international trade center how to export patrick spence international trade center - tsbdc september...

International Trade Center

How to Export

Patrick SpenceInternational Trade Center - TSBDC

September 6, 2006


Before You Export

• Designate someone to oversee the export program

• Get training or counseling in export procedures

• Convert product information from standard to

metric

• Know cubic dimensions of your products container

• Be aware of any legal issues with the exporting

your product


Communicating Overseas

Mail Website

Phone Ads in export publications

FAX Government Marketing

Programs

E-mail Trade Shows

Advertising


Answering Trade Leads

• Respond back within 24 hours

• If you are not ready to quote, then buy

some time

• Call for help, if necessary

• Set up a “file” to keep track of prospects


Answering Trade Leads

Cultural Differences:

• Language

• History of Country

• Perception of Value

Negotiation:• Flexible• Compromise• Legal Limits


Preparing Quotes

• Pricing

• Shipping terms

• Payment terms

• Complete and accurate format


Export Pricing

• Domestic price plus cost (Cost Plus Method)

• Global market price

• Local market price (Specific Country)

• Fixed vs. Variable Pricing


Cost-Plus Method

Domestic Sale Export Sale

Factory Price $100.00 $100.00

Domestic Freight 5.00 5.00

$105.00 $105.00

Export Docs -0- $ 1.00

Int’l Bank Fees -0- $ .50

Int’l Freight & Ins -0- $ 2.00

$108.50

Import Duty (.10 Landed cost) $ 10.85

Cost to Wholesaler $105.00 $119.35


Export Pricing Summary

• Determine the objective in the foreign market

• Compute the total cost of the export product

• Compute final consumer price.

• Evaluate market demand and competition

• Exclude costs elements that provide no benefit

to the export function (Domestic Advertising)


Schedule B

Schedule B Harmonized Commodity Description andCoding System

The United States has adopted the Harmonized Commodity Description and Coding System (HS) for classifying merchandise in international trade. Exporters, freight forwarders, and carriers must report export shipments in terms of the HS. The HS code for any given agricultural product can be obtained from the Department of Commerce publication: Schedule B--Statistical Classification of Domestic and Foreign Commodities Exported from the United States.


2000 Incoterms

Group E

Departure

EXW ExWorks

Group F

Main Carriage Unpaid

FCA Free Carrier

FAS Free Alongside Ship

FOB Free On Board


2000 Incoterms

Group C

Main Carriage Paid

CFR Cost & Freight

CIF Cost, Insurance & Freight

CPT Carriage Paid To

CIP Carriage & Insurance Paid


2000 Incoterms

Group D

Arrival

DAF Delivered At Frontier

DES Delivered Ex Ship

DEQ Delivered Ex Quay

DDU Delivered Duty Unpaid

DDP Delivered Duty Paid


2000 Incoterms

Incoterm must have a location/destination with it.

An example is FOB Port of New Orleans (Incoterms 2000).


Payment Terms

• Cash in Advance

• Letter of Credit (L/C)

• Documentary collection or draft

• Open Account


Pro-forma Invoice• Best advance estimate of form and content of the

actual invoice.• For exporter, general is better than specific.• Basic requirements:

Seller’s & Buyer’s name and addressProduct descriptionPriceCurrencyShipment method (Ocean or Air)Terms of Shipping (Incoterms 2000)Payment TermsValidity period for quotation


Pro-forma Invoice

CLARIFY THE DETAILS – Before issuing the Pro-forma Invoice, make sure you clarify the following points with your buyer:

• Final shipping date

• Expiration date of the Letter of Credit

• Other deadlines that are important to you and the buyer

• Special Instructions or certificates involved

• Specific packing or labeling requirements


Pro-forma Invoice

CLARIFY THE DETAILS – Before issuing the Pro-forma Invoice, make sure you clarify the following points with your buyer:

• Check with your international banker

• Check with your international freight forwarder


Pro Forma Invoice Commercial Invoice Phytosanitary Certificate Export Certificate--Processed Plant Products Packing List Shipper's Letter of Instruction Certificate of Origin Insurance Certificate Shipper's Export Declaration Bill of Lading

