Export

1
Export Import Practices

• Chapter 16

2
Exporting

• Why get involved?
• Serve markets where no production facilities
• Serve markets where local operation does not
  create product mix
• Satisfy host governments requirements
• Remain competitive at home
• Test foreign markets inexpensively
• Customer requests
• Offset cyclical demand

3
Exporting

• Why get involved?
• Gain additional sales
• Extend product life cycle
• Distract competition entering your market
• Copy others success
• Improve efficiency at full capacity
• Why not to exportgt

4
Locating Foreign Markets

• Sources of Export Financing
• Trade Information Center
• International Trade Administration
• Market access and compliance
• Trade development
• U.S. Foreign Communication Service
• Small Business Administration

5
Locating Foreign Markets

• Department of Commerce Export Assistance Program
• Foreign Market Research
• National Trade Data Bank
• Direct or indirect exporting
• Commerce District Office
• Show and sell
• Trade events

6
Locating Foreign Markets

• Other Sources of Assistance
• World Trade Centers
• District Export Councils
• State governments

7
Locating Foreign Markets

• Export Marketing Plan
• Similar to domestic
• Marketing mix
• Pricing policies
• Terms of sale
• Definition
• FAS
• CIF
• CFR
• DAF
• Factory door cost
• Sales Agreement
• Calvo Doctrine

8
Payment Financing Procedures

• Export Payment Terms
• Cash in advance
• Open account
• Consignment
• Letters of credit
• Must be
• Confirmed
• Irrevocable
• Air waybill
• Pro forma invoice
• Documentary drafts
• Export draft
• Sight draft
• Time draft

9
Payment Financing Procedures

• Export Financing
• Private source
• Bankers acceptance
• Factoring
• Forfaiting
• Export-Import Bank
• Direct and intermediary loans
• Working capital guarantee
• Guarantees
• Export credit insurance

10
Other Government Incentives

• Overseas Private Investment Corporation
• Foreign Sales Corporation
• Foreign Trade Zones
• Free trade zone
• Foreign trade zone
• Advantages to exporters
• Rebates and customs drawbacks

11
Export Procedures

• Transaction paper costs
• Foreign Freight Forwarders
• Export Documents
• Shipping documents
• Shippers Export Declaration
• Names and addresses of shipper and consignee
• U.S. port of exit and foreign port of unloading
• Description and value of goods
• Export license number and bill of lading number
• Carrier transporting the merchandise

12
Export Procedures

• Shipping documents (contd)
• Export licenses
• General export license
• Validated export license
• Export bill of lading
• Insurance certificate
• Legal obligation?
• Three marine insurance policies
• Basic named perils
• Broad named perils
• All risks
• What dictates premiums?
• Automated Export Systems

13
Export Procedures

• Collection documents
• Commercial invoices
• Like domestic invoices
• Differences
• Consular invoices
• Certificates of origin
• Some countries
• Inspection certificates
• Grain, foodstuffs, live animals

14
Export Shipments

• Containers
• Advantages
• LASH
• Barges
• RO-RO
• Air Freight
• Advantages
• More expensive?
• Insurance rates
• Packing
• Customes duties
• Replacement costs for damaged goods
• Invenory
• Other

15
Export Shipments

• Air Freight
• Advantages
• More expensive?
• Insurance rates
• Packing
• Customes duties
• Replacement costs for damaged goods
• Invenory
• Other
• Other considerations
• Production and opportunity costs
• Air dependency
• Perishable market
• Spare parts available

16
Importing

• How to Identify Import Sources
• Check labels
• Call counsel/ embassy
• Contact counsel/ embassy
• World Trade Centers
• Electronic board
• Accidental importing

17
Importing

• Customhouse Brokers
• What do they do?
• Primary activity
• Other activities
• Transport
• Monitor quotas
• Quota limits
• Bonded warehouse
• Abandon
• Send to another country

18
Importing

• Import Duties
• Harmonized Tariff Schedule of U.S.
• How does it work?
• Ten-digit numbers
• First six digits Universal
• Last four digits U.S. only
• Prospective Importer Should
• Disclose all foreign arrangements
• Ask customhouse before making arrangements
• Calculate landed price in advance