Basics of Exporting and Logistics – How to Export Goods Overseas
Basics of Exporting and Logistics – How to Export Goods Overseas
Whether you are new or experienced in exporting, there are seems to always be areas of exporting that may confuse or not be completely clear to the Exporter. For new-to-export Exporters, it could be the Incoterms between seller and buyer, what mode of shipment is best, or documentation/legal issues. For experienced Exporters, it could be a lack of understanding on how to label their cargo to meet a requirement in a country they haven’t shipped to yet, what the optimal routing is to meet their buyer’s requirements, or the best airport/seaport to ship to in order to reduce costs and transit time. This page will go through all areas of Exporting that a new or experienced exporter will need in order to make informed decisions. Your freight forwarder, American Export Lines, is here to assist you along the way with any questions you may have after reading this page.
A Basic Guide to Exporting deals with these issues for those who are new to exporting. This book (pdf) which was created by the U.S. Commercial Service provides the information any such company needs to feel confident about selling overseas. Most of the chapters end with real-life examples in the form of Success Stories that prove it can be done. Below are some additional details that will assist you in understanding how to export goods overseas.
Shipping Your Product Overseas
Handling and Determining Method of Shipping
Talk to your freight forwarder for their advice on whether you should ship by sea, air, rail or a combination of two modes (multimodal). There are many considerations when selecting a method of shipping and specifying the handling of your shipment. Click this link to learn more about determining your method of shipping.
If you are shipping by Sea, we will need to know what type of service you require:
• Consolidation: Also known as buyer’s consolidation, if we are going to consolidate cargo for you at our warehouse and then ship everything out together in an LCL (less than container load) or FCL (full container load) method. For this mode, we need to know if you are going to deliver the cargo to one of our warehouses or if we are picking up the cargo from each supplier. If we are picking up the cargo, we need to know the full pickup address of each location and cargo details.
• LCL (less than container load): This mode is when we are shipping your cargo in a consolidated container with other shipper’s cargo. We need to know if we are picking up from the supplier or if you are delivering the cargo to our warehouse.
• FCL (full container load): We need to know if we are delivering the container to the supplier, we need to know the full address and whether it is a business or residential location. We also need to know if you require an overnight drop of the container (aka drop and pull). Please keep in mind the container will be sitting on a container chassis which makes the bottom of the container 4 feet off the ground.
• RORO (roll-on roll-off): this is generally used for cargo that is drivable and sometimes static (not rolling) and is oversized for containers.
• Heavy-Lift, Break-bulk or Project Cargo: if you have oversized, out of gauge (OOG), and/or complex requirements, we will need to know complete details of the project including cargo details and the start date of the project.
If you are shipping by Air, we will need to know:
• The full name and address of the shipper in order to determine if they are a “Known Shipper” with the TSA. If the shipper is a Known Shipper, then the freight forwarder will be allowed to ship your cargo on a Passenger (PAX) Aircraft which in many circumstances is less expensive than shipping on an All-Cargo Aircraft (Freighter). PAX flights have a maximum allowable height of 63 inches. Learn about the Mandatory Screening of Cargo on Passenger Flights.
• The full address of the cargo location(s), or if you are delivering to our warehouse, please specify this in your request.
• The cargo dimensions (dims), weight of each unit or total unit and # of units (e.g. 10 cartons, 10x10x20 inches, 20kgs/carton OR 2 pallets, 48x40x40, 400kgs/pallet)
• The commodity name and description. We also need to know if the cargo is considered hazardous or not, if so, we require a copy of the MSDS. If the cargo is perishable or has certain temperature requirements, please specify.
Incoterms clarify the obligations of each party (e.g. who is responsible for services such as transport; import and export clearance etc) as well as the point in the shipment process where risk transfers from the seller to the buyer. These are the terms between the seller and buyer. Click here to go through the Incoterms Explained website. These related to terms such as EXW, FOB, FCA, FAS, CFR, CPT, CIF, CIP, DAT, DAP, DDP. Some of these Incoterms are for all modes of transport and others are strictly for sea and inland waterways. The link provided above outlines all of this for you in great detail.
In order to determine what documents are required for the country you are exporting to, and how those documents must be written, please contact us. Some countries require certain documents to be legalized or attested, while others simply require a commercial invoice/pro forma invoice, a packing list and possibly a certificate of origin (COO). Additionally, if the shipment is on an L/C your freight forwarder must be aware of the details of the L/C so they can meet the L/C’s requirements. Certain countries have very stringent requirements on how these documents are to be written, and we are here to verify with our overseas partners who are experts in their respective country, on how those documents are to be written.
Packing Your Products for Shipment
Exporters should keep four potential problems in mind when designing an export shipping crate: breakage, moisture, pilferage and excess weight. View these tips on product packaging for overseas transport. If you need packing services, the more specific you are on exactly what services you need, the faster we can respond with accurate pricing. Some countries have strict requirements on the type of wood (e.g. ISPM 15) that can be used in pallets or packing of cargo.
Learn how to correctly label your shipments to ensure your buyer does not have customs delays at destination because of improper labeling. Certain countries have very strict requirements on how cargo must be labeled. If your cargo is hazardous, there are U.S. requirements for how the product should be labeled and packed as well as how it must be declared on the DGD (dangerous goods declaration) form. Ask us if you are unsure on how to label your cargo.
Insuring Your Shipments
Damaging weather conditions, rough handling by carriers, and other common hazards to cargo make insurance an important protection for U.S. exporters. Although sellers and buyers can agree to different components, coverage is usually placed at 110 percent of the CIF (cost, insurance, freight) or CIP (carriage and insurance paid to) value. We offer ALL-RISK and TOTAL LOSS insurance policies for all modes of transport.
Personal Effects Shipments, Samples and Gifts
For some general considerations and useful links, visit the Personal Shipment FAQ page. For more information, contact your shipper for directions related to private shipments. Some shipments that are samples can be shipped as Personal shipment, depending on the commodity, value, size and destination.