Transportation Documents


Commercial Invoice

The commercial invoice is a bill for the goods. The buyer needs the invoice to prove ownership and to arrange payment. Some governments use the commercial invoice to assess customs duties. Although there is no standard form for a commercial invoice, the following information should be included:

Seller's name and address Buyer's name and address Exact description of goods (kind, grade, quality, weight) Agreed-upon price Type of container Description of packages (number, kind, markings) Delivery point Terms of payment Date and place of shipment Method of shipment

Signature of shipper/seller


Phytosanitary Certificate

The purpose of the phytosanitary certificate, Plant Protection and Quarantine (PPQ) form 577, is to expedite the entry of plants or plant products into a foreign country. This certificate certifies to a foreign country that the plants or plant products described were inspected by the U.S. Government and are free from quarantine pests and other injurious pests of specific concern to the importing country. This certificate is completed by USDA's Animal and Plant Health Inspection Service (APHIS).


Export Certificate-Processed Plant Products

The export certificate for processed plant products, PPQ form 578, was created for processed plant products that cannot be given a phytosanitary certificate but have been denied entry to one or more countries because no certification process existed. This certificate certifies to a foreign country that the processed plant product has been inspected by the U.S. Government and that the shipment was processed or manufactured to the extent that there is negligible risk of harboring injurious plant pest of specific concern to the importing country.


Export Certificate-Processed Plant Products

Examples of products that fall under this category are:

Bulk newsprint derived from wood pulp

Wood products, molding, pressure-treated lumber, particleboard, plywood, timber impregnated with creosote, tonguein-groove flooring, paneling, ceiling, veneer, and furnitureparts, either sanded or un-sanded

The processed product certificate is also completed byAPHIS.


Weight Certification

All cargoes that are either loaded into trailers or ocean shipping containers that are part of an intermodal movement, that will travel by motor carrier on a U.S. public highway, and weigh more than 29,000 pounds will require certification.


Packing List

The export packing list is considerably more detailed and informative than a standard domestic packing list. An export packing list itemizes the material in each individual package and indicates the type of package--box, crate, drum, carton, etc. It shows the individual net, legal, tare and gross weights, and measurements for each package (in both imperial and metric units).


Shipper Letter of Instruction

This document is completed by the shipper and includesall of the information necessary for the freight forwarder orcarrier to make transportation arrangements and completethe bill of lading and other related documents.

• Shipper's company name, address, phone, fax, and contact name • Shipper employee identification number • Shipper reference numbers (bill of lading, invoice, purchase order, etc.) • Product information (description of goods, product quantity, number of

packages, weight in pounds, cubic feet, marks) • Consignee information • Notify party • Product invoice value • Harmonized commodity code • Freight and documentation billing information • Special instructions • Signature and date


Certificate of Origin

Certain nations require a signed statement as to the origin of the export item. The certificate is usually obtained through a semi-official organization, such as a local Chamber of Commerce. It may be required even though the commercial invoice contains the information.


Consular Invoice

A consular invoice for imported goods may be required by certain nations. It is used as a means to control and identify imported goods. The invoice must be purchased from the consulate of the country where the goods are being shipped and usually must be prepared in the language of that country.


Insurance Certificate

If the seller is responsible for providing insurance, the insurance certificate should state the type and amount of coverage. This is a negotiable instrument.


Shipper’s Export Declaration

The U.S. Government requires that exporters complete a Shipper's Export Declaration (SED) for international shipments. The SEDs, forms 7525-V, 7525-V-Alternate (Intermodal), and 7513 (In-Transit Goods), are joint Bureau of the Census/International Trade Administration documents. They include pertinent information on the export transaction such as parties to the transaction, transportation details, Schedule B classification, value of the goods, and export licensing information. The information collected is used for compiling official U.S. export statistics and administering the requirements of the Export Administration Act.


Bill of Lading (b/l)

They act as a contract between the owner of the goods and the carrier to deliver the goods, spelling out all legal responsibilities and liability limits for all parties to the shipment.

They act as receipt from the ocean carrier, confirming that they have received the goods for shipment.

They act as title to the shipment and can be used to transfer title to the goods to a party named in the document.

The b/l is issued by the carrier.


Questions?

international trade center how to export patrick spence international trade center - tsbdc september...

Documents

product slide

board slide

quotation slide

international banker

variable pricing slide

accurate format slide

export procedures

export docs