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