Its mission is to facilitate trade and economic cooperation among its members by eliminating trade barriers and promoting policies that drive economic growth in the region. To achieve these goals, the organization relies on agreements and treaties aimed at trade liberalization, harmonization of policies and regulations, and the promotion of investments.

One of ALADI’s key instruments is the 1980 Treaty of Montevideo, which laid the foundations for economic integration in the region and established an institutional framework for the organization. Additionally, ALADI also administers a series of preferential tariff agreements among its members aimed at reducing import tariffs between participating countries.

ALADI plays an important role in promoting intra-regional trade in Latin America and the Caribbean, helping to strengthen economic ties among member countries and drive economic and social development in the region. Furthermore, the organization seeks to promote cooperation in areas such as agriculture, industry, technology, and the environment, with a focus on sustainable development.

ALADI promotes the creation of an economic preference area in the region, aiming for a common Latin American market through three mechanisms:

• Regional tariff preference, applied to products originating from member countries compared to tariffs in force for third countries;
• Regional scope agreements (common to all member countries); and
• Partial scope agreements, involving two or more countries in the area.

Through agreements and treaties, ALADI works to eliminate trade barriers, facilitate trade, and promote economic development in the region, thereby contributing to the progress and prosperity of its members.

What Is a Customs Bonded Warehouse?

A customs bonded warehouse, also known as a customs warehouse, is a storage facility authorized by the customs authorities of a country for the storage of imported or export-bound goods. These warehouses are typically located in proximity to ports, airports, or border entry points to facilitate the logistics of import and export. They are designed to ensure that goods are stored under secure conditions and under strict control of the customs authorities.

How Does a Customs Bonded Warehouse Work?

The operation of a customs bonded warehouse involves a series of rigorous procedures to ensure compliance with customs laws and regulations. Here are the key aspects of how a customs bonded warehouse operates:

1. Goods Receipt: Imported or export-bound goods are delivered to the customs bonded warehouse. Each batch of goods is carefully documented and registered by customs authorities.
2. Secure Storage: Goods are stored in controlled conditions to ensure their integrity and safety. This may include temperature, humidity control, and other environmental factors, depending on the type of goods.
3. Customs Control: Customs authorities have access to the warehouse to inspect goods at any time. This ensures that all goods comply with customs regulations.
4. Documentation and Payments: All customs documents, such as import and export declarations and tax and duty payments, are carefully managed within the customs bonded warehouse.
5. Distribution: After clearance by customs authorities, goods can be distributed to the domestic market or exported to other countries.

The Importance of Customs Bonded Warehouses

Customs bonded warehouses play a crucial role in the global economy for several reasons:

1. Customs Control: They allow governments to rigorously control the movement of goods across borders, ensuring that all regulations and taxes are properly applied.
2. Facilitation of International Trade: By providing secure and efficient storage facilities, customs bonded warehouses promote international trade by facilitating the movement of goods between countries.
3. Risk Reduction: Storage in a controlled environment minimizes the risk of damage to goods, especially for perishable or sensitive products.
4. Logistics Support: They play a fundamental role in the global supply chain, ensuring that goods are available when needed.
5. Revenue Collection: Through the collection of tariffs and taxes, customs bonded warehouses contribute to government revenue collection.

In summary, customs bonded warehouses play a crucial role in managing international trade, ensuring compliance with customs laws and regulations, and contributing to the smooth operation of global commercial activities. They represent a vital component in the complex machinery that sustains the global economy.

The formula for calculating the Trade Balance is the following: value of exports – value of imports = Balance of Trade (BOT)

Most countries are both exporters and importers. They export goods that they have in abundance to other countries while importing goods that are short in supply domestically.

Goods and Services

Exports and imports can be divided into goods and services and can sometimes be expressed as two separate figures. We can assume that goods refer to physical items, while services refer to non-physical items.

Usually, a country’s imports and exports are not exactly equal, leading to either a trade surplus or a trade deficit. If a country exports more goods and services than it imports, it has a trade surplus. On the other hand, if a country imports more goods and services than it exports, it has a trade deficit.

Trade deficits can represent diverse situations. For example, one of the reasons trade deficits happen can be because of an overvalued or an undervalued exchange rate. This causes exports to be more expensive and imports to be cheaper, or vice-versa.

Another reason that trade deficits can occur is that a country’s population may have high levels of consumer spending and a low savings ratio, which encourages import spending relative to exports.

Trade Deficit Perceptions

Often, people believe that trade deficits can have some negative impacts. They can suggest the economy is uncompetitive and cannot export as many goods as it imports; it indicates the economy is unbalanced, which encourages consumption at the expense of saving, investment, and exports; it can lead to future devaluation in the exchange rate to restore balance.

