil there is already a whole set of requirements to meet before you can operate your carrier, imagine everything that needs to be looked at before you start working in international road cargo transport!
There are legal, tax, and even logistics issues that need to be thought through in advance so your business doesn’t stumble when expanding into new territory.
That’s why, in today’s article, you’ll find 5 points that can’t be left out of your plan to become a multinational. Read on!
1. Pay attention to insurance
Your insurance coverage needs to match your activity, whether in international road cargo transport, air, or any other mode. After all, your cargo won’t be within your reach if something goes wrong.
Before the vehicle leaves the yard, you need to check whether your truck will be covered in the event of a collision. If it isn’t, this is the time to switch insurers to make sure the losses don’t come out of your cash flow.
It’s also important to understand what to do if problems arise during international cargo transport. Do you need to contact the insurer in your country or in the territory where the incident occurred? Is there an option to report the incident in Portuguese? Make sure your employees have all these processes clear before starting cross-border activities.
Still on insurance, it’s also worth checking whether the coverage you’ve taken out is comprehensive (i.e., offers full protection against any eventuality), partial, or damage-only. It’s important to make sure cargo theft is included in the policy, since, depending on the country, the roads used for international cargo transport may not be all that safe.
2. Security in international cargo transport
And speaking of security, this is another topic that needs careful study before you start your international cargo transport activities. After all, even with insurance, you have to pay deductibles every time you need to claim, and if that happens repeatedly, a lack of security can compromise the profitability of the operation.
So prepare with as much information as possible: get to know the territory you intend to travel through, the main routes, which ones are the most dangerous, and the cargo theft rates in each region of the foreign country.
Another point is that a lack of security can directly affect the choice of the right mode. If international road cargo transport becomes practically unfeasible because of the risk factor, then opting for air transport (which would probably be more expensive) may end up being the only option.
So your challenge is to make operations abroad financially viable, calculating the risks and the costs associated with them.
3. Know the documentation required to operate
Working in international cargo transport is a challenge even for those already experienced in the Brazilian market. That’s because the laws and requirements are completely new to every member of your team involved in the operations.
So before operations begin, you need to have done an in-depth study of the obligations to be met in each country your carrier intends to travel through. It’s also a good idea to create a manual on how to issue each of the new documents that become necessary, to guide your employees.
To operate in international road cargo transport within Mercosur, for example, the Carrier’s Civil Liability Insurance for International Travel (RCTR-VI) is required. This is a guarantee for companies that accidents occurring in the bloc’s countries are covered.
Just as this requirement exists in Mercosur, the same is true in several other territories. So it’s essential to check a few points:
- Which documents need to be issued?
- How are they issued (at which agency, how long does it take, what must be presented, etc.)?
- What is the procedure for presenting documentation to the Federal Revenue Service for cargo release?
The clearer this information is, the fewer errors and problems you’ll run into along the way, until the carrier gets used to operating internationally.
4. Cargo management can’t stop
Just as in Brazil, when your carrier is working in international cargo transport you’ll also need to ensure full management of the goods.
This involves several factors, such as unloading stations, appropriate packaging, fuel purchases, cargo storage locations, and more. Can you see what’s behind all of them? Suppliers!
To make cargo management abroad as smooth as possible, research the market thoroughly to find good suppliers who are reliable and offer a balanced cost-benefit ratio. That makes it much easier to have peace of mind serving demand in another country, knowing everything is running well.
Another important point is to ensure cargo tracking along the entire route. When choosing a tracking method for your cargo, make sure it’s one that also allows monitoring in foreign territory, such as a GPS-based method, for example.
5. Keep an eye on tax matters
Working in international cargo transport, road or otherwise, also affects your company’s tax matters. So ideally your finance team should be informed and prepared to handle the demands arising from operations in other countries.
First of all, the contract needs to state in which currency the service will be paid. More than that, what will determine the exchange rate between currencies, i.e., which official source your company will use to calculate charges for services in foreign currencies. And how will money be received in another territory? All these details need an answer.
The second point to watch is tax payments. After all, different countries charge different taxes on goods, so it’s important to check your company’s obligations so you always operate within the law.
Finally, it’s also important to understand how receiving foreign currency affects your company’s reporting to the Federal Revenue Service. Is it possible to reduce costs legally? How? All of this needs to be looked at so that the amounts paid in taxes don’t end up making your international cargo transport unfeasible.
