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THE BASICS OF EXPORTING
Brian Barber, NCBFAAJan Fields, Corporate
Manager John S James CoHow to Ship Your
ProductsJuly 6, 2011
http://www.census.gov/
foreign-trade/data/video001.html
What is a Freight
Forwarder ?
How to Choose a Freight Forwarder
• Licensed by the Federal Maritime Commission – Air Cargo Association
• Member of an Association, such as the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA)
• Proven knowledge• Certified Export Specialist (CES)
Freight Forwarder Considerations
Ask Questions
• Does the forwarder have an export compliance program?
• Who will be handling your account and what is their level of experience?
• Who will be the back up/alternative contact?
Choose a forwarder who asks questions
• Establish compliance with all considerations met prior to the shipment moving
Freight Forwarder Considerations
Provide the freight forwarder with your expectations
• Ensure your freight forwarder is aware of your level of experience
• Establish compliance with export administration regulations together with your forwarder
Don’t necessarily choose the lowest rate
• Make sure you compare apples to apples
• Define the services provided for the quoted fees
You have a interested buyer – what now?
• Quote too high – you loose the business
• Quote too low –profit margin expense
• No surprises
• Unexpected expenses
Address prior to quoting
Export Control Classification Number (ECCN)
Determine if an Export License is required by any government agency
BIS – State Department - OFACS
Check all parties to the transaction to ensure they are not a restricted party on any list www.bis.doc.gov/complianceandenforcement/liststocheck.htm
Determine ultimate destination and end use of product
Review for Anti-boycott regulations
Product Considerations
• Hazardous regulations
• Food, plants animals
• Commodities regulated by government agencies
• (DEA,FDA, USDA, etc.)
• Temperature sensitive – special equipment
• Marking, labeling, packaging/securing for exports
Payment terms with customer
• Currency
• Payment in advance
• Deposit
• Open account
• Documentary draft
• Letter of Credit
Letter of Credit
Safest for seller, other than cash in advance
Additional cost Guarantee by bank – IF all
stipulations can be met Defines dates Can restrict ports, routing, carriers
INCOTERMS
Internationally accepted standards Pre Carriage – Main Carriage – On Carriage Must name a place
• E Terms (seller's inland - point)
• F Terms (exporting country - place/port)
• C Terms (importing country - place/port)
• D Terms (buyer's inland – port)
http://www.iccwbo.org/incoterms/
Information Required for Quotes
Port/Point of Origin
Port/Point of Destination
Physical dimension of cargo
Gross and net weight
Packaging in compliance (SWPM)
Estimated date of shipment - deadlines
Special handling requirements (oversize)
Preference of routing
Value of cargo
SAMPLE QUOTE
Rates are valid for 30 days unless otherwise noted. Rates are subject to change without notice. We diligently attempt to anticipate all fees; however, any out-of-pocket expenses are for your account. Rates are based on availability of equipment and cargo and do not guarantee service. Rates are subject to change if the commodity, location, weight and/or dimensions offered at the time of quote do not agree with the actual shipment. The above quotation is an offer and does not imply a contractual agreement. Rates including inland freight are based on legal weight and in-gauge dimensions and are subject to availability of equipment and scheduling. Demurrage and per-diem when applicable will be billed according to the steamship line's tariff. We reserve the right to bill FUEL SURCHARGE based on tariff pricing or the national weekly average issued by the Dept of Energy, Energy Information Administration.
Origin Desti-nation
ETA Type Base rate
Surcharges Total rate
Subject to surcharges
Cincinnati OH
Postal 45244
Via Norfolk VA
Dubai UAE
(Port)
40
days
40ft
Cont.
Ocean
$3,024.00
Ocean: BAF 425.00
Doc: 50.00
TSC: 115.00
$3,614.00 Destination
Terminal
Handling
Quote to customer
• Rate will only be good for a specified length of
time
• Quote to customer must include all charges
• Quoted price is used for financing / Letter of
Credit
• Proforma used for official purposes such as
import license
• Destination entry requirements
:Proforma_______________________________________________________
Exporting your cargo – Ready to ship
Ocean or Air Booking cargo
• Cut off date / delivery of cargo
• Cut off date / time documentation Oversized cargo Container vs. Break Bulk Blocking and bracing
• Solid Wood Packing Material (SWPM)
Electronic Export Information Required filing through the Automated
Export System (AES) for Schedule B numbers valued over 2500.00
Purpose
• Export Control
• Statistics Penalty for not filing timely
• $1100.00 per day maximum 10,000 per violation
OCEAN BILL OF LADING
Cargo Receipt Delivery instructions Title documents
• Can be negotiable Terms and Conditions of carriage
Documentation Requirements
• Certifications
• Commercial Invoice
• Packing list
• Certificate of Origin
• Free Trade Agreements
• Product Certificates
• Phytosanitary
• Certificate of analysis
• Consular documentation and legalization requirements
Ensure compliance with destination country regulations
• Through freight forwarder – general information
• Through customer – specific information
• Pre-shipment inspection arrangements
• Quarantine
• Quotas
Ensure compliance with customer’s requirements
•Letter of Credit stipulations
•Contract agreement
•Routing requirements – may designate a specific port, flagged vessel, etc.
Marine Cargo Insurance
• Read the terms listed on the face of the bill of lading
• Carriers have limit of liability and are liable only if they
are found to be negligent• Ocean limit of liability is generally 500.00 per
package• Air limit of liability is generally 9.07 per pound
• General average • All parties (including exporters) involved in the
ocean carriage agree to proportionally share ANY losses necessary to ensure the safety of the voyage
• Voluntary jettison – repairs to vessel – ransom funds• If declared, cargo will not be released without bond or
cash deposit
Recordkeeping
• Exporter/United States Principal Party in Interest (USPPI) also responsible to maintain documents
• USPPI should require copy of AES filing if transmitted by freight forwarder
• Using a third party does not relieve the USPPI of liabilities
• Five years from date of export or last known transshipment or diversion date
Web Export Resources
Export counseling, trade information centerwww.export.gov
``````Lists to check``````On line training videos
www.bis.doc.gov`````Official export and import statistics
www.census.gov/tradeExport-Import Bank of the U.S.
www.exim.govSmall Business Administration
www.sba.gov Country requirements for wood packing materials
www.aphis.usda.gov/ppq/swp/Certified Export Specialist Program (Educational
Institute) www.ncbfaa.org
?????? QUESTIONS ??????
Brian Barber, NCBFAA Education Director (202) 466 0222
[email protected] Jan Fields, LCB, CCS, CCS Savannah GA
(912) 963 [email protected]