However, contrary to popular belief, a country’s trade balance does not necessarily indicate its economic performance. In fact, trade balances alone provide little indication of how well an economy is doing. Economists agree that neither a trade “surplus” nor a “deficit” is inherently “bad” nor “good” for the economy. Trade deficits can benefit a country by growing the economy and improving living standards.

The United States, for example, has run a trade deficit since the 1970s. Economists conclude that trade creates economic benefits and costs; however, the long-term net effect on the economy is positive. Additionally, a trade deficit does not correlate with more significant job losses. For example, when the United States attempted to reduce its trade deficit with China, US manufacturing jobs failed to increase. A CRS report stated that the trade deficit has a relatively limited role to play in the overall US economy. To properly evaluate a country’s economy it is important to consider trade policies, the size of the trade imbalance, and the duration of a positive or negative trade balance.

Datamar

Datamar processes data on imports and exports from all the countries on the East Coast of South America. By using the information Datamar provides, it is possible to calculate the Balance of Trade in terms of volume, weight, or number of containers for those countries. Datamar partners with the maritime and foreign trade community to ensure that all parties requiring trade information can readily access it. This serves various purposes, including providing insight into countries’ economies.

Typically, NVOCCs transport small volumes of cargo that are grouped together in a single container. This process is known as unitization in the world of maritime trade.

The services offered by NVOCC came into being as a result of the worldwide increase in the use of containers. Logistically, it is simpler to bear the implications of loading containerized cargo than to deal with the transport of fractional volumes. However, in the past, small importers and exporters, who only sell small lots, did not have this alternative since transporting small volumes did not pay for the use of container space. Thus, to meet this market need, NVOCCs emerged, which buy space on containers to ship the consolidated cargoes of their various customers.

Among the advantages of contracting the transport services of an NVOCC are cost reduction, optimization of operations, and reduction of damage and cargo theft.

It is worth noting that all common carriers that do not own ships are responsible for contracting the carrier’s sea freight, paying port fees, and issuing the bill of lading for each cargo handled, making them basically shipowners that do not have their own fleet.

AFRMM – acronym for Brazil’s “Additional Freight Rate for the Renovation of the Merchant Fleet.” It is an addition to the freight rate charged by Brazilian and foreign shipping companies operating in Brazilian ports. 

Aladi – Latin American Integration Association. Association of countries whose goals is to establish a common market in Latin America formed by Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela.  

AWB – Air Waybill, air freight bill of lading. 

 B

Balance of Trade – net sum of a country’s exports and imports of goods. It is an important economic indicator that reveals a lot of the country’s situation. 

Bilateral Agreement – trade deal between two or more countries that facilitates the traffic of goods through the reduction of customs duties.  

Bill of Lading (BL) – legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. 

Blank/void sailing – term used when a shipping line or carrier decides to skip a particular port or an entire region of a scheduled sailing route. When this occurs, the cargoes of exporters remain on the terminal yard, while the cargoes of importers remain onboard the ship.  

“Bloco K do Sped” – digital rendition of the account book of Brazil’s SPED system created by the Federal Revenue to collect tax and accounting information from companies. 

Bonded warehouse – warehouse where imported goods are kept until they go through all customs procedures and are cleared to enter the market.  

Break Bulk – loose general cargo; stowed on board a ship individually counted units.

Bulk Cargo – unpackaged goods transported in bulk, not placed inside containers.  

Bulk Carrier – merchant ship specially designed to transport unpackaged bulk cargo in its cargo holds.  

Bulk Container – specialty-design container used in the transport of dry bulk cargo. 

Bunker oil – fuel oil for merchant ships 

C

Cabotage – shipping of goods between ports within a nation’s coastline, as opposed to goods shipped between two different nations.

Cargo Manifest – A document provided by an airline, via the Siscomex-Mantra system, previously informing the Federal Revenue Service of Brazil of the characteristics of the cargo (weight, volumes, nature, consignee, among others) contained in their flight.

Certificate of Origin – certification of the cargo’s origin which, when presented at customs, ensures reduced tax rates.

CFR – Incoterm which stands for Cost and Freight

CIF – Incoterm which stands for Cost, Insurance, and Freight

CIP – Incoterm which stands for Carriage and Insurance Paid to…

Container – a large box, usually metal, which is used to store goods during shipment. Allows for the unitization of cargo.

CPT – Incoterm which stands for Carriage Paid

Cubage – or cubic capacity, refers to the ratio between product weight and the space it occupies at any given transportation modal, like a truck or a vessel.

Cubic Meter – length, width, and height multiplied. Measures the size of cargo.

Customs Clearance (Exports) – the procedure through which the customs clearance of goods destined abroad is processed, whether they are exported definitively or not.

