What is cross-trade?

Cabotage and cross-trade - the main differences

Cross trade - definition

Cross-trade is international road transport between two different countries performed by a road motor vehicle registered in a third country. Other terms that may be encountered for this type of transport operation are throughput or so-called 'large-scale cabotage'. Cross trade transport is possible and profitable due to the wide availability of external markets within the Schengen area. In practice, this state of affairs has a real impact on the markets of all EU member states and results in a significant increase in competitiveness between transport companies in the individual countries of the Community. Cross trade is important because it connects markets and economies around the world, giving citizens more opportunities to produce and consume, stimulating economic growth, and reducing poverty around the world.

What is cross-trade -Matex Transport Logistics

Cross trade carriage - examples

A cross trade operation would be a situation in which a company registered in Poland performs cargo transportation between Portugal and Germany.
A company from Spain is involved in the manufacture of products purchased by Slovakia. At the same time, a transport company from Romania handles the transport of products between the producer country and the destination country.
A company producing windows in the Czech Republic sells to France. At the same time, a company from Poland is responsible for delivering the products.

In these examples mentioned, there is cross-trade. In the first case, the shipper, i.e., the transport company from Poland, is neither Portugal nor German. In the second case, the Romanian company merely acts as an intermediary in the transport. It is worth noting at this point that this type of transport does not take place exclusively within the European Union.

It is accepted to recognize that cross-trade takes place between countries, not between companies. This means that the process is handled by national industries, not by individual companies. Above all, cross-trade allows companies to take care of activity in global economies, which was not possible before.

Cross trade vs cabotage - main differences

The difference between cross-trade and cabotage is that cross-trade is the transportation of goods from one country to another (across international borders), while cabotage is the transportation of goods exclusively within a country (but other than the country in which the company is registered).

For example, a cabotage would be, for example, a transport from Madrit to Barcelona carried out by a vehicle registered, for example, in Poland.

(For more information on cabotage, visit our blog, where we describe the new cabotage rules after the mobility package comes into effect.)

What, then, is the difference between cross-trade transportation? The places of loading and unloading of goods - they must be in different countries, so we would classify as cross-trade, for example, the carriage of cargo from Madrit to Paris. It is because of the larger scale of operations performed that cross-trade is sometimes referred to as large-scale cabotage.

Cross trade vs cabotage - Matex Transport Logistics

Mobility package

In July 2020, the European Parliament announced the Mobility Package. This is a set of regulations for road transport in the community, aimed at improving working conditions for drivers and regulating the transport market. Some of the gradually introduced solutions have been criticized by Polish transport companies. Why?

The mobility package is a set of changes to EU regulations that affect the rules of carriers in the EU market. It is worth noting that Germany and France had already introduced internal regulations that applied to the work of drivers from other countries on their territories. The provisions of the Mobility Package concern, among other things:

driver work, including rest and driving hours,
posting of drivers,
cabotage,
tachographs,
operations of transport companies.

Read more about the Mobility Package in our articles:

What changes took effect from February 2022?

Drivers who work in international transport within the community must be paid the full minimum wage applicable in the country where they perform the service. This regulation does not apply to transit journeys and bilateral transports to and from the country where the company is based. However, it does apply to cabotage transports, i.e. situations in which, for example, the driver of a Polish company transports goods in another EU country, and cross trade transports, i.e. transports from one EU country to another, different from the carrier's headquarters.

The second major change from February 2 is a new way of calculating driver salaries. It is worth being aware that the mobility package forces transport companies to pay drivers performing cross-trade and cabotage transports per diems and lump sums for overnight stays, which will not be counted as foreign wages. This means that companies will incur significantly higher costs, since the payment of employees in many cases will include both a compensatory allowance representing the difference between, for example, the Polish salary and the foreign minimum wage due, and per diems resulting from the posting regulations.

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