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Products and Parcels

By far, the most important part of a sufficient setup of a record keeping is the so-called Parcel administration.

Customs is all about Products. Please let that sink in.

Yes, Products are transported with a means of Transportation or are stored and blended in tanks. But without Product, no need for MoT's to transport Product or Tanks to store and blend. So the starting point should always be the Product.

No Product, no business!


A Product is defined as a physical substance or article. Something you can physically identify, point at or pick up. The Product is the thing that Operations deal with to Move or to apply a Service to, such as homogenizing.

A Product is defined as a physical substance or article


In the case of piece goods, you can easily keep them apart. For example, when your receive a car component, such as a steering wheel, you can have a 'top shelf' where you store steering wheels brought in from outside the EU (referred to as having a non-Union customs status (commonly referred to as Bonded or T1) and a 'bottom shelf' where you store steering wheels coming from the free circulation of the EU (referred to as having a Union customs status) (commonly referred to as T2). The same thing applies to the origin of the Products. One steering wheel coming from the US, the other coming from Germany. You could add labels to the steering wheels. A Product is registered by Trade name and Commodity code.

With bulk products this is not possible. That means it should be recorded in the record keeping and the data is tracked by accounting segregation.

A Parcel is the registration of a Product with certain administrative characteristics. For example, a Parcel has a:

  1. Customs Status (non-Union (T1 Bonded) or Union (T2);
  2. Origin;
  3. value;
  4. Etc... 

Let's say we receive gasoil originating from the US, which is discharged into a Tank containing gasoil originating from the EU. After discharge, the Tank contains Gas oil (Product). The Tank contains two Parcels, namely an x quantity of Gas oil originating from the US and an x quantity of Gas oil originating from the EU. Physically segregating these Parcels is practically undoable, therefore the registration of a Parcel allows for the application of accounting segregation and tracking of the Products as received. For compliance purposes it is critical to provide for an audit trail, which requires a sufficient Parcel administration.

A Parcel is the registration of a Product with certain administrative characteristics


A parcel is identified by a unique reference where at least a part of that reference is static, meaning that when administrative changes are done to an existing Parcel, the Parcel can always be identified. When a parcel is registered, new activities can take place in relation to that Parcel or part of that Parcel. To preserve an audit trail, it is important to maintain a relation between Parcels, by a so-called Parent-Child relation. This is typically done by means of three Parcel elements in terms of reference:
 
  1. The Ultimate Parent. This is the Parcel reference created the first time a Product is registered by means of a Parcel. This means a first time registration of a Parcel results in a Parcel without having an (ultimate) parent registration;
  2. The Parent. This is the reference to the Parcel where the current Parcel (Child) directly comes from. This means a first time registration of a Parcel results in a Parcel without having a parent registration;
  3. The Child. This is the Parcel reference, where dependent on if there is a Parent reference, it is considered the Child reference.
In case of the registration of a Blended Product, the Parcel will have multiple Parent references showing the relation to the Components.

The words Parcel and Lots are sometimes used interchangeably, but could refer to the same principle. Or sometimes a Lot is referred to as a part of a Parcel. Any form of Stock Keeping Unit and name can be used, as long as it serves the principles.
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