Customs Clearance (Imports) – the procedure by which the accuracy of the data declared by the importer is verified in relation to the imported goods

Customs Transit – Special customs regime that allows the transportation of goods in the national territory, under customs control, from one point to another in the customs territory, with suspension of tax payment.

 D

DAP – Incoterm which stands for Delivered at Place

DDP – Incoterm which stands for Delivered Duty Paid

Deficit – If imports are greater than exports, the trade balance becomes negative and generates a deficit in the economy, because it means that the country is buying more than it is selling

Demurrage –  a fee attached to cargo that has overstayed its time at a terminal.

Desova – Term used in Portuguese to describe the process of emptying a container

DPU – Incoterm which stands for Delivered at Place Unloaded

Draft (Calado) – measurement from the waterline to the lowest part of the ship’s hull, usually the ship’s keel.

Draft – the draft of the bill of lading. The document is still available for corrections.

Drawback – the refund of certain duties, internal revenue taxes, and certain fees collected upon the importation of goods and refunded when the merchandise is exported or destroyed.

DUIMP – Abbreviation for Single Declaration of Importation (in Portuguese, “Declaração Única de Importação”). The document is electronic and was proposed as a way to centralize all information and data in the process of importing goods.

E

EADI – a customs terminal for public use, located in a dry port. Generally located in a customs area with no proximity to the sea. They usually offer customs clearance services, warehousing, unloading, and handling of containers and cargo in general, destined for export or import.

ETA – Maritime transport expression, meaning the estimated time of arrival

ETS – indicates the time a vessel is expected to depart a specific port. Estimated time of sailing.

EUR – Abbreviation for the currency ‘Euro’

Export – the outflow of goods and inflow of foreign currency into the country

Ex Tarifário – a system that allows companies to import capital goods and information technology and telecommunications (IT and T) goods at a reduced rate of import duty

EXW – Ex Works – means that the seller shall deliver goods as soon as they are made available to the buyer at the sellers premises or other designated premises

 F

FAS – Free Alongside Ship

FCA – Free Carrier

Flatbed – a Flat Rack bed. Transports Breakbulk cargo, in some cases, can also be done on container ships.

FOB – Free on Board

Foreign Currency – Internationally convertible currency (Dollar and Euro)

Freight Collect – indicates who is responsible for the cost of freight and any additional charges incurred during shipment. If freight collect is specified, the consignee or the receiver will be responsible for the freight.

Freight Payable at Destination – similar to freight collect, however, it can only be paid at the destination.

Freight Prepaid or Freight Paid – This refers to freight, paid at the origin, when the goods are shipped.

Freighter – A ship designed to carry goods in bulk

Freight Forwarder – service aimed at optimizing logistical processes in international cargo freight. The individual or company that provides this service is not typically a ship owner. In fact, freight forwarders work as mediators between exporters and importers, carriers, shipping companies, airlines, etc. 

Full Container Load (FCL) – method of transporting goods in which your shipment occupies a full container (of any size).

G

GR – calculation of cargo terminal storage.

H

Harmonized System – a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.

HAWB (House Airway Bill) – document issued by an air carrier that mentions details of goods being shipped by air.

Hopper – port installation specially equipped for the movement of certain solid grains. It is a metallic machine which can contain bulk grains – even after being crushed

I

ICC – International Chamber of Commerce

ICMS – This is an acronym for Tax on the Circulation of Goods and Services.

IMO – IMO stands for International Maritime Organization.

Incoterms – International commercial terms. Set of 11 internationally recognized rules which define the responsibilities of sellers and buyers.

Inmetro – Short for “National Institute of Metrology, Quality and Technology”. Federal autarchy, linked to the Ministry of Development, Industry and Foreign Trade, which acts as the Executive Secretariat of the National Council of Metrology, Standardization and Industrial Quality.

Intermodal Transportation – the integration of services from more than one mode of transport, with the issuance of independent documents, where each carrier assumes responsibility for its own transport.

Import – Incoming goods and outgoing debts from a country.

Importer – Individual or legal entity responsible for the entry of material for scientific and technological research into the country.

ISO – International Standards Organization. International organization that sets technical norms and standards that are followed internationally, e.g. the legal measurements of containers in world trade.

IPI – The Tax on Industrialized Products, regulated by Decree 4,544/2002, is a federal tax levied on industrialized products, whether domestic or imported. The rate applied varies depending on the product.

J

Job Lot – Negotiable lot of goods

K

Kaizen – continuous improvement process that must be supported by both the management and the employees of a company for it to be realised.

L

LI – An import license imposed by the authorities for the importation of certain goods that must undergo some type of control.

