Are you getting calls for international orders from your Internet site? Is your sales team starting to move toward worldwide distribution? This article summarizes some of the steps any company can take to export your products, expand your manufacturing offshore, and/or broaden your sourcing internationally with minimal difficulties. Transportation spending and Customs/Trade skills are critical to making these things happen without wasting money and time.
Step one: Internal resources: What sort of international trade and transportation skills and knowledge does your team have? Your team probably knows domestic trucking and small package contract management pretty well but it may have never delved into the depths of exporting or Customs issues. In order to do be successful at international shipping you need to know the harmonized classification (schedule B number), the Commerce Control List classification, and the country of origin of the goods you are planning to ship. Each of these elements can be either very simple or quite complex. In order to make international shipments effectively, you need international shipping skills. Whatever skills your team does have, you need to recognize them and build on them. We are offering introductory training again this year at the PARCEL Forum in October.
Step two: Compliance Procedures and Policies: Many companies today start shipping internationally in response to Internet orders or efforts toward sourcing internationally without putting any policies and procedures in place to ensure they are in compliance with import and export laws. This is like running a marathon without training first — this is going to hurt! By establishing internal policies for compliance and control of international importing and exporting, your company will be prepared to “hit the ground running.” For example, if you are planning to ship to Canada or Mexico, your internal procedures should instruct the purchasing department to obtain country of origin information on all parts and components it purchases so that you are able to fill out a NAFTA form identifying which items are US/CA/MX made.
Step three A: Target customers: Maybe you have had potential customers from X country express interest in your products. If you think that shipping to X is a good idea, then you need to do a few things to ensure your products can get to the end user at a reasonable cost and in a reasonable time frame with minimal hassle to them. This means you need to find out whether your products are allowed to ship to the target country, the transportation cost to your customer, and any duties and taxes he/she will have to pay. The authorization to ship is critically important to you and the “landed cost” of the transaction is very important for the end user.
Step three B: International suppliers: Perhaps you are not exporting at this time but international sourcing is your issue. If you are going to be obtaining products from a foreign supplier there are a few key elements you need to consider: classification, duty, and transportation costs. Connecting with a good US Customs broker and forwarder is essential in this process. They can help you define the costs of shipping and duties for the landed cost of the item(s) you want to import. You need to match up the costs you are being quoted by the foreign vendor with what you could obtain on your own.
Step four: Returns: This final step of planning for return shipments to you or to your vendor is often not addressed until it becomes a problem. A wise shipper/importer has a plan in place to handle returning or returned goods. There are a lot of resources to help you such as the Reverse Logistics Association.
Summary: In this article we have reviewed some critical steps that a company needs to take toward global sales and/or sourcing. There are a lot of details and skill needed to minimize transportation and Customs duties and tax costs that make it worthwhile to take a critical look at your company’s staffing and international trade skills to avoid wasted expenses and potential penalties. You need the right information and tools to get your shipping done right the first time! For further details please visit this year’s PARCEL Forum or see my previous online PARCEL articles by visitinghttp://tiny.cc/GoingGlobalArchive.
Step one: Internal resources: What sort of international trade and transportation skills and knowledge does your team have? Your team probably knows domestic trucking and small package contract management pretty well but it may have never delved into the depths of exporting or Customs issues. In order to do be successful at international shipping you need to know the harmonized classification (schedule B number), the Commerce Control List classification, and the country of origin of the goods you are planning to ship. Each of these elements can be either very simple or quite complex. In order to make international shipments effectively, you need international shipping skills. Whatever skills your team does have, you need to recognize them and build on them. We are offering introductory training again this year at the PARCEL Forum in October.
Step two: Compliance Procedures and Policies: Many companies today start shipping internationally in response to Internet orders or efforts toward sourcing internationally without putting any policies and procedures in place to ensure they are in compliance with import and export laws. This is like running a marathon without training first — this is going to hurt! By establishing internal policies for compliance and control of international importing and exporting, your company will be prepared to “hit the ground running.” For example, if you are planning to ship to Canada or Mexico, your internal procedures should instruct the purchasing department to obtain country of origin information on all parts and components it purchases so that you are able to fill out a NAFTA form identifying which items are US/CA/MX made.
Step three A: Target customers: Maybe you have had potential customers from X country express interest in your products. If you think that shipping to X is a good idea, then you need to do a few things to ensure your products can get to the end user at a reasonable cost and in a reasonable time frame with minimal hassle to them. This means you need to find out whether your products are allowed to ship to the target country, the transportation cost to your customer, and any duties and taxes he/she will have to pay. The authorization to ship is critically important to you and the “landed cost” of the transaction is very important for the end user.
Step three B: International suppliers: Perhaps you are not exporting at this time but international sourcing is your issue. If you are going to be obtaining products from a foreign supplier there are a few key elements you need to consider: classification, duty, and transportation costs. Connecting with a good US Customs broker and forwarder is essential in this process. They can help you define the costs of shipping and duties for the landed cost of the item(s) you want to import. You need to match up the costs you are being quoted by the foreign vendor with what you could obtain on your own.
Step four: Returns: This final step of planning for return shipments to you or to your vendor is often not addressed until it becomes a problem. A wise shipper/importer has a plan in place to handle returning or returned goods. There are a lot of resources to help you such as the Reverse Logistics Association.
Summary: In this article we have reviewed some critical steps that a company needs to take toward global sales and/or sourcing. There are a lot of details and skill needed to minimize transportation and Customs duties and tax costs that make it worthwhile to take a critical look at your company’s staffing and international trade skills to avoid wasted expenses and potential penalties. You need the right information and tools to get your shipping done right the first time! For further details please visit this year’s PARCEL Forum or see my previous online PARCEL articles by visitinghttp://tiny.cc/GoingGlobalArchive.
