| Transporting Goods Internationally is the ultimate PDF for those looking to break into the Exporting market. Published by Infomat Inc., our editors help entrepreneurs plan and navigate their way to industry success! ABSTRACT
Transporting Goods Internationally Now that financing has been
arranged, steps must be taken to ensure that the goods for export
are packed and shipped properly to reach their destination. When
transporting goods internationally, proper documentation and
correct packaging are critical to the export process.
One of the main differences between selling domestically and
exporting is the documentation required. Providing proper
documentation with your shipments is essential, if the goods are
to arrive safely and on time.
Although the paperwork involved in exporting may be more
burdensome and costly than that required for domestic sales, it
should not deter you. Consider the case of Hood Equipment Inc.
of Iron River, Wisconsin:
"We began exporting our forestry equipment in 1977. Now
exports amount to 40 percent of our sales. While export
documentation requirements can be time consuming, 40 percent of
our sales depend on it so we have to do it," says export manager
Joyce Hood. Ms. Hood credits her company's international freight
forwarder as "a great help."
THE ROLE OF THE FREIGHT FORWARDER
The international freight forwarder acts as an agent for the
exporter in moving cargo to the overseas destination. These
agents are familiar with the import/export rules and regulations
of foreign countries, methods of shipping, United States
government regulations and the documents connected with foreign
trade.
Freight forwarders can assist with an order from the start
by advising the exporter of the freight costs, port charges,
consular fees, costs of special documentation and insurance costs
as well as their handling fees -- all of which help in preparing
the pro-forma invoice and price quotations. Freight forwarders
may also recommend the best type of packing for protecting the
merchandise in transit; they can arrange to have the merchandise
packed at the port or containerized. The cost for their services
is a legitimate export cost that should be figured into the price
charged to the customer.
When the order is ready to ship, freight forwarders should
be able to review the letter of credit, commercial invoices,
packing list to ensure that everything is in order. Freight
forwarders can also reserve the necessary space on board an ocean
vessel, if the exporter desires.
The exporter may ask the freight forwarder to make
arrangements with the customs broker to ensure that the goods
comply with customs export documentation regulations. In
addition, they may have the goods delivered to the carrier in
time for loading. Freight forwarders may also prepare a bill of
lading and any special required documentation. After shipment,
they can forward all documents directly to the customer or to the
paying bank.
In preparing your goods for international transport, you
must first determine what mode of transport you will use. When
shipping to Mexico and Canada, land transportation may be the
preferred method of transport. Other forms of international
shipments are sea and air.
Maritime shipping is almost always slower and less expensive
than air. However, an exporter must factor in the additional
costs of sea freight, such as surface transportation to the dock.
Another factor is the time value of money: payment may not be
made until the ship reaches its destination -- ocean freight can
be significantly longer than air freight. Your international
freight forwarder can assist in weighing the pros and cons of
different modes of transportation.
Once you have decided on the best mode of transporting your
goods, you must begin to compile the necessary documents.
DOCUMENTATION
Export Documentation Checklist -- Documents Prepared Before the
Shipment
Commercial Invoice/Consular Invoice
After the pro-forma invoice is accepted, the exporter must
prepare a commercial invoice. The commercial invoice is
necessary for both the exporter and importer.
The exporter needs the commercial invoice to prove ownership
and secure payment. The description of the goods on the
commercial invoice must correspond exactly to the description in
the letter of credit or other method of payment. There can be no
exceptions.
The importer needs the commercial invoice since it is often
used by Customs authorities to assess duties. For this reason,
it is common practice to prepare a commercial invoice in English
and in the language of the destination country. The freight
forwarder can advise you when a translated copy is necessary.
Similar to a commercial invoice, a consular invoice is
required by certain countries. The consular invoice must be
prepared in the language of the destination country and can be
obtained from the country's consulate, and often must be
"consularized."
In some countries, the commercial invoice must be prepared
on a special form known as a "customs invoice." Your importer
may request this of you.
Export License
Export controls are based on the type of goods being shipped
and their ultimate destination. Most exports do not require a
license, per se. Technically, most exports are shipped under a
"general" license which does not require an application.
Should your particular export be subject to export controls,
then a "validated" license must be obtained. In general, your
export would require a "validated" license if export of the goods
would: threaten United States national security; affect certain
foreign policies of the United States; or create short supply in
domestic markets. Check with the U.S. Department of Commerce's
(DOC's) Bureau of Export Administration (BEA) to determine if
your product may be subject to export controls (see Part II, The
Exporter's Directory).
Shipper's Export Declaration (SED)
The most common document used by exporters is the Shipper's
Export Declaration (Form 7525-V), for mail shipments valued at
more than $500, and required for other shipments valued at more
than $2,500. In addition, a SED must be prepared for all
shipments covered by an Individually Validated Export License
(IVL), regardless of value. The SED enables the Bureau of the
Census to monitor for statistical purposes the kinds of products
being exported from the United States. The SED must be presented
to the carrier before the shipment departs.
A sample SED follows:
A Shipper's Export Declaration Form 7525-V cannot be reproduced
here. The form is available through the Superintendent of
Documents, Government Printing Office, Washington, DC 20402 and
local Customs district offices.
