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Export & Import Practices

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Presentation on theme: "Export & Import Practices"— Presentation transcript:

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 government’s requirements Remain competitive at home Test foreign markets inexpensively Customer requests Offset cyclical demand

3 Exporting Why get involved? Why not to export>
Gain additional sales Extend product life cycle Distract competition entering your market Copy others’ success Improve efficiency at full capacity Why not to export>

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 Banker’s 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 Shipper’s 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 (cont’d) 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 LASH RO-RO Air Freight Advantages Barges
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 Prospective Importer Should:
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

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