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Export & Import Practices Chapter 16. Exporting Why get involved? Why get involved? Serve markets where no production facilities Serve markets where no.

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Presentation on theme: "Export & Import Practices Chapter 16. Exporting Why get involved? Why get involved? Serve markets where no production facilities Serve markets where no."— Presentation transcript:

1 Export & Import Practices Chapter 16

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

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

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

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

6 Locating Foreign Markets Other Sources of Assistance Other Sources of Assistance World Trade Centers World Trade Centers District Export Councils District Export Councils State governments State governments

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

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

9 Payment & Financing Procedures Export Financing Export Financing Private source Private source Banker’s acceptance Banker’s acceptance Factoring Factoring Forfaiting Forfaiting Export-Import Bank Export-Import Bank Direct and intermediary loans Direct and intermediary loans Working capital guarantee Working capital guarantee Guarantees Guarantees Export credit insurance Export credit insurance

10 Other Government Incentives Overseas Private Investment Corporation Overseas Private Investment Corporation Foreign Sales Corporation Foreign Sales Corporation Foreign Trade Zones Foreign Trade Zones Free trade zone Free trade zone Foreign trade zone Foreign trade zone Advantages to exporters Advantages to exporters Rebates and customs drawbacks Rebates and customs drawbacks

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

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

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

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

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

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

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

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


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