FOCUS FEATURE
INTERNATIONAL TRADE Customs competency should be demonstrable through
the much coveted AEO standard, or accredited Bonded Warehouse Facilities, Due Diligence Schemes, Deferment Accounts, Customs Special Procedures - all scrutinised by HMRC and therefore offering assurance that you are working alongside a valued, recognised HMRC supplier. Other evidence of a quality supplier will be regulated,
accredited or approved membership status under the rules governing transportation, for example: IATA, FIATA, DfT, DGSA. Track and trace on shipments is a given in this era of
electronic data exchange so check that your forwarding partner has the ability to provide electronic, real time updates on shipment milestones, order management and electronic archiving for data records and customs compliance. International transportation has a level of transparency beyond customer expectations so look for transparency, integrity and honesty in all information sharing. Key milestones give recording and assurance that everything is on track, even when you are not looking. These can include loaded, received at port, customs cleared, shipped on board, departure, arrival, destination clearance and final delivery. The responsibility for each of these events is dependent on the Incoterms agreed for the shipment.
The areas that your freight partner can assist with include: • Route to market • Export packing • Customs compliance • Consulage • Insurance • Documentation
The route to market - what are your options on transport mode, what size restrictions are in place for handling at origin, en-route and at destination? What are the transit times, transhipment points if applicable, what are the expectations from both parties? Keep in mind that freight costs do fluctuate along with fuel costs and exchange rates. Equipment availability and cost (i.e. container size, flat rack, open top) can vary and impact on your expected shipment dates so work with your forwarder to manage this, again without any last minute surprises.
Export packing - currently 78 countries are signed up for the ISPM15 programme which governs the rules on the use of treated timber for wooden packaging and you need to know these rules before any export packing is undertaken to avoid delays, costs and possible disposal on arrival at destination.
Customs compliance - a customs audit can feel like a daunting experience but if you are confident with your product classification and Incoterm, a good freight partner can help you navigate the rules and regulations and ensure you are fully compliant and have a full basket of evidence to support your declarations. Correct classification of the product is vital, followed by procedure codes, value build up and the correct use of licenses, special procedures and audit records.
Consulage work - either a country regulatory requirement or a specific contractual request, your freight partner will have the ability to offer advice on the document type and content and also be able to assist you with obtaining this through the Chamber of Commerce and UK-based embassies. Understanding the rules of origin and detail needed for completing a certified or legalised document, sometimes including translation services, is a fundamental role and practise for your freight partner.
Insurance - as members of trade associated bodies, most shipments will move under Limited Liability terms and conditions. It is reported that over 65% of all shipments are not insured and in the event of a claim, it is often the management time spent in pursuing the claim that is the bigger risk than the value of the loss or damage.
56 business network June 2019
Consider your options on transport mode
Full value insurance cover can be a wise decision and taking into consideration mode of transport, destination and value, your freight partner should be able to offer additional insurance cover through their own Goods In Transit policy.
Payment documentation - a shipment is a gift until the moment it is paid for and securing payment from overseas customers can be seen as risky. If properly addressed within the contract, the payment method can only be one of four methods as previously mentioned. For bank transactions, either via Cash Against Documents or Irrevocable Documentary Credit, some freight partners offer specialist knowledge, expertise and practical assistance in handling this. Seek out a partner which can demonstrate a depth of knowledge and evidence of training. If handled successfully this is the most secure payment method with cash flow benefits such as discounting available to assist exporters.
AND FINALLY… It’s not always plain sailing and the very nature of international trade means that there can be problems and delays from a simple cold spell which closes the ports due to health and safety risks, a driver shortage, through to unexpected sanctions and border controls. Your freight partner can help you mitigate these risks wherever possible through their own supplier and carrier relationships by offering creative solutions and making trade as easy as possible for importers and exporters. In order to remain agile, competitive and fresh, businesses
should embrace the opportunities for realising their international trade ambitions. With Europe high on everyone’s agenda, 145,000 businesses which currently only trade within the EU should seek out additional markets and broaden their horizons, confident that help and support is out there and available for them to do this well. For businesses already in markets outside of the EU, you
will already be familiar with the international trade rules and regulations and should continue to exploit the current strong pound, the value of the Made in Britain appeal and the opportunities for business growth outside of our home market.
‘Businesses which currently only trade within the EU should seek out additional markets and broaden their horizons’
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