LPCO – Licenses, Permits, Certificates, and Others – LPCO is the new way of communicating with the CMEX consenting bodies responsible for issuing licenses, permits, certificates, and other export documents, in order to meet administrative restrictions or special requirements

Lashing – the securing of cargo for transportation, with the goal of minimizing shifting when in transit.

LCL – Less than Container Load. Term referring to when containers are only partially filled.

Liner Service – shipping service that operates to a timed schedule visiting a fixed loop of ports.

 M

Maneuvering/Turning Basin – contiguous body of water near berthing structures intended for allowing cargo ships to turn and reverse their direction of travel.

Mantra – the Integrated Manifest, Transit, and Storage Management System.

Merchant Navy – the set of organizations, people, vessels, and other resources dedicated to maritime, fluvial, and lacustrine activities of a civil scope.

Mercosul – Aims for economic and commercial integration among its partners – Argentina, Brazil, Paraguay, and Uruguay.

Multimodal Transport – the integration of services from more than one mode of transport, used for a certain cargo to travel between the sender and its recipient, among the various existing modes of transport, with only one single bill of lading issued by the only responsible for the transport, which is the OTM – Multimodal Transport Operator.

N

NCM – “Mercosur Common Nomenclature” is an eight-digit code established by the Brazilian government to identify the nature of goods.

NVOCC – Non-vessel Operating Common Carrier. It is a maritime carrier that does not own or operate ships. It consolidates several small volumes of cargo into containers.

Non-operating Reefer (NOR) – Reefer container that is turned off, and no longer refrigerating.

O

Outbound – From factory to dealer

OTI – Ocean Transportation Intermediaries (OTIs), also known as freight intermediaries, are companies or individuals licensed to serve as the middleman between exporters and importers, providing essential logistical services in foreign trade.

Ovação – Term used in Portuguese to describe the process of putting cargo in a container

Over weight – An excess of weight in proportion to the cubic meters

P

Packing List – International document with technical details, dimensions and weight of goods.

Pallet – flat, (usually wooden) structure that is used for handling transport, storing goods or transporting freight.

Pilot – One who, though not belonging to a ship’s company, is licensed to conduct a ship into and out of port or through dangerous waters.

PIS – stands for Programa de Integração Social, a social tax contribution that aims to finance the payment of unemployment insurance.

Prepaid – freight paid at origin

Primary Zone – Area demarcated by the customs authority at ports, airports, and bonded border points.

Pro forma invoice – draft available for correction of the Commercial Invoice.

Q

Quality Ceritifcate – document issued by the cargo superintendent, certifying to the interested party, the ascertainment of the quality of the merchandise shipped or unloaded.

R

RADAR – The Registration and Tracking of the Actions of Customs Agents.

Recof – Computerized Industrial Warehouse System under Customs Control – Allows the accredited company to import with the suspension of taxes, under customs control, destined for the industrial production of goods to be exported.

Reverse Logistics – method used to recover and reuse discarded items and used packaging from the customer. In other words, the concept of reverse logistics refers to the fact that reusable packaging and/or damaged products can be recycled and reused by the original manufacturer.

RFB – Brazilian federal revenue

RO-RO – a type of cargo ship specialized in transporting wheeled cargo such as automobiles and other vehicles that are driven on and off the ship using their own wheels. Ro-Ro is the abbreviation for “Roll on/Roll off”, which means to drive on and off the ship.

 S

SDA – Customs Brokers Union

Secondary Zone – It comprises the customs territory, excluding the primary zone, including territorial waters and airspace.

Siscomex – RFB system for foreign trade

Shipowner – is the natural or legal person who, at his own risk, equips, maintains, and commercially operates a merchant’s vessel. You can be the owner, partner or charterer of the ship. Examples of foreign trade carriers are Maersk Line, CMA CGM, Hamburg Sud, etc.

Surplus – When exports are greater than imports, we say that the Balance is positive, generating a Surplus. Such a condition is excellent for the country, since it means that the national product is being well sold abroad. 

 T

TBRS – Common external tariffs

TETI – Foreign Transit Carrier

TEU – Twenty-Foot equivalent unit. Term used for a 20-foot container.

Trade Balance – It is the combination of a country’s import and export accounts. Moreover, it is a significant economic indicator that reflects a lot about the country’s situation.

Transportation Modals – the existing types/means of transportation. Maritime, railroad, road, waterway, pipeline and airway.

U

USD – Acronym for United States Dollar.

 V

Vessel Cargo Stowing – filling a container with merchandise.

Voyage – going and/or coming of a ship to its port or ports of destination.

W

Wharfage – A fee charged by the terminal in exchange for using a wharf and associated equipment for loading or unloading goods. Also used for calculating taxes on imports.

W/M – Fee charged per cubic meter