Delivering Your Goods
The difficulties you must overcome do not end with the transaction and the website. You still have to deliver the items to the customer, who may be thousands of miles distant and subject to various restrictions. You must be aware of the packaging, labeling, documentation, and insurance requirements, and laws when sending goods internationally. Ascertain that the item is:
• Appropriately packed to ensure that it arrives in excellent shape
• Properly documented to fulfill U.S. and international government regulations, as well as proper collecting criteria
• Damage, loss, pilferage, and delay are all covered by insurance.
Freight Forwarders
An international freight forwarder is a company that transports cargo from one country to another. These agents are knowledgeable with the import rules and regulations of foreign nations, as well as the export restrictions of the United States government, various shipping methods, and essential documentation for international trade. The International Air Transport Association (IATA) licenses freight forwarders to handle air freight while the Federal Maritime Commission licenses freight forwarders to handle ocean freight.
Freight forwarders advise exporters on freight costs, port charges, consular fees, expenses of specific documents, insurance costs, and the freight forwarders' own handling fees while creating price bids. They can suggest packaging methods that will keep the goods safe throughout travel, or they can arrange for the goods to be packaged at the port or loaded into containers. Freight forwarders can reserve the appropriate space on a vessel, airplane, rail, or vehicle if the exporter chooses. The cost of their services should be factored into the total price charged to the consumer.
Freight forwarders should examine all documentation once the order is ready for dispatch to confirm that everything is in order. Freight forwarders can also prepare the bill of lading and any other particular documents necessary, as well as file it electronically in the Automated Export System (AES). They can send the documentation to the vendor, buyer, or a payment bank after shipping. Freight forwarders can also work with customs brokers in other countries to verify that the products meet customs import paperwork requirements. Customs transactions are confined to those involving the entrance and admissibility of product, its classification and value, the payment of duties, taxes, or other assessed or collected charges, and the refund, rebate, or drawback of those costs.
Forwarders are not essential, although they can be quite useful. Some of the biggest logistics firms, such as UPS and FedEx, also function as freight forwarders and customs brokers. Visit ncbfaa.org for more information about the National Customs Brokers and Freight Forwarders Association of America. They will refer you to brokers or members in your region who can help you transport specialty items.
Packing
Your organization should be aware of the requirements for packed goods when exporting internationally. When building an export shipment crate, keep four possible issues in mind: breakage, dampness, pilferage, and extra weight.
Because buyers are generally conversant with international port systems, they will occasionally specify packing needs. If the buyer doesn't specify, make sure the items are prepared according to the following guidelines:
• When feasible, pack in sturdy containers that are properly sealed and filled.
• Regardless of container size, make sure the weight is adequately distributed to provide effective bracing.
• Load products onto pallets and, if feasible, into containers.
• Use moisture-resistant materials for packaging and packing filler.
• Protect items using straps, seals, and shrink-wrapping.
• Follow any hazardous materials packing standards unique to the product.
• Check for fumigation and chemical treatment compliance with wood packaging documents and marks.
Containers purchased from airlines or private leasing firms are one typical way of transportation. The size, material, and construction of these containers varies. They can hold a wide range of items, although they're ideal for common package sizes and shapes. In addition, refrigerated and liquid bulk containers are frequently available. Some containers are little more than semitrailers that have been pulled off their wheels, loaded onto a ship at the export port, and then moved to another set of wheels at the import port.
Air shipments usually do not require as much packing as ocean shipments, but they should still be sufficiently safeguarded, especially if they are likely to be stolen. Standard domestic packaging is often appropriate if the product is sturdy and display packaging is not a concern. In other cases, tri-wall construction boxes or high-test cardboard (at least 250 pounds per square inch) are recommended.
Finally, volume and weight influence transportation costs. To decrease volume and weight while reinforcing the packaging, specially strengthened and lightweight packing materials have been created for export. The right materials may help you save money while also ensuring that your items are correctly packaged. If you are unable to pack the things yourself, you should employ a professional business to do so.
Labeling
Specific markings and labeling are used on export shipping cartons and containers to:
• Meet shipping requirements
• Ensure correct handling
• Hide the identity of the contents
• Assist recipients in identifying shipments
• Ensure compliance with environmental and safety standards
For simple identification by receivers, the foreign buyer normally determines which export markings should appear on the shipment. For transportation, products may require several marks. For example, on shipping boxes, exporters must include the following markings:
• Mark of the shipper
• Country of origin (in your example, "United States of America").
• Labeling of weights (in pounds and kilograms)
• Package count and case size (in inches and millimeters)
• International visual symbols (handling markings)
• Cautionary marks (in English and the destination country's language), such as "This Side Up" or "Use No Hooks"
• Entry point
• Hazardous materials labels (i.e., the International Air Transport Association and the International Maritime Organization's universal symbols)
• Ingredients (where appropriate, also included in the target country's language)
Documentation
Your organization should carefully consider entrusting the papers required for exporting to a freight forwarder. Forwarders are experts in this field. Several papers are often used in exporting, but the ones necessary in a given transaction are determined by the regulations of the US government and the importing country's government.
