International Trade Operations
Operation of Foreign Trade
What Channels Exist in the International Market?
Distribution channels provide critical links between manufacturers and consumers. The optimal distribution systems are flexible and are able to adjust to market conditions. In general, companies use more than one distribution system. These include:
Do We Need an Intermediary?
Exporting firms require the services of intermediaries as concerned to gain knowledge of the target market, to distribute their products when they are diverse and numerous, or simply because it is the best option that has to sell its products.
The exporter may contact the following brokers:
- Foreign Buyer: A natural or legal person who buys on behalf of a company in the country.
- Merchant: An international operator who buys the home country, takes possession of the goods (assuming the risk), and sells to other countries.
- Broker: A typical intermediary. Agrees to a seller to a buyer from different countries in exchange for a commission or a fixed payment.
- Agent: A person or company that deals with placing the export products in exchange for a commission.
- Export House: Acts as the export department of a company selling abroad on behalf of this.
- Trading Company: A general trade company, which operates in many countries, establishing an international sales network. It is also engaged in import and possesses all kinds of products. It specializes in products (raw materials) and markets. Provides financing to exporters.
- Export Consortium: An independent entity owned by a group of companies, their small size or lack of experience in international activities, does not export on their own. The Consortium is not only responsible for logistics and export procedures, but also the contacts and negotiations with customers, while member companies specialize in production.
Who Can Help Me with Export-Import Logistics?
Logistics services for international trade meet the needs generated by the distance – geographical and cultural – between buyers and sellers, regulatory requirements in different countries, the combination of different means of transport, storage, packaging, among others.
Among the services required by foreign trade, we have:
Storage, Transport, Maritime Agency, Customs Agency, Sending and receiving documents and certificates express, Obtaining special licenses, Billing.
Choosing the Right Transport
The definition of the type of transport to export a product depends on such factors as the nature of the relevant product (perishability, chemical, frailty, danger, etc.), weight, volume, price, starting point or origin and point of destination, cargo consolidation, packing, packaging, routes, freight, among others.
1. Load to be transported
– Type of load
— Nature (fragility, danger, dimensions, weights, etc.)
— Risk shipments
Preparation to carry the load
— Packaging (international shipments, product characteristics, mode of transportation).
— Marked (characteristics, types of marks pictorial / dangerous).
— Unitization (palletizing, containerization).
2. Modes of transport
– Global network of transportation (rail, road, sea, air, multimodal).
Mode Structure
** Features (rail, road, air, sea, lake, multimodal).
** Means of transport (cars, trucks, boats, and aircraft).
** Type of service (full or partial line, leased, multimodal).
** Contracts and documents.
3. Distribution Costs
** Chain of physical distribution.
** Packing and marking, storage, handling, transportation, insurance, customs duties, etc.
** Administrative costs and services
4. Variables in the Choice of Transport Mode
Contracts and prices. ** Weight/volume ratio shuttle service. ** Cost vs. Methods of election time. ** Rates and freight distribution costs, integrated logistics.
1. Land Transport
Road transport is the only means of transport capable of self-service “door to door”
2. Air Transport
Here are two types of service. The generated regular rates for general cargo and special rates
Leased service used to load current flows
3. Maritime Transport
It offers regular service line components whose costs are base rates, surcharges, and discounts. Under this arrangement can be made freight prepaid, freight collect, and freight.
4. Multimodal Transport:
It is the combination of two or more modes indicated. Containers are used to facilitate transfer from one mode to another
5. Intermodal Transport:
It is the articulation between different modes using a single load measurement (usually containers), to make faster and more effectively trans-shipment of materials and goods.
Do I Need a Customs Broker or Freight Forwarder?
- Bill of lading or document duly endorsed for the purposes of conducting the study.
- Commercial Invoice in original or copy.
- Expense account (if applicable).
- Policy or Certificate of Insurance.
- Certificates of Origin or other necessary documents.
- Affidavit of commodity prices.
Other documents or materials that may be necessary
Export-Import: Common Problems with Documents
** When you export will ask five (5) bills “original” means that you will get copy and putting a stamp that says “ORIGINAL”
** If a perishable product export such as fruits, flowers, fish, or similar, make sure you have the quota of the respective space a few weeks in advance.
What Insurance Protects My Goods?
The goods can be protected by cargo insurance. Cargo insurance in the insurer assumes responsibility for damage or losses that may occur during transfer of cargo
In this issue there are two causes of loss of load
Fortuitous result of bad weather, geography (obstacles on the tracks, etc.).
Predictable, are losses that can be avoided by certain practices in the cargo handling (packaging, handling, protection against water and humidity, etc.). These, you see may be due to: theft, handling and stowage, and losses from salt water or fresh water.
Types of Faults
Particular fault: acts of God and take the property on which it occurs. An example is when goods are broken, stained, and so on. water or other products during transport.
General Average is a loss voluntarily. This starts when the merchandise must be removed to save a ship. In this case the loss is borne by all parties.
War and/or strike: both are excluded in the common policies but can include clauses under British or French system.
Duration and Coverage Insurance Policy
- Policy for Travel or Individual Policy: covers a single trip, from the time of shipment. You can include transshipments if stipulated in the contract.
- Floating Policy: provides the general conditions of insurance, without stating the particulars of each consignment to be met. The insured is obliged to inform the characteristics of each shipment.
- Open Policy: similar to floating policy but does not require issuance of a formal policy. The insured has the right to apply especially when there is contention.
Factors to Consider When Hiring an Insurance Policy
- Risks: Determine the probability of the possible risk, the level of damage that may occur, and the liability of the carrier.
- Value of Load: taking into account the principle of compensation, that claim is received by the avoid economic damage to the insured. At this point, it is important to determine the insured value. This value must be equal to the value of the load
Quality and Certifications: Where to Get It?
Quality is very important at the time the customer decides to purchase the property
Quality Expectations
To meet consumer demands and the market is necessary to monitor the quality demanded by the customer
International Quality Standards
International quality standards set specifications which allows the client application to discriminate specific features or product quality, and prefer those that ensure that quality
These standards are approved by a regional or international recognized standards and are available to the public.
Certification
Certification is the process by which an accredited institution confirms the ability of a company or product to meet the requirements of a standard.
The purpose of certification can be:
— Quality control process of a company
— Features a product
Types of Standards
-Green: These rules may be mandatory or voluntary. Apply to export and import.
-Management: the most common are the ISO
-Seal CE: The CE is one of the most recognizable labels in the European Community and the products bearing this seal can move freely without requiring additional tests or modifications.
Is There Insurance to Protect Against Non-Payment?
Secrex is the first company specializing in credit insurance and guarantees in Peru
- Surety:
It aims to guarantee, jointly and severally, under current legislation
- Credit Insurance Export
It covers loans made by financial institutions and banks to finance exports, as well as those granted by exporters to commercial and political risks.
– Guarantee policy to financial institutions (pre-arrival).
— Credit Policy seller (exporter
- Domestic Credit Insurance
Insurance that is designed to ensure the insured the payment of claims to have in their favor when there is insolvency of their debtors.
How to Choose a Supplier from Abroad?
In the first category, the most important factors in selecting a provider focused on the evaluation of price and delivery terms.
In the second should be necessary to evaluate suppliers based on other factors, operating costs, quality, and shelf life
- Standardized goods: foodstuffs, raw materials, general machinery.
- Non-standard goods: machinery, equipment, and special industrial installations.
Is it the Same to Import Raw Material Inputs and Fixed Assets?
Therefore we must examine these factors in some cases:
— Analysis of offer, Factor Prices, Conditions Monetary, Analysis Cost