Three items appearing on the SED may cause confusion:
Item 14, "Schedule B Description of Commodities"
You will need to determine the official description of the
commodity you are shipping by obtaining a copy of the United
States government publication entitled, Harmonized
System/Schedule B Statistical Classification of Domestic and
Foreign Commodities Exported from the United States and then
transfer the appropriate description onto the SED. This is
available from the Government Printing Office and from most
freight forwarders.
Item 21, "Validated License No./General License Symbol"
If your product for export is controlled, the "validated"
license number is inserted in this space. If you are exporting
under a "general license," one of eight possible "General License
Symbols" must be noted. The three most commonly used symbols
are:
G-Dest (General Destination): authorizes the export of
any items not requiring a validated license
GLV (General License Limited Value): authorizes the
export of a single shipment of limited-value items
GTE (General License for Temporary Export): authorizes
the export of items for trade shows, training or temporary use
abroad
Item 22, ECCN (Export Control Commodity Number)
Only necessary when a "validated" license is required, the
ECCN is the number assigned to your commodity from the Bureau of
Export Administration's Commodity Control List. This special
number must be supplied on the SED.
Shipper's Export Declaration
SED forms can be obtained through international freight
forwarders, the Government Printing Office or local Customs
district offices. The "Exact Way to Fill Out the Shipper's
Export Declaration" is available from the Bureau of the Census,
Washington, DC 20233.
Certificate of Origin (where applicable)
Although the commercial invoice may contain a statement of
origin, some countries (particularly those subject to certain
free trade treaties, such as Canada or the Caribbean Basin)
require Certificates of Origin. Certificates of Origin allow for
preferential duty rates if the exporter's country has an
agreement with the importer's country to allow entry of certain
products at lower tariffs.
Export Packing List
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 U.S. and metric systems). Package markings
should be shown along with the shipper's and buyer's references.
A copy of the packing list should be attached to the outside of a
package in a waterproof envelope marked "packing list enclosed."
The list is used by the shipper or forwarding agent to determine
the total shipment weight and volume and whether the correct
cargo is being shipped. In addition, customs officials (both
U.S. and foreign) may use the list to check the cargo. The
original packing list should be forwarded along with your other
original documents in line with the conditions of sale.
Insurance Certificate
If the exporter is providing insurance, a certificate will
be needed confirming the type and amount of coverage for the
goods being shipped. Normal accepted practice for coverage is
110 percent of the CIF value. This certificate should be made in
negotiable form and must be endorsed before submitting to the
bank.
Inspection Certificate
Many foreign purchasers request that the seller certify that
the goods being shipped meet certain specifications. This
certification is usually performed by an independent inspection
firm.
Documents Used During the Inland Movement of the Goods
Shipper's Instructions
As an exporter, you are responsible for providing your
freight forwarder with the necessary information regarding your
shipment. The more details you provide, the greater the chances
of your goods moving problem free. Your freight forwarder can
provide you with a commonly used form for noting instructions.
Inland Bill of Lading
Inland bills of lading document the transportation of goods
between inland points and the port from where the export will
emanate. Rail shipments use "waybills on rail." "Pro-forma"
bills of lading are used in trucking.
Delivery Instructions
This document is prepared by the freight forwarder giving
instructions to the trucking or railroad company where the goods
for export are to be delivered.
Dock Receipts
This document transfers shipping obligations from the
domestic to the international carrier as the shipment reaches the
terminal.
Bill of Lading/Air Waybill
Bills of lading and air waybills provide evidence to title
of the goods and set forth the international carrier's
responsibility to transport the goods to their named destination.
There are two types of ocean bills of lading used to
transfer ownership:
- Straight (non-negotiable): provides for delivery of
goods to the person named in the bill of lading. The bill must
be marked "non-negotiable."
- Shipper's Order (negotiable): provides for delivery of
goods to the person named in the bill of lading or anyone
designated.
The shipper's order is used with draft or letter-of-credit
shipments and enables the bank involved in the export transaction
to take title to the goods if the buyer defaults. The bank does
not release title to the goods to the buyer until payment is
received. The bank does not release funds to the exporter until
conditions of sale have been satisfied.
When using air freight, "air waybills" take the place of
bills of lading. Air waybills are only issued in non-negotiable
form, therefore the exporter and the bank lose title to the goods
once the shipment commences. Most air waybills also contain a
customs declaration form.
PACKAGING
Goods shipped for export require substantially greater
handling than domestic shipments. The exporter must pack the
goods to ensure that the weight and measurements are kept to a
minimum, breakage is avoided, the container is theft proof, and
that the goods do not suffer the stresses of ocean shipment, such
as excess moisture.
In addition to proper packing, the exporter should be aware
that certain markings are necessary on goods transported
internationally. Some countries require that the country of
origin be marked on the outside of the container, and even have
regulations as to how the mark of origin should appear.
The second type of marking with which the exporter should be
familiar is labeling. Food and drugs must often carry special
labeling as determined by the laws of the country of destination.
Third, certain "shipping marks" must appear on the outside
of the package. The weight and dimensions should be visible and
any special instructions should be shown, and you may want to
repeat these instructions in the language of the importer's
country.
If your business is not equipped to package your goods for
export, there are export packaging companies which can perform
this service for you. Ask your international freight forwarder
for a list of export packaging companies in your area.
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PRODUCT DETAILS
Published: January 2007
Region: USA
Format: Editorial
SKU: infpu0001755 |
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