Choosing the best export markets to enter can result in large profits. However, don't make the common mistake of spreading your resources too thin. Smaller companies new to exporting get better results by pursuing fewer markets rather than many at once.

In conducting your analysis, consider the factors below. Just about all the information you need is available from the U.S. Commercial Service. Consult the U.S. Government section of your phone book for the office nearest you.

Rank Foreign Markets in Terms of Demand and Country Performance

Rank the top foreign markets by the value of your product they import from the United States. Then re-rank them by their total demand (domestic production plus world imports) for the previous three years.

This will determine their market size, its rate of growth, U.S. market share, and whether it's increasing or decreasing. If demand for your product is increasing, this will be one good reason to pursue a given market. Now look at each country's rate of growth and per capita gross domestic product. If the indicators have decreased, it's likely that your product demand will also decrease.

Examine Competition, Cultural Tastes and Trade Barriers

Learn about your competition, their product price points, quality, distribution methods, consumer loyalty and their ability to provide after-sales service. If intense competition exists, stay away for now. Smaller developing markets may be unprofitable for multinationals, but big enough for you.

If your product designs do not suit cultural tastes, make the changes if future sales warrant it. Identify tariff (duties) and non-tariff barriers (standards, regulations, quotas, labeling requirements, etc.). If excessive, they may prevent sales. If manageable, see if any vested interests can bar your product from shelves.

Understand Political Risk and Currency Convertibility

Keep abreast of political risk, especially in developing nations. Should a government collapse, disruptive activities may put you out of business.

Countries with non-convertible currencies or insufficient reserves may not be able to pay you in U.S. dollars or on a timely basis. Should you accept a foreign currency, wide fluctuations could cause a loss.

Investigate Infrastructure and Location

High-tech products often require a skilled support staff (human infrastructure). If not available, you may be forced to provide support from the home office, which may be too expensive. The lack of physical infrastructure may also curtail exports. For example, the inability to quickly deliver perishables due to inoperable roads or inaccessibility to refrigerated storage may be a deterrent.

The shipping costs of heavy merchandise to distant locations may eliminate your profits. In this case, you may wish to consider licensing your technology.

Explore Environmental and Legal Concerns

Determine if your product meets environmental standards. If so, investigate if your selected countries' governments provide facilities to treat or store your toxic by-products. If not, this can create serious health and legal problems.

In some countries the accused is presumed guilty until proven innocent, and judges may unfairly favor domestic agents or consumers. Carefully assess each country's environmental practices and legal environment, and importantly, its ability to enforce intellectual property laws.

This article appeared in FedEx Global, a publication of Federal Express, April-May 1997.
Topic: Strategies
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Exports are increasingly becoming more important to the success of the Canadian economy and individual companies. And if you're responsible for any international activity, chances are your company's success at exporting will impact your personal job performance -- and your value to your organization.

Topic: Strategies
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A new economic era is quickly replacing the old, affecting virtually every aspect of Canadian life. Many assumptions no longer seem to apply — yet new realities still need to be defined. These ambiguities are causing Canadian companies to question their business tactics and reassess their strategies.

Topic: Strategies
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The Christmas holiday rush means a number of things to a number of people. For many brokers, freight forwarders, transportation specialists and importers, it's a time when the pressure is at a maximum and quick delivery from the docks to the final destination is imperative. For retailers, it can mean the difference between a successful year or a missed opportunity and lost profits.

Many of these professionals admit that even simple mistakes in documentation, for example, can result in an expensive shipment sitting idle on a dock or customs officials seizing merchandise for lengthy periods of time. Consequently, retailers anxiously waiting to fill their shelves with demanded goods from abroad -- in order to satisfy the holiday buying spree -- can wind up with empty shelves accumulating dust.

Because time is of the essence, little flexibility for error exists. This means that brokers, freight forwarders and transportation specialists and importers must be mentally sharp -- or risk losing valued retail clients.

