Academy Export

Exporting to an overseas market doesn’t need to be complicated but a little bit of forward planning can make the process a whole lot easier.

Are you ready to export?

Knowing whether you are ready to export will depend on a few things and often businesses that are looking to export for the first time tend to find it’s because of one of a number of reasons.

• Their UK sales are strong and they’re ready to explore new overseas markets.

• They have either received an inquiry or made a sale with another company or individual abroad and they now need to get their products somewhere new for the first time.

• They’ve started to receive regular inquiries from overseas indicating there is a market for what they have to offer.

If one of the above sounds familiar then great news, you are ready to export. But, before we can get your goods moving, there’s a few steps to go through first.

Take a look at our next article on the Global Freight Trade Academy to ensure your products are compatible for the country you want to send them to.

Or, for an informal chat with our friendly and knowledgeable team, call 01952 270699 or email sales@global-freight.co.uk.

Know your market

Before attempting to move your goods to another country, understanding a bit about the country you are exporting to can help smooth the way into successful exporting.

Taking time to learn about a country’s standard trading practices, and being mindful of local customs and traditions that might conflict with what or how you are planning to sell is really important.

For example, you can’t sell Madonna CDs in Dubai because they are considered too provocative, and in other countries certain books might be censored, blacked out or just rejected.

It is also helpful to have people in your organisation who speak the language of where you are looking to export to – don’t assume everyone will want to talk to you in English!

A geography lesson will also help you avoid any mishaps with the location of airports, sea ports and any difficult terrain that might get in your way.

Evidence shows that more trade takes place with countries with a direct air link, so if you’re unsure about expanding to South Africa or Australia, choose the one with an established direct air route – which isn’t Australia!

Licensing

What you are exporting is also important – is your product hazardous, and does the receiving country have different rules about handling it?

Certain products will need to be licenced, and some countries have restrictions on some goods, such as foodstuffs or military hardware.

You may need licences or certificates if you are exporting any of the following:

• Animals or animal products
• Plants and plant products
• Drugs and medicines
• Medical devices
• Chemicals
• Ozone-depleting substances and F-gases
• Radioactive substances
• Diamonds
• Art works, antiques and culturally significant items
• Waste
• Items which could be used for torture or capital punishment
• Firearms, ammunition and related equipment
• Items which can have both civil and military uses

Certificate of origin

Finally, you will need to provide proof of origin if your goods have a reduced or zero rate of duty in the country you are exporting to – it is likely that any country which has a trade agreement with the UK will trade on these terms.

There are some exceptions, but unless the trade agreement specifically says you don’t need a proof of origin you will need to be able to prove to customs officials world-wide that the goods are eligible for preferential rates of duty.

The type of proof you need varies depending on country, so it is wise to check and we, as an experienced freight forwarder, can make sure you get it right.

If you’ve determined that your product is compatible with the country you are looking to export to, then the next step in your export journey is to check that your company itself is ready to export. Read more here ( link to company ready to export) or contact 01952 270699 for a chat with our friendly, knowledgeable team.

As with all new processes and procedures, there are a few basic things you’ll need to get set up within your company to be able to start exporting.

EORI number

The single most important thing you’ll need is an Economic Operators Registration and Identification number (EORI number). The EORI number is vital if you want to import or export to and from the UK.

Because of Northern Ireland’s special post-Brexit trading arrangements, you will also need an EORI number to export goods to anywhere on the island of Ireland.

If your business is based in Northern Ireland, you might need an EORI to export to mainland Britain, the Isle of Man or the Channel Islands.

To get an EORI number you will need to be