1. Export and Import Practices
Chapter 14
Export and Import Practices
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives
LO1: Identify the sources of export counseling and support.
LO2: Discuss the meaning of the various terms known as Incoterms.
LO3: Identify some sources of export financing.
LO4: Describe the activities of a foreign freight forwarder.
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3. Learning Objectives LO5: Outline, the export documents required.
LO6: Identify import sources.
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4. Reasons Companies Hesitate to Export
Preoccupation with vast U.S. market
Reluctance to assume risk of unknown
Identification of foreign markets
Payment and financing procedures
Export procedures
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5. Sources of Export Counseling
Federal and state depts. of commerce Banks Small Business development centers Private consultants
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6. Develop Marketing Plan
Does a market exist for product?
Sources of export information, counseling and support
Export.gov – Dept. of Commerce
International Trade Administration
World Trade Centers Association—private sector
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7. Export Marketing Plan Similar to domestic marketing plan
Specific about
Markets to be developed
Marketing strategy and tactics
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8. Common Mistakes made by New Exporters
Don’t obtain export counseling.
Lack top management’s commitment.
Careless selection of sales rep and distributors.
Chasing orders, not following a plan.
Neglect exports when home market booms.
Don’t treat international as equal to domestic.
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9. Common Mistakes made by New Exporters
7. Generalize one successful technique acr. mkts. 8. Unwilling to localize (regulations and culture). 9. Failure to provide after sale in local language. 10. Won’t use export mgmt co. 11. Won’t consider licensing or JVs. 12. Don’t provide servicing.
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10. Incoterms General transportation Incoterms
Ex Works: Goods available at named factory
FCA: Free carrier at named place
CPT: Carriage paid to named destination
CIP: Carriage and insurance paid to named place
DAT: Delivered at terminal
DAP: Delivered at place named
DDP: Delivered, duty paid
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11. Incoterms Water transport Incoterms FAS: Free alongside ship
FOB: Free on board
CFR: Cost and freight to destination port
CIF: CFR plus insurance to destination port
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12. Incoterms
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13. Payment Procedures Payment Terms Cash in advance—adv to seller
Open account—adv to buyer
Consignment—mjr adv to buyer
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14. Letter of Credit (L/C) Document issued by buyer’s bank
Promise to pay seller specified amount when bank has received stipulated documents
confirmed—Seller’s bank agrees to honor
Irrevocable—once sellers accepts, not changeable
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15. L/C
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16. Export Documents Air Way Bill Pro Forma Invoice Export draft
Bill of lading issues by air carrier
Pro Forma Invoice
Exporter’s formal quotation
Export draft
Unconditional order drawn by seller on buyer (sight or at future time) that must be paid before buyer receives shipping documents
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17. L/C Transaction
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18. Payment Risk/Cost Trade-Off
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19. Export Financing, private
Banker’s acceptance
Commercial paper
Factoring
Discounting account receivable
Forfaiting
Purchasing account receivable; risk born by forfaiter
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20. Export Financing, public
Ex-Im Bank
Overseas Private Investment Corporation
Discounting account receivable
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21. Other Export incentives
Foreign trade zones
Free trade Zones
Customs drawbacks
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22. Export procedures Foreign freight forwarders Agents for exporters
Prepare documents
Book space
Advise on markets, regulations, transport, packing
Supply cargo insurance
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23. Export documents Shipper’s export declaration
Validated/general export license
Export bill of lading
Insurance certificate
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24. Collection documents Commercial invoice Consular invoice
Certificate of origin
Inspection certificate CE
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25. Export shipments
Container
LASH
RO-RO
Air freight
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26. Sea-Air Cost Comparison
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27. Ways to Identify Import Sources
Similar imported products are in the market Inquiry at consulate or embassy World Trade Centers’ electronic bulletin board
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28. Customs House Broker
Similar to foreign freight forwarders, for imports Brings goods through customs Tracks import quotas
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