Because minor inconsistencies or omissions might prohibit commodities from being exported, documentation must be accurate to avoid nonpayment or even seizure of the exporter's products by US or foreign customs officials.
Collection documents are subject to strict time constraints, and if the time period has passed, the bank may refuse to honor the document. The bulk of documentation is standard for freight forwarders and customs brokers, but you, as the exporter, are ultimately responsible for the accuracy of the needed documents.
The amount and kind of paperwork that the exporter must deal with varies depending on the shipment's destination. Because each country's import requirements differ, the exporter must ensure that the necessary documents is provided.
For the most up-to-date international import information, contact your local US Commercial Service office.
Air Waybill
It is never negotiable because it covers an air freight shipment. You should be very careful dealing with it. It would be advisable to keep your payment terms in advance as an exporter
Bill of Lading
A contract between the products' owner and the carrier (in the case of domestic shipments). While the products are in transit, the latter might be bought, sold, or swapped. To take possession of the goods, the client normally needs an original bill of lading as proof of ownership.
Commercial Invoice
A bill from the vendor to the customer for the products. When evaluating customs charges, several countries utilize business invoices to ascertain the genuine worth of items.
Governments that utilize the commercial invoice to restrict imports will frequently prescribe the invoice's shape, content, and quantity of copies, as well as the language to be used.
Consular Invoice
In certain nations, this is a required document. Describes a shipment of products and includes details such as the consignor, consignee, and shipment value. Customs officers in the country utilize it to check the shipment's value, amount, and type. It is authenticated by a foreign country's consular authority.
Certificate of Free Sale
Certain types of items are required in various nations. This certification, which certifies that the items you wish to export have been sold in your state, is normally provided by your state government.
Certificate of Conformity
Some governments demand it, generally for certain types of produced items. An approved third party must evaluate and test the product before it may be exported.
Certificate of Origin
Some countries demand it. A signed declaration of the export item's provenance. A semiofficial institution, such as a local chamber of commerce, frequently validates certificates of origin.
Even though the business invoice has identical information, a certificate may be necessary.
NAFTA Certificate of Origin
If the items are NAFTA eligible and the importer is claiming zero-duty preference under NAFTA, this is required for products transferred between the signatory nations of the North American Free Trade Agreement (Canada, Mexico, and the United States).
Inspection Certification
Some buyers and nations demand that you attest to the specs of the products you're shipping. A third party, generally an independent testing agency, conducts the inspection.
Dock Receipt/Warehouse Receipt
When a domestic carrier transports an export item to the port of embarkation and then leaves it with the shipping line for export, this form is used to transfer accountability.
Destination Control Statement
This symbol appears on the commercial invoice as well as on the air waybill or bill of lading to inform the carrier and any foreign parties that the item may only be shipped to specific locations.
Shipper’s Export Declaration
It is a source document for official US export data and is used to manage exports. You, your freight forwarder, or any qualified third party you designate must file Shipper's Export Declarations (SEDs) online. When the value of the commodities categorized under anyone's Schedule B number (the four-digit US extension to the six-digit code under the Harmonized Tariff System) reaches $2,500, SEDs are required for shipments. The Foreign Trade Division of the United States Census Bureau is in charge of this document, and AESDirect (aesdirect.census.gov) allows exporters to file SEDs electronically for free. The SED is frequently created as a result of another document: the shipper's letter of instructions.
Export License
A government document that allows certain items to be exported in precise quantities to a specific destination. Some nations may demand this paperwork for most or all exports. It may only be necessary in exceptional instances in other nations.
Export Packing List
A far more extensive and insightful packing list than a typical domestic packing list. It lists the contents of each container and specifies the packaging type, such as box, crate, drum, or carton. It also displays each package's specific net, tare, and gross weights and measurements (in both US and metric systems). Package marks and references should be shown to help identify the package. The shipper or forwarding agency uses the list to assess the total shipment weight and volume, as well as if the correct goods is being shipped.
Additionally, customs authorities from the United States and other countries may utilize the list to inspect the consignment.
Insurance Certificate
Used to reassure the consignee that the goods will be covered by insurance if it is lost or damaged during transportation.
Shipping
For both domestic and international orders, transportation is handled in the same way. On a domestic bill of lading, export marks are appended to the usual information. . To discover the best way of international shipment, you might want to talk with a freight forwarder.
You can book space on the carrier far in advance of the actual shipment date because carriers are frequently employed for large and bulky packages. The booking contract is the name given to this reservation.
International shipments are increasingly made under a multimodal contract on a bill of lading. The multimodal transit operator (often one of the carriers) is in control of the complete transportation from the plant to the ultimate destination.
When deciding on the method of international shipping, the cost of the cargo, the delivery timetable, and the overseas buyer's accessibility to the transported product are all considerations to consider.
Lower domestic shipping costs (e.g., using a local airport instead of a coastal harbor) and faster delivery times may balance the higher cost of air carriers. These elements may provide an advantage to the US exporter over its competitors.
