Exporting your products to foreign countries is an exciting way to grow your business and to take advantage of the Internet's global audience. But it raises a number of challenges. Among the most obvious is transporting your products after you sell them. Below are some important things you need to know about shipping goods abroad, including advice about who can help you do it.
The Freight Forwarder: An Exporter's Best Friend
Before you make your first shipment, you'll need to enlist the help of a freight forwarder — an expert who understands import/export rules, shipping regulations in foreign countries, and the best methods of shipping to those markets. A freight forwarder can:
- Arrange transportation of your goods to and from foreign destinations
- Find the best shipping rates
- Prepare and examine necessary documents
- Advise you on freight costs, port charges, consular fees, and any additional costs of shipping such as insurance, special documentation, and handling fees
Consider the following when choosing a freight forwarder:
- Check with the National Customs Brokers and Forwarders Association of America for a list of licensed members. This will give you solid confidence that the forwarder with whom you're dealing is a professional.
- Don't base your decision on price alone. The best forwarders will guide you through the shipping process. This may be especially important for small-business owners who have never shipped overseas before.
- Choose a forwarder who specializes in your international markets. For example, if you are shipping your products to or from Mexico and Guatemala, you'll want a forwarder with expertise in Latin American markets. If you are doing business in Thailand, you'll want a forwarder with extensive experience in the Pacific Rim.
- Get references from other clients. In particular, find out if the forwarder delivers on time and if the products are in good shape when they reach their destination.
- Check the forwarder's financial stability. You can request a credit report on a freight forwarder from Dun & Bradstreet.
Planes, Trains, and Automobiles — and Boats
After you've chosen a freight forwarder, you'll have to decide how you'll transport your cargo: by land, sea, or air. The method depends on the type of product you're shipping and the extent to which time is a factor.
If your cargo is large and your customer isn't in a hurry to receive it, sea transportation is often the most economical shipping method, though there are a few drawbacks. There may be special charges associated with this method, such as a fee for transportation of the product to the dock. And if your payment is contingent on receiving the goods, you may have to wait longer for your money.
Truck transportation is often cheaper than air transportation, but it can take three or fours days or more — and some airlines have cut shipping prices to compete better against trucking companies.
Your best bet is to call airlines and local trucking companies for rates, or enlist the help of your freight forwarder.
Not surprisingly, you'll need to deal with a fair amount of paperwork to get your packages from Paris, Texas to Paris, France. Some of the most important documents include:
- Commercial invoice. You need this form to prove ownership of the goods being shipped and to secure payment. The importer also needs it for customs purposes so you may need to write the invoice in both English and the language of the destination country.
- Shipper's Export Declaration (SED). This document must be included with mail shipments valued at more than $500 and other shipments valued at more than $2,500. You can obtain an SED through the Government Printing Office, the local Customs office, or your international freight forwarder.
- Bill of lading. This bill spells out the carrier's responsibility to deliver your packages to their designated destinations. It also provides evidence to title of the cargo.
Whenever possible, get paid in advance for the goods that you are delivering. If that isn't an option, request that your foreign buyer obtain a letter of credit through his banks. After delivering your goods, your forwarder will present you with the letter of credit, which you then take to your bank. You'll receive your money when the bank confirms the letter of credit with your client's bank.