eBook | How to Export- A Beginner's Guide

How to Export A Beginner’s Guide

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Table of Contents Basic Documentation

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Classifying Your Product

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Filing AES

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Incoterms

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Cargo Insurance

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ISPM-15

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Basic Documentation Proper export documentation is imperative to the success of an export program. Shipping documents provide many entities, including customs, governing bodies and transportation providers, with the necessary information to approve, validate and process shipments. On the contrary, the lack or inaccuracy of required documentation can lead to cargo delays and unexpected expenses.

Three documents must be generated for every U.S. export shipment: •

Commercial Invoice

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Packing List

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Bill of Lading or Airway Bill

Additional documents may be required based upon the commodity or destination country laws and regulations: •

Export Licenses

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Certificate of Origin

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Certificate of Analysis

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Certificate of Free Sale

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Dangerous Goods Certificate

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Fumigation Certificate

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Phytosanitary Certificate

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Cargo Insurance Certificate

Extra Tips Working with a qualified freight forwarder can help ensure documentation compliance.

Additionally, building in extra time between the point of sale to the departure date can help ensure enough time to complete the necessary documents.

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Classifying Your Product The international Harmonized System (HS) serves as the foundation for the import and export classification systems used in the United States. U.S. exports are classified using Schedule B numbers, while imports are classified using the Harmonized Tariff Schedule of the United States (HTSUS).

Schedule B numbers are simply an extension of HS codes. HS codes are only 4 and 6 digit headings and subheadings. The Schedule B expands the scope to 10 digits, providing a detailed description for every commodity. Schedule B numbers are used by the U.S. Commerce Department, Census Bureau and the Foreign Trade Division to collect and publish U.S. export statistics.

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Filing AES Prior to exportation, an Automated Export System (AES) filing must be submitted to U.S. Customs for any Schedule B line item valued over $2,500.00, or if an export license is required.

Freight forwarders typically submit AES on behalf of the exporter. Historically, AES filings were submitted via paper, however, these are now submitted electronically. AES can be filed through either the Automated Broker Interface (ABI) or the ACE Portal. For an exporter to file AES directly, they will need to set up an account in the ACE Portal otherwise freight forwarders can file AES on behalf of the shipper. Afterwards, the filer will receive an Internal Transaction Number (ITN) as confirmation of the AES filing.

If AES is not filed timely, the shipment will be rolled and miss the intended vessel sailing, resulting in storage fees and per diem charges. Failure to comply with reporting requirements could also result in civil fines and/or criminal penalties.

The exporter is responsible for providing timely and accurate documentation for the freight forwarder. When filing AES, the below details must be known and communicated: •

United States Principal Party in Interest (USPPI)

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Departure Date

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Employer Identification Number (EIN) or Dun and Bradstreet Number (DUNS)

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Origin State

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Destination Country

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Commodity Description

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Schedule B Number (Classification of the Goods)

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Value of the Goods

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Gross Weight

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Indicate whether the USPPI and Ultimate Consignee are related companies

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Indicate whether the commodity is hazardous

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Indicate whether the shipment requires an export license

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Intermediate Consignee (If Applicable

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Final Consignee

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Freight Forwarder

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Shipment Transportation Details (Carrier SCAC Code, Load Port, Port of Export, Discharge Port)

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Equipment Details (Dry or Refrigerated LCL, 20’, 40’, 40’HQ, 45’)

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Booking Number or Air WayBill Number

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Vessel Name and Voyage Number or Flight Details

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Mode of Transportation

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Incoterms International Commerce Terms (Incoterms), the standardized terms used in international trade, can be a complex topic for shippers. Essentially, Incoterms are pre-defined terms that outline the responsibilities for both buyer and seller in the international movement of cargo from the shipper’s door to the buyer’s door.

Incoterms provide guidance on all aspects of transport, including delivery, transfer of risk and responsibility for insurance coverage.

Properly selected Incoterms can reduce risks due to the differences in cultures, languages and legal regulations associated with global trade. By specifying the obligations of the parties involved, supply chain risks can be decreased.

Incoterms, first published by the International Chamber of Commerce (ICC) in 1936, can be grouped into subcategories to distinguish the point at which liability and carriage transfer from the seller to the buyer. The desirable amount of financial and physical control over the goods will dictate which Incoterms are the best for your company.