Many strategies have been employed to reduce delays or prevent them from arising during the rush to get goods off the ships and onto shelves for the Christmas selling season or other holidays. These strategies include: requesting customs clearance authorization in advance of the arriving goods; maintaining open lines of communication with all those responsible for the importation and distribution process; delegating specialists to major accounts; being well educated and understanding every customs regulation and procedure; obtaining binding customs rulings not open to interpretation by individual customs agents; ensuring that truckers are familiar and have a relationship with the terminals; and the separating and forwarding of containers to other New York/New Jersey ports for greater convenience and faster pick-up.

Sherrie Stevenson, Vice President of FPA Customs Brokers, Inc., in Jamaica, New York, is very familiar with the Christmas holiday rush, understands the importance of timely delivery, and is adept at dealing with problems incurred when clearing and moving cargo. She claims that 99% of freight handled by her firm is cleared on time -- even during the busiest holidays of the year. FPA handles imports for a variety of large national retail chains involved in clothing, jewelry, footwear and other goods.

To ensure a smooth and fast import process, Stevenson says she requests import documentation from her clients as far in advance as possible. Using the latest EDI software, she then electronically transmits the information to U.S. Customs in Washington, DC, for clearance approval five days in advance of the ships arrival. In 70% of the cases, she can expect a computerized response within one-half hour indicating a paperless release has been authorized. This electronic process allows the merchandise to be picked up at the dock -- not requiring any U.S. Customs paper work -- achieving the fastest delivery to the retailer's destination.

FPA has always received the cooperation from U.S. Customs at the JFK Airport under the guidance of Area Director, Thomas Mattina, and his assistant, Jerry Monaco, who have an excellent understanding of the needs of the import community, Stevenson says.

Importantly, the support given from the New York/New Jersey Port Authority throughout the importation process is very good, she said. The Port is "very aware of the importers needs."

Anne Giarla, import manager for R.L. Albert and Son, Inc., an importer of candy based in Greenwich, Connecticut, is busiest before Halloween -- the company's biggest holiday. Of the 500 containers imported annually, all by ship, 50% to 60% of the containers are brought in between June and September for Halloween. Their second biggest holiday season is Christmas.

The company imports hard candy from South America, chocolates from Germany and novelty candies from Hong Kong. Giarla says that port congestion during the busy season and incorrect documentation submitted from the foreign supplier can slow down the import and distribution process. Due to the nature of the product, each shipment requires approval from the Food and Drug Administration, another process that can delay delivery.

A few steps taken in advance can alleviate most problems, Giarla says. Open lines of communication with foreign suppliers, the port, shipping lines, the customs broker, and the FDA are necessary to ensure that everything moves smoothly. "It is important to have many people to call last minute if a problem arises."

Ninety percent of R.L. Albert and Son's candy is brought in through the New York/New Jersey Port. Stated by Giarla, it's one of the best ports to bring goods into. "The level of support is very professional and the Port is always working to make things better." She has encountered fewer problems at the New York/New Jersey Port than other ports, she says.

Canusa Trade Services, based in Fort Erie, Ontario, Canada, is a customs broker consultant and freight forwarder. Many of Canusa's clients are U.S. and Canadian firms taking advantage of lower duties under the North American Free Trade Agreement. And many of their clients ship and receive goods through the New York/New Jersey Port.

Mike Carroll, vice president of the firm, says the Christmas rush is especially busy for them. A larger client of Carroll's, a retail boutique chain with over 2,000 outlets in the United States and Canada, imports about 70% of their product from Asia and Latin America. Most of these goods are received and stocked well before Christmas. However, some of the deliveries are brought in last minute, especially if sales are very strong. This, Carroll adds, allows for no customs or shipping miscommunications or mistakes.

In order to accommodate this last minute rush, Carroll designates one freight/customs specialist to exclusively handle this client's needs, and others like it. This individual service, he says, ensures that each package is accounted for and delivered to its final destination as quick as possible.

Carroll adds that one of his client's shipments was recently unloaded from a ship and somehow misplaced on the dock. Within a very short period of time, his specialist assigned to the account quickly became aware that a problem existed and diligently worked with the terminal manager to correct the problem. "The system works well", Carroll says.

At The House of Seagram, importers, providers and marketers of distilled spirits in the United States, the adage "knowledge is power" is taken very seriously. The company puts a great deal of emphasis on education. This is not just to ensure that operations run smoothly and to effectively deal with crises as they arise, but to prevent them from arising -- especially during the holiday season.

Lorraine Bregman, Manager of Customs Affairs, deals exclusively with U.S. Customs, and other government agencies, including the Bureau of Alcohol, Tobacco and Firearms, and the Food and Drug Administration, whose regulations must be satisfied on a per shipment basis. Bregman makes it her business to be very well informed of customs regulations, procedures and changes. In doing so, she regularly attends seminars and maintains an open line of communication with U.S. Customs officials.

As a result of her vast knowledge of customs regulations and their complexities, she is often able to prevent customs or other agency-related delays from occurring at Sea gram or its distributors, who often take delivery of merchandise directly from the Port of New York and New Jersey.

When changes in regulation do occur, Bregman will notify her distributors well in advance of the new rules and their implementation dates, and educate her customers on any new procedures.

As a result of this strategy, Bregman says, she can't recall having major delays in the clearance of her products and their distribution. Seagram imports from the United Kingdom, Sweden, France, Canada and Mexico.

An ultimate goal of The House of Seagram is to operate in a paperless environment through EDI in order to better facilitate the importation process with U.S. Customs and their customs broker, Bregman says.

According to a senior U.S. Customs official, the holiday rush can be hectic. In order to avoid pitfalls and quickly move merchandise through the importation process, good preparation, proper markings with correct country of origin information, labels that meet stringent specifications and consistent documentation are vital.

It is highly recommended, she adds, that a written binding ruling on new products be obtained well in advance of the importation date. A binding ruling will clearly define the product's harmonized code and rate of duty -- leaving little discretion to an individual customs agent. Binding rulings are usually issued within 30 days of the requested date.

The Wine and Spirits Shippers Association based in Reston, Virginia, has about 400 wholesaler and importer members located throughout the United States. These establishments import mostly from France, the United Kingdom, Italy, Australia, Spain and Chile. According to Geoffrey Giovanetti, Managing Director of the Association, over 40% of member imports are brought in through the New York/New Jersey Port.

Under half of the Association members' products are consumed during the period from Thanksgiving through New Year's Eve. Consequently, some congestion occurs at the Port from September through November, a time when a massive amount of goods stream into the Port from all over the world.

Giovanetti says that perfect coordination among the trucker, importer, broker and U.S. Customs agent is critical so that his member's merchandise is picked up as fast as possible by the trucker after being unloaded from the ship. The fear that temperatures will drop below freezing, damaging the product while on the dock, has been known to occur from time to time. As a result, the trucker's familiarity and relationship with the terminal is of paramount importance, he says.

The terminals at the New York/New Jersey Port are working hard to get the trucks in and out as fast as possible, Giovanetti says. In fact, terminal managers often clock how long it takes to get a truck in, loaded, and out in an attempt to increase efficiency. This method is also useful in determining if an unusual problems exist, he adds.

In mid-November, Beaujolais Nouveau, a very popular wine product imported France, is released and in many cases shipped to the New York/New Jersey Port by air. Every year, according to Giovanetti, this causes a frantic situation for wholesalers, importers and truckers who are trying to satisfy retailers' wishes to be the first to get the product on their shelves for the holidays.

According to Giovanetti, his members' merchandise is usually picked up by the trucker the day after the ship reaches port. The longer it remains there, however, the more likely it is to be damaged, or possibly stolen. As a deterrent to pilferage, Giovanetti suggest that a more substantial seal be put on container doors.

