EXPORTS - GENERAL. Updated: February, 2013
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1 EXPORTS - GENERAL Updated: February, 2013
2 In our air freight division each of our offices is licensed as an IATA (International Air Transport Association) Agent with the exception of our Hong Kong office. We are not licensed as an IATA agent in our HKG office. In our ocean freight division Mallory Alexander International Logistics is licensed by the FMC (Federal Maritime Commission) as freight forwarder and NVOCC (Non Vessel Operating Common Carrier). We operate our NVOCC in the name of Mallory Transportation System. 2
3 Our Responsibility Dispatch shipments on behalf of others to facilitate shipments by common carriers. Coordinating Inland Transportation to airports/ports Booking or Confirming Space with carriers Arranging Cargo Insurance Clearing shipments in accordance with United States Government Export Regulations Preparing Export Bills of Lading or Air waybills Preparing Export Documentation to meet requirements of Foreign Governments Preparing Banking Documents Giving Expert advice to Exporters 3
4 Most exports for us begin with a quote request. Either the customer is requesting a quote by truck, air freight or by ocean freight for goods they have sold or in some cases quoting to sell to a foreign entity in a foreign country. In some cases customers quote on a periodic basis (quarterly, semi-annually or annually), not on every shipment on repeat exports. For us to quote effectively we need to know certain pieces of information, that carry over to the actual shipment completion and fulfilling our responsibility to our customer. 4
5 Information needed to quote effectively Commodity Description (harmonized code, if available) Is Commodity Hazardous Carrier / Service Preference Terms of Sale Origin Destination Weight Dimensions, Cubic Feet, or Cubic Meters How is shipment Packed Any special handling requirements Insurance Any special documentation If Ocean quote requested, LCL or FCL (type) Most Exporters are experienced enough to know, if they have an LCL or FCL shipment. By the weight and size of the shipment you should also know, if it is a container load or not and what size container is needed. Also as you learn more about exports be careful of weight, if customer is requesting a 20FT container rate, do you need a tri-axle to meet road limitations. Our Global Transportation Department will be glad to assist you. 5
6 ASK QUESTIONS, it s important Do they have a carrier preference? Particularly in air freight your quote should match your customer s carrier preference. Do they have a service preference? The amount of time that it will take a shipment to arrive destination depends on the carrier and the routing. If you customer is wanting the fastest service available, you need to quote accordingly. What is the pick up location? Do not assume where the goods are available for pick up. Confirm the pick up location. 6
7 What are the terms of sale (Inco term)? The Incoterm relates to who is responsible for various transportation costs associated with the export and who is responsible to manage the execution of the export documentation. Is the shipment Hazardous Cargo? There are carrier surcharges that must be taken into account in quoting a shipment of hazardous cargo. If air, are they a TSA known shipper? Under the rules of the TSA, known shipper s cargo can be transported on a passenger aircraft. Unknown shipper s cargo must be transported on all cargo aircraft only, which affects the rating. 7
8 Do they want a door to door quote? Do not assume that your customer is wanting an airport/port to airport/port quote. Do they need insurance? We should always suggest that the customer protect themselves with the purchase of insurance. Is the shipment to be handled under a Letter of Credit or Sight Draft or open account? Quoting of export documentation preparation is affected by a letter of credit. Documentary requirements are based on the requirements of the credit. Open account documents are based on the import requirements of the destination country. In the case of ocean, do they want a quick quote or do they want the best rate we can get for the proposed shipment. In ocean a quick quote can take a few hours. Where the best rate could take a few days to pull together. 8
9 Is this going to be repetitive business? If so, what is the anticipated volume? If repetitive business depending on anticipated volume, in ocean freight you can secure a bullet rate from a steamship line for addition to our contract, that may be much lower than any current published rate. When do they anticipate the shipment will be ready for export? We are normally aware of any potential increases or changes in surcharges that are expected. Never assume any information. 9
10 START WITH: Routing Identify Carriers that service this destination and frequency of service for air, truck or ocean transportation. If this is a request for truck service to Mexico, let our Laredo office handle the customer s request. Due to deregulation of the air industry back in the 70 s rates do not have to be published. In the case of Export Air we may have a rate agreement in place with a respective airline or we can request spot rate on a shipment by shipment basis. The spot rating is based on weight and density of your proposed shipment. Also keep in mind that some airlines will work special rates for volume or bookings made on a particular flight on a particular day of the week, if the quote becomes a shipment. You must always keep in mind the service level requested by your customer and ensure that the service requested is met. Your local manager/supervisor or Rusty Winfield in the Corporate Office is available for assistance. 10
11 In the case of Export Ocean the Federal Maritime Commission by law requires all carriers to publish their rates. Under FMC rules these rates can be either multimodal rates from inland points or port to port rates published by NVOCC s or steamship lines. You can also construct rates based on various modes of transportation combined with the port to port rate. If the carrier publishes a thru intermodal rate from an inland point of origin to a foreign destination, the carrier designates the routing. Our NVOCC operation publishes a tariff based on the respective service contracts we have between Mallory Alexander and the Steamship Lines. Check our tariff and our service contracts for any applicable rate that may be published in Rate Explorer. Contact the Ocean Carriers providing the service required to get a quote based on the commodity being exported. Contact Global Transportation Group, Meredyth Christian for assistance with Ocean Rates. 11
