import/export – the new frontier of internet marketing

THE DIRECTION OF THE INDUSTRY

§  Experienced marketers launching products and stores.

§  Product Funnels, general eCommerce, F+S.

§  More control - more headaches.

§  Simplifying the process.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

BULK SHIPPING

§  Express for smaller shipments

§  Air Cargo

§  Sea freight

§  Road + Rail

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

EXPRESS

§  DHL, FedEx, UPS

§  Expensive – but fast.

§  DDP – Customs pre-cleared, duties paid.

§  Door-to-door.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

AIR CARGO

§  Passenger Airline cargo vs Cargo Only planes

§  Hazardous considerations

§  FOB – Not pre-cleared by Customs, duties unpaid.

§  Relatively fast – Expensive but less than Express.

§  Up to you to get it from Airport to Destination (FOB).

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

SEA FREIGHT

§  LCL, FCL, TEU pricing

§  Slow – but cheap. 30 days avg transit.

§  Port locations – ocean port, inland/dry port

§  FOB - Not pre-cleared by Customs, duties unpaid.

§  Up to you to get it from Port to Destination (FOB).

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

SEA FREIGHT – EAST COAST/WEST COAST CONSIDERATIONS

§  Panama Canal usage

§  Labor strike potential

§  Cost differential

§  Customer access

§  New Panamax/Panama Canal deepening and cost impact

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

ROAD & RAIL

§  Imports from Canada and Mexico commonly use

§  “Intermodal” – Rail for part, Truck for part

§  LTL, FTL, Drayage

§  NAFTA

§  Use post-sea/air freight for delivery from port

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

CLEARING CUSTOMS

§  Customs Broker is an independent expert licensed with the U.S. Department of Homeland Security

§  Duties based on country of origin and Harmonized System code (HS Code)

§  Inspection for contraband, improper shipment materials (soft woods without pest spray), quarantines, etc. X-Ray and manual inspections, including full containers.

§  Other regulatory agencies such as USDA and FDA may be a part of the clearance process, i.e. for food, agricultural products, drugs, and cosmetics.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

HAZMAT CONSIDERATIONS

•  Lithium Batteries (FAA Fines) •  Flammable liquids •  Toxic substances (EPA/TSCA) •  Aerosols •  MSDS Requirements •  UN Numbers •  Labeling requirements •  DOT/IATA Certifications •  Limited Quantity Exceptions

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

UNITED STATES TARIFFS, DUTIES, AND FEES

§  HS Code information and classification

§  Anti-Dumping duty (steel, solar panels, etc)

§  $800 “De Minimis Exemption”

§  Customs processing fees

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

DECLARED VALUES

§  Under-declaring values to US Customs is a Crime.

§  Massive Fines and seizure of product are possible.

§  Factories may attempt to declare low values or quantities in an attempt to circumvent laws and be under De Minimis.

§  US CBP does investigate suspicious shipments for declared value.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

PARCEL SHIPMENT METHODS

§  Express carriers

§  USPS International

§  Consolidators

§  Packaging considerations

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

EXPRESS CARRIERS

§  DHL, FedEx, UPS

§  Expensive – but fast. Potentially extremely expensive. DDP, Customs and Duties prepaid often.

§  Ground options to Canada

§  Cargo air only typically

§  Always fully tracked. No other carrier handles.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

USPS INTERNATIONAL

§  International postal agreements. USPS carries out, local postal carrier in country of destination delivers.

§  Not always fully tracked. Scan errors more likely, particularly during postal handoff.

§  Express options via “EMS” consortium, organized by Universal Postal Union (UPU). This will be tracked fully.

§  Typically less expensive than private express carriers, but with more limitations.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

MAIL CONSOLIDATORS §  Private carrier sort, brought to passenger airlines, delivered by local national

postal carrier.

§  Typically partnered with USPS for tracking and entering mail stream.

§  Cheapest option when shipping volume is high. Rates can be negotiated. Fulfillment centers an option for negotiated rates.

§  May not always be fully tracked. Tracked options available such as ePacket and equivalent services.

§  Delivery time slightly higher than USPS direct. Also depends on destination.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

HAZARDOUS CONSIDERATIONS

§  Only express carriers and freight will allow for dangerous cargo – special contracts often required.

§  Heavy fines for dangerous cargo making it on a passenger airplane. (Domestic and International)

§  Lithium battery exceptions for when within the device – individual cells not shippable without contract.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

DUTIES, TAXES, AND MORE

§  VAT/GST Considerations per country.

§  De Minimis exemptions vary per country or unified economic zone (such as the E.U.).

§  DDP/FOB shipments – package can be held for unpaid taxes and duties, until paid by your customer to their local postal service.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

SAMPLE DE MINIMIS EXEMPTIONS

§  Canada - $20 CAD

§  E.U. – Under 22, exempt from VAT/Duties. 22-150 EUR, Exempt from duty, VAT is due. 150+ EUR, both due.

§  Japan – 10,000¥

§  Brazil – 50 USD only for Postal shipments. Express carriers not exempt.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND

DECLARED VALUES

§  Under-declaring values risks being banned from shipping goods to that country.

§  Customs of country may adjust declared value based on their research, and charge customer higher taxes.

§  Criminal penalties and fines may apply for countries in treaty with the United States.

IMPORT/EXPORT – JOHN MONARCH – CEO, DIRECT OUTBOUND