Before shipping, your organization should confirm the destination of the items with the overseas customer. Buyers may request that the items be delivered to a free trade zone or a free port, where they will be duty-free.
Two types of insurance.
Weather damage, poor handling by carriers, and other typical cargo concerns make exports insurance a crucial safeguard for US exporters. To insure the items you export, your shipper or freight forwarder will engage with an insurance firm. However, a second type of insurance is also recommended: It is necessary to guarantee the sale against nonpayment.
Credit insurance is increasingly required by the buyer's lender and other financial institutions listed in your selling terms to cover the risk of nonpayment. Contingencies include buyer or lender default, political events, or foreign currency catastrophes that jeopardize your payment.
Insurance for Cargo
If the terms of the sale state that you are responsible for insurance, your company should either obtain its own policy or pay a fee to have the cargo insured by a freight forwarder. If the foreign buyer is accountable under the conditions of the transaction, you should not assume (or even take the buyer's word for it) that enough insurance has been arranged. Damage to the cargo might result in a significant financial loss for your organization if the buyer fails to secure proper coverage. Marine cargo insurance protects shipments by sea. Marine cargo insurance may cover air shipments, or insurance may be acquired directly from the airline.
Cargo insurance protects export shipments against loss, damage, and delays in transit. Carriers' liability is frequently limited by international agreements. Furthermore, the coverage differs significantly from that available in the United States. In line with the conditions of sale, either the buyer or the seller may make insurance arrangements. For further information, exporters could contact international insurance carriers or freight forwarders. Although sellers and purchasers can agree on various components, coverage is often set at 110 percent of the CIF or CIP (cost, insurance, and freight) value.
Insurance for Export Credits
Exporters who protect themselves against nonpayment receive at least four benefits.
To begin with, insurance decreases or eliminates the danger of a monetary loss from an export transaction. The US Export-Import Bank (Ex-Im Bank) bears 90 to 100 % of the risk associated with commercial and some political risks, such as currency inconvertibility, insolvency, lengthy default, or war. Second, export credit insurance enables exporters to provide favorable loan conditions to qualified foreign customers. When a buyer's lender is unable or unwilling to lend due to risk, Ex-Im Bank's export credit insurance covers the risk, allowing the lender to issue credit. In that instance, the buyer or buyers will be able to obtain additional insurance in the future.
A third advantage is that when a lender's line of credit is insured, a company's working capital cash flow increases. Ex-Im Bank insurance converts an exporter's overseas accounts receivables into government-insured receivables. Exim.gov maintains a list of qualified participating lenders. Fourth, exporters have access to new markets through the Ex-Im Bank.
Payment Policies and Terms
Short-term insurance covers non-capital products, components, raw materials, replacement parts, and most services for a period of 180 days or less. Ex-Im Bank insurance covers cover consumer durables, capital items, and bulk agricultural commodities for up to 360 days. The items must be transported from the US and include at least 50% American content (excluding markup).
Medium-term insurance protects values under $10 million for tenors up to five years and covers up to 85% of the contract value. International purchasers of capital equipment or associated services are eligible for this financing.
Credit protection for shipments to a single customer is provided by Single-Buyer insurance. Premium rates are determined by the tenor, buyer type, and risk rating for the buyer's nation.
Multi-Buyer insurance allows companies to cover all sales to qualified overseas purchasers who are given "open account" credit conditions. Exporters with an Ex-Im Bank or a Small Business Administration (SBA) working capital loan receive a 25% discount on Ex-Im Bank's short-term multi-buyer export credit insurance. The popular Express Insurance program from Ex-Im Bank features a simplified application, insurance quotation, and buyer credit approvals up to $300,000 within 5 business days.
Policies of Lenders
Ex-Im Bank provides insurance coverage for financial institutions that may help exporters sell their goods. A Bank Letter of Credit policy protects banks located in the United States from losses on irrevocable letters of credit used to fund US exports. Ex-Im Bank's Bank Letter of Credit, for example, will cover 95 to 100 percent of a foreign bank's failure to make payments or reimbursements.
Lenders who finance overseas buyers of U.S. products and services for less than a year are protected by a program called Financial Institution Buyer Credit. For private-sector purchasers, the policy covers 90 % of commercial risks and 100 % of political risks.
To learn more about SBA or Ex-Im Bank-backed comprehensive risk insurance, contact your lender or export finance manager at (800) 565-3946 or visit exim.gov/smallbusiness.
Tariffs
Because tariffs, port handling fees, and taxes may be expensive, it's critical to think about how they'll affect the final cost of your goods. Tariffs are usually paid by the importer. Nonetheless, the buyer's willingness to pay for your goods will be influenced by these expenses. By registering to access a specific database on export.gov, you may compute tariffs and taxes for most goods to most nations.
The Biggest Shippers
Exporters now have access to a wealth of international shipping firms. They now provide aid with shipping documents, warehousing in the international market, and, in certain circumstances, cash collection from the overseas customer, in addition to conveying bulk freight.