12 Global Transportation Network at the corporate office is a source to assist with providing quotes and general information regarding transportation via ocean. They also can help with steamship line contacts. On less than container loads we have a contractual agreement with several NVOCCs contact GTN for assistance with these rates. Our steamship line service contract rates can be found in Freight Gate. The Mallory Transportation System Tariff is published on the My Mallory web site. Meredyth Christian is your Global Transportation Network contact at oceanconsol@mallorygroup.com. 12
13 Authorization We should always have written instructions from our customer on every shipment or an up-to-date SOP. We are required by law to have signed authorization to handle a shipment on behalf of an Exporter. Either one of the following meets this requirement. Export Power of Attorney Signed Shipper s Letter of Instructions for each shipment 13
14 Coordinating Inland Transportation To provide the best service for the best rate you must learn routings thru truck lines and railroads. All Export shipments must get to the respective Airport or Ocean Port. Do not become complacent and not check and recheck your options for the inland portion. There may be a lower rate or possibly a new carrier providing service for the inland transportation. On Export Air business a good source of reference for local carriers is the Approved Vendors List as well as your domestic air staff. Our domestic air division is continuously checking for the least expensive options to move their freight. From local pick up carriers to over the road to line haul carriers. A lot of these carriers are RFS, Road Feeder Service (truckers that run over night and provide airport to airport service. 14
15 On Export ocean business a good source of reference for local carriers for container drayage, over the road, etc. is the Approved Vendors List as well as our import staff and domestic air staff. Keep on top of what is happening in your area. You may find truckers that in the past did not offer this service, but have expanded to include container drayage or over the road service to ports. Be sure if you find a new carrier offering better rates or service they must be added to the Approved Vendor List. As fuel costs increase or decrease keep in touch with your carriers and know what the rate of surcharges currently are and what the proposed future increases or decreases. This is critical in keeping your margins up and keeping your customers informed. 15
16 There are various truckers all over the U.S. that specialize in trucking ocean containers between Ports and inland points as well as rail services that provide ramp (at the inland point) to ramp (at the sea port) services for ocean containers. Rail in most cases is the least expensive, but you must keep in mind the drayage cost from the rail ramp to the customers door for loading and back to the rail ramp and drayage from the rail ramp to the Port for loading on board the vessel. 16
17 A lot of ocean carriers over the past have offered intermodal rates from inland points (Ramp or Door) to overseas ports on a thru rate basis or in some cases to and Inland Point in a foreign country. Keep in mind if fuel costs soar again this may become a thing of the past. Steamship lines have imposed Bunker (Fuel) surcharges, but in the recent past rising cost the surcharges fell short of the actual increases in fuel claimed by a lot of steamship lines. Currently because of the fall in fuel costs the surcharges have disappeared and rates have come down. 17
18 Booking or Confirming Space There are several ways to book and confirm space with a carrier. You can book shipments or confirm space thru a call center or on line thru the carrier s web site. If you do not know who to contact, our Global Transportation Department will be glad to assist you. You should also confirm with the steamship line that containers are available at time of booking. For Air check OAG (Official Airline Guide) for frequency of flights and know which flight you need to book your shipment on to meet your customers requirements before contacting the airline. 18
19 Arranging Cargo Insurance We have an open cargo policy in place for insurance coverage to all parts of the world. Check the Internal Forms Library on the I drive for insurance rates available for any export shipment in the Insurance Manual. Mark up on our costs range from 30 to 300 percent. This is a good revenue generating source. Insurance is most important for ocean transport for protection against General Average. General Average The vessel owner has a lien on the cargo for cargo s ultimate contribution in a properly stated general average. The owners of the cargo on the vessel are responsible for any sacrifice that is made for the good of the vessel. If the vessel runs aground or destroys property, general average may de declared, which means that the owners of the cargo on the vessel will share in the loss incurred by the vessel owner. 19
20 U.S Government Export Regulations We are required to accurately prepare the AES data based on the information provided by the exporter. We as well as the exporter can be held liable for any inaccuracy of data filed. Identify if an Export License is required for this commodity as defined by the Export Administration Regulations of the office of Export Administration in the International Trade Administration, U.S. Department of Commerce. Our Compliance Department will be glad to assist you. 20
21 Check the Denied Party Lists can be done in the Enterprise system prior to export or on the BIS web site. We must verify that the ultimate destination is not a sanctioned country on the Office of Foreign Asset Control web site. Confirm that an Internal Transaction Number (ITN) is received for each shipment submitted to AES. 21
