Exporting from the USA to Japan – Opportunities, Market Analysis and Requirements
Japan is one of the world’s most developed and diverse economies, with a consumer driven economy similar to the United States. The leading export categories from the US to Japan are food (corn and soybeans being the top), aircraft and parts, gasoline and petroleum products, machinery, medical instruments (including X ray machines), lab equipment, and pharmaceuticals, which are all in the billions of $USD, but there are many other categories that are in the $USD millions that are still very relevant to many US Exporters.
USA and Japan as Trading Partners
As an Import market for US goods and services, Japan is the United States’ # 2 trading partner as of 2016. As an Export market for Japanese goods and services, the United States is Japan’s # 2 trading partner. Overall, Japan is the United States’ 4th largest trading partner as of 2016 (two way trade).
Major Cargo Seaports and Airports
There are over 100 seaports in Japan, but the majority of cargo goes to a handful of seaports.
Major container seaports in Japan are: Tokyo, Kobe, Osaka, Nagoya, Yokohama, Chiba, Kawasaki, Mizushima, Moji, Tomakomai and Sendai. Some of these ports also contain RORO and Breakbulk terminals. There are many other smaller ports that can handle container, RORO and Breakbulk vessels. The top RORO seaports are Toyohashi, Chiba, and Yokohama.
The major airports in Japan are: Narita (NRT), Haneda (HND), Osaka (KIX), Okinawa (OKA), Fukuoka (FUK), New Chitose (CTS), and Chubu Centrair (NGO).
Japan Import Customs Requirements
Check the Japan Customs Website for basics on Import Requirements. There may be certain permits, licenses or packing and labeling requirements to import your commodity into Japan, ask your freight forwarder to confirm what requirements your cargo requires when exporting to Japan.
Advanced Filing Rule (AFR)
AFR filing for ocean exports to Japan requires vessel operators (VOCC’s) and non-vessel operating common carriers (NVOCC’s) to electronically submit information to Japanese Customs on ocean bound container and less than container load cargo to be loaded on a vessel for final destination to a Japanese seaport no later than 24 hours before departure of a vessel from port of loading. Freight remaining on board (FROB) will not need AFR filing. The Ocean Carrier will file the AFR on the Master B/L (MBL), but the NVOCC is required to file the AFR on the House B/L level (HBL) if a HBL is used.
The AFR data points are submitted to the Nippon Automated Cargo & Port Consolidated System (NACCS) via third party software providers approved by NACCS. Speak with your international freight forwarder to confirm they will be filing AFR on your shipments. The data points required for filing AFR are found on pages 13 and 14 of this pdf by Japan Customs.
If you are meeting with your Japanese customer or partner, please make sure to watch this video on Japanese Business Etiquette Basics.
Opportunities for US Exporters
US Agriculture Exports to Japan – #4 Market for US Ag Exports in 2017. this includes Dairy products (including milk, milk powders and cheese), Fruits, Vegetables including Grains, Legumes, Seeds as well as Meats. Meat Exports from the US to Japan include Beef, Pork, Lamb, Sheep and Goat (as of the writing of this post).
If you are a US food exporter, consider attending FOODEX in Japan https://www.fas.usda.gov/newsroom/foodex-japan-delivers-us-exporters and https://www.jma.or.jp/foodex/en/
The 2020 Tokyo Summer Olympics: Everything from Construction Equipment and Housing, US Olympic Sporting Fitness Equipment and Apparel, machinery, food and spare parts are needed. While this would be a short term opportunity, it can help exporters build relationships with overseas customers and establish their foothold in one of the top US Export markets.
Considerations when Shipping from the USA to Japan
Whether you are shipping Consolidating Freight for Ocean or Air shipping, Full Container Loads (FCL), Less than Container Loads (LCL), Refrigerated (Reefer) Containers, Air Freight, RORO or Breakbulk to Japan, make sure you are aware of all the requirements and issues that may arise which can cause delays and increased cost along the way, anticipation of problems is the key.
Currency Risk: speak with your bank, consultant or financial advisor on how to hedge and mitigate your currency risk when trading with Japan, as the Japanese Yen (JPY) is not a fixed or pegged currency, therefore the USD/JPY is subject to more volatility than other currency pairs.
Japan External Trade Organization (JETRO) provides free consultation, market and regulatory information, and temporary office space to US companies looking to import from, or export to Japan.
Requirements for Exporting from the USA to Japan
Depending on the commodity or commodities you are exporting to Japan, you will need to supply the buyer and/or the bank with the following:
- Commercial Invoice (CI),
- Packing List (PL),
- Certificate of Origin (COO),
- USDA Phytosanitary Certificate or Veterinary Export Health Certificate,
- USDA Food Safety and Inspection Service Certification (FSIS),
- Ocean or House Bill of Lading or Airway Bill,
- Inspection, Verification or Testing Certificate by an independent third party such as SGS, Bureau Veritas, Intertek, Cotecna, or other,
- and any other documentary requirements of the buyer, Japanese Customs, US Customs and/or the Bank if there is an L/C involved.
Some of these documents are to be created by the Exporter, while others are provided to you by your freight forwarder. Some of these documents can either be arranged through your freight forwarder, a documentary services company or through your own logistics department.
Anticipation of potential delays or problems arising from inspections and their ramifications on the export process is critical; therefore make sure the expectations are set in advance on what issues and delays can arise during the shipment process which can also lead to increased costs which are more often than not, the responsibility of the Exporter.
When shipping between the USA and Japan, make sure you partner with an experienced international logistics and freight forwarding company that understands the rules, regulations, documentation and who also has the competitive pricing and reliable and diligent partner in Japan to get your shipments to their final destination without a hiccup.