Risk for Export Import Business - Quick Guide

1.Default or Non –acceptance :

When you deal in DA/DP bank takes the guarantee of your documents, even so, what if buyers constraint to approach for custom clearance of the container or if he constraint to collect the document from bank than its clearly means a  total waste of product or in case they might ask for huge discounts.

Solution : Apply for Credit Insurance and get NOC from Buyer with a clause of authority to bring goods back, get it destroyed or park in the custom bonded warehouse (Duty and Demurrage Free zone at port)

2. Return :

If buyers constraint the acceptance of the goods, there is huge charges to return back the goods , if the product is perishable it would damage the product.

Solution: Good Credit Insurance companies also provide the cost to return back the goods.

3.Abroad Port Loss :

Reefer container per day charges is high so there is again risk.

Solution: As above, but remember to take action fast because credit insurance companies will not pay the above invoice value. If full value of goods got damaged then it would not be possible to recover.

4.Demurrage:

Demurrage charges will take place because of the container usage within the terminal beyond the free time period.

Solution: As Above

5.Detention charges:

Shipping lines requires container in time so if not given they ask for the detention charges

Solution: Normally 14 days free detention time is given to provide container back to the shipping line buy you may ask to get it extended. One can easily get it extended to 21 days.

6.Vessel Sink /Delay :

Vessel can sank or there may be Delay in delivering the goods to buyers

Solution: Marine Insurance - ICC Cover A - Covering all risk 

7.Theft of Goods :

Goods can be stolen from containers if action is not taken to retrieve them on time.

Solution: Marine Insurance - ICC Cover A - Covering all risk

8.Currency Fluctuation:

Buyer gives Purchase Order in USD, exporter quote today but conversion will be done when exporter receives the funds.

Solution: Exporter may get Forward Cover from Bank. So bank pays according to the quote made irrespective of currency fluctuations

9. Political Risk:

Due to Political ideological differences between countries, there could be a sudden rise in import duties or major change in the free trade agreement

Solution: ECGC Credit Insurance provides the coverage for political and commercial risk in trade

10. War Risk:

Due to war , export import trade may get affected

Solution: Keep yourself updated with current affairs news, insurance co. also covers War Risk

11. Sudden Ban:

Commercial wing / Ministry of Commerce department of any country can temporarily ban of products to safeguard the interest of the country 

Solution: As per point 9

12. Payment Scam :

Daily fraud buyer comes up with new ideas to cheat innocent exporters

Solution: Get yourself upgraded with Exim Knowledge and have a true mentor to guide you

Barai Overseas provide the complete advanced solution for all the above Exim Risk