22 TSA Regulations If the shipper is not on the TSA s Known Shipper s List, the export shipment must move on an all cargo aircraft. All Air Cargo Agents are required to complete the TSA training before handling and tendering an air freight shipment to an airline. 22
23 Preparing Export Bills of Lading or Air waybills Export Bills of Lading and Air waybills need to be issued in accordance with the Terms of Sale and instructions received from our Exporters. Letters of Credit terms must be met in issuing transportation documents to ensure that the exporter is paid for the goods. Air waybills are non-negotiable documents and is not title to the goods. 23
24 International Ocean B/L Types Full Set Ocean Bills of Lading Usually 3 Negotiable Originals and 3 Non-negotiable copies. Shipment can not be released by the steamship line to the consignee without 1 Original endorsed signed bill of lading being surrendered at destination. Negotiable Ocean B/L issued to the order of is the title to the goods. Normally Arrival Notice should have a statement Original B/L Required for release of Cargo Express Bill of Lading / Sea Waybill No Originals are issued and this is a nonnegotiable document. Original Bill of Lading does not have to be surrender for consignee or delivering trucker to take custody of the cargo after Customs clearance. This document is basically a contract of carriage and carrier s responsibility ends at arrival of cargo. This document does not give title to the goods. The consignee (recipient) named in the ocean bill of lading must identify himself to claim the goods. If goods have cleared Customs, steamship lines consider the shipment details on FCL on a delivery order or truck bill as legitimate information to release the cargo to any party possessing this info regardless of named consignee on the sea waybill. Sea waybill s are non negotiable and steamship lines contract of carriage (terms and conditions) states no liability for misdelivery of cargo. Do not issue Express Bills of Lading or Sea Waybills unless instructed to do so by your customer. Never issue either with an Original HBL. 24
25 Preparing Export Documentation The BNA, TACT Tariff, and Journal of Commerce are sources for determining which documents are required to enter a foreign commerce. Import documentation requirements and other regulations imposed by foreign governments vary from country to country. Some documentary requirements are determined by the nature of the goods (such as cotton, textiles, clothing, etc). The number one reason for export problems to occur is incorrect documentation. A missing certificate of origin, an error in spelling, deleted language, or inaccurate number of copies will cause substantial delays in obtaining customs clearance and require additional costs to complete the process. Wasted time and money cut into profits, annoy customers, and frustrate the export staff. 25
26 In addition to knowing the required documents, they will also need to be in the correct language, in the mandated number of copies, required signatures, appropriate format, notary seals, consular legalization stamps, shipping instructions, and any specific documentary requirement. Since Documentary requirements change, with each shipment a country s documentary requirements, laws and customs practices of the destination country should be checked. Export documentation may also be determined by the type of shipment (A.I.D. shipments, Import License required countries/commodities, Consular requirements or special Letter of credit documentary requirements). Most Foreign Countries also have a web site that details their import requirements. Remember English is not their first language, so this should be your last resort for documentation requirement information. Incoterms has a direct effect on who is responsible for the execution of the export documentation. 26
27 Preparing Banking Documents A shipments Method of Payment is determined by the terms of the payment for the goods from the seller to the buyer. Letter of Credit Draft and documentation requirements will be detailed in this document. You must still meet the documentary requirements, even if the L/C does not require them. Sight Draft Time Draft 27
28 International Legal Considerations Export Regulations Export Administration Regulations (EAR) regulate the export and re-export of items for national security, nonproliferation, foreign policy, and short supply reasons. Anti-Diversion Regulations To help ensure that U.S. exports go only to legally authorized destinations, the U.S. Government requires a destination control statement on shipping documents. These commodities, technology, or software, were exported from the United States in accordance with the Export Administration Regulations. Diversion contrary to U.S. law is prohibited. 28
29 Anti-Boycott Regulations These laws prohibit U.S. persons from participating in foreign boycotts or taking actions that further or support such boycotts. Antitrust Laws The U.S. antitrust laws reflect the nation s commitment to an economy based on competition. These laws are intended to foster the efficient allocation of resources by providing consumers with goods and services at the lowest price that efficient business operations can profitably offer. 29
30 Foreign corrupt Practices Act It is unlawful for a U.S. firm to offer, pay, or promise to pay money, or anything of value, to any foreign official for the purpose of obtaining or retaining business. Food and Drug Administration Enforces U.S. laws intended to assure the consumer that foods are pure and wholesome, that drugs and devices are safe and effective, and that cosmetics are safe. Environmental Protection Agency Regulates the export of hazardous waste, pesticides, toxic chemicals, and ozone-deplete substances. 30
31 Expert Advice Research whatever you do not know. Do not assume anything. Learn the sources for answers. Treat every Export shipment like it was your own. Ask questions of our compliance department. Mallory Alexander has many employees with years and years of experience. Any one will be glad to assist you or answer questions. 31
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