E terms: (EXW) The seller is only obligated to make the goods available on their premises F terms: (FCA, FOB, FAS) The seller delivers goods to a carrier, but the buyer pays for everything following C terms: (CFR, CIF, CPT, CIP) The seller contracts for carriage, but is not responsible for risk of loss or damage after the shipment D terms: (DPU, DAP, DDP) The seller bears all risks involved in delivering the goods to the buyer

Another important differentiator among Incoterms is the mode of transportation. Certain terms apply solely to maritime transportation (FAS, FOB, CFR, CIF), while the remaining terms apply to multi-modal transportation.

Additionally, only two Incoterms address the important issue of cargo insurance. Regardless of the Incoterm chosen, the responsibility of cargo insurance should always be established prior to shipping.

While Incoterms are crucial to establishing transactional relationships between buyers and sellers, they are not legally binding. Furthermore, Incoterms are not terms of sale, which define the passage of title and payment terms.

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Cargo Insurance Cargo insurance protects shippers’ financial investments during domestic and international transit.

If cargo is damaged or lost, shippers could be burdened with unexpected costs and lose out on expected profit.

While in transit, cargo is susceptible to natural disasters, theft, damage, fire and vessel collisions. These perils could happen at any moment and without notice.

Insurance responsibility should always be outlined within the terms of sale between a buyer and seller. The terms of sale along with the Incoterms will provide details of when and where responsibility is transferred from the seller to the buyer.

When searching for an insurance provider, be sure to look for one that offers: •

All Risk Cargo Insurance

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Claim Filing

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Protection From General Average Exposure

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Special Quotes for Volume Shippers

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Insurance Certificate Preparation

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Maintenance of Shipping Records

When securing cargo insurance, be sure to insure the value of the freight and an additional 10% to cover incidental costs in the event of a loss. Another important note is to secure cargo insurance from the date and location of the first cargo movement.

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ISPM-15 International Standards for Phytosanitary Measures (ISPMs) are used to protect plant resources from the spread of invasive pests migrating in global trade. All wood packaging materials used in shipments should meet ISPM 15 standards to avoid delays or unexpected costs. The ISPM 15 Standard details the minimum mandatory treatment requirements and the marking system for wood packaging materials constructed from non-manufactured wood (softwood and hardwood).

If a shipment is inspected and does not comply with ISPM 15 regulations, the shipment will be rejected by customs and ordered to be exported immediately, with no recourse.

Wood packaging materials are wood or wood products (excluding paper products) used in supporting, protecting or carrying a commodity. These materials include wooden pallets, skids, load boards, dunnage, crating, boxes, pallets, spacers, bearers, bracing, etc. There are some wood materials which are exempt from ISPM 15 regulations. These materials include wood packaging materials made wholly (100%) of processed wood. Processed wood includes: plywood, particle board, oriented strand board, fiberboard or veneer.

Additionally, the following products are also exempt from ISPM 15 requirements: •

Wood packaging materials made entirely from thin wood (6 millimeters or less in thickness)

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Specific barrels for wine and spirits that have been heated during manufacture

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Gift boxes for wine, cigars and other commodities made from wood that has been processed

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Wood shavings, sawdust and wood wool used to stabilize a commodity

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Wood components permanently attached to freight vehicles and containers (flat racks)

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ISPM-15 continued Currently, the acceptable treatments for wood packaging materials within the United States include heat treatments or fumigation.

When heat treating the wood, it must be heated at 56 degrees Celsius to the core for a duration of 30 minutes.

Alternatively, the manufacturer may also choose to treat the product through chemical fumigation using Methyl Bromide. However, this method is not as environmentally friendly, and most developed countries have phased out this treatment process.

ISPM 15 Compliant Label XX: Indicates a two letter ISO country code 0000: The next series of letters/numbers is the unique identification mark of the wood treatment agent or packaging manufacturer YY: Indicates the type of treatment and will either be HT (Heat Treatment) or MB (Methyl Bromide) Please note: The country code and treatment agent or manufacturer code must be separated by a hyphen. Additionally, exports of wood packaging materials to Hawaii, Puerto Rico and other U.S. Trust Territories are not required to be treated and given the ISPM 15 mark.

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About Ascent Ascent Global Logistics, headquartered in Belleville, Michigan, is a leading global provider of time-critical logistics solutions and other direct transportation services. The company connects customers to its extensive carrier network, internal ground fleet and airline via its proprietary, digital PEAK™ freight marketplace, which provides robust carrier capacity and transparent pricing, backed by 24/7/365 logistics experts. Ascent’s offerings include air charter and ground expedited solutions as well as truckload, less-than-truckload, global forwarding, brokerage and managed transportation services. The experienced Ascent team solves customers’ most challenging logistics needs by providing industry-leading service and top-tier satisfaction.

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