Sal Catucci, Chief Executive Officer at American Stevedoring, located at the Brooklyn port, implements strategies that have proven very useful in reducing congestion at the Port of New York/New Jersey and increasing delivery time. In fact, Catucci claims that his day to day turn-around time is about 25% faster than many other terminals.

For many containers bound for the southern or western points in the United States, American Stevedoring will separate and forward these on barges to the Port of Elizabeth in New Jersey, also operated by the New York/New Jersey Port Authority, where they will be picked up by truck. This strategy reduces congestion at the Brooklyn port and eliminates the time it would normally take for the truckers to drive to and from the Brooklyn port.

According to Catucci, American Stevedoring employs, on average, 421 people each day. Based on the amount of traffic, the number of workers can be increased significantly with as little as one day's notice. This quick response time really helps keep the level of efficiency high, he says. His busiest period is prior to the Christmas season, beginning in early fall.

Additionally, American Stevedoring offers a bulk break service which enables the company to open containers and separate packages destined for various locations. This service saves the importer the time required to pick up the goods, truck them to another location, separate, and in some cases, repackage the goods.

Catucci feel the Port of New York/New Jersey has done a very good job increasing the Port's level of efficiency which, he says, has eliminated a good deal of congestion during the holiday season.

This article appeared in VIA Magazine, a division of The New York Times, November-December 1995.
Topic: Strategies
Comment (0) Hits: 3090



Through much experience, many exporters have come to learn the logistical ins and outs of exporting to Mexico. When it comes to Mexican customs regulations and the clearing of goods, this experience can prove monumentally beneficial.

Many admit that even simple mistakes in documentation, for example, can result in an expensive shipment sitting idle for days at the Mexican border, or Mexican Customs even seizing merchandise for lengthy periods of time. The remedy for these problems can require a great deal of time and money.

Many helpful tips have been offered by Daniel Grimes of Emery Worldwide based in Mexico City, Jack Villari of Servicestar Corp., a retail chain with 4,400 stores globally, and other experts, who in many cases have learned lessons the hard way. In order to avoid common -- and sometimes not so common -- border delays and customs problems, you may wish to adopt their following suggestions.

 

  1. Visit the Mexican broker who will be handling your shipments. Establish a relationship and learn as much as possible about the Mexican import process. As goods begin to flow southward and snags invariably occur, your greater understanding of the process can allow for speedier resolutions.
  2. In order to claim NAFTA status and take advantage of duty eliminations under the North American Free Trade Agreement, NAFTA Certificates of Origin are required. In many cases, however, a U.S. company will import products from Asia and divert a portion of the cargo to Mexico. In this case, each product will require a non-NAFTA Certificate of Origin. Obtaining these certificates from several foreign suppliers at a later date can be a time consuming task. Thus, if you're considering diverting a portion of imported merchandise to Mexico, request the certificates when making the purchase.
  3. Send copies of completed documentation well in advance of the shipment to your freight forwarder, the Mexican broker, and your customer to allow for any corrections.
  4. Mexican tariffs are still applied to the value of the goods, plus the cost of insurance and freight. As a result, an itemization of all values and costs is important to avoid insurance and freight costs from being added twice to the bottom line by Mexican Customs.
  5. It's important to provide the fullest product description possible. Provide catalogs or complete descriptions of the product to the Mexican broker to assist the customs appraiser in determining or confirming the accurate tariff product classification.
  6. Ensure that all Mexican labeling requirements are satisfied and in Spanish.
  7. Mexican Customs officials place a great deal of emphasis on the accuracy and completeness of the documents. Consistency is essential. Discrepancies can result in allegations of contraband, followed by stiff penalties.
  8. Properly package the merchandise to allow for easy and secure loading and unloading to avoid product damage.
  9. Contact your freight forwarder or broker to determine if any export or import restrictions, permits, special documentation requirements, or extra fees apply. Regulations have been known to become effective with minimal notice.
  10. Never ship products to your freight forwarder or Mexican customs broker without prior notice.

 

This article appeared in Global Shipper, November 1995, a publication of Emery Worldwide.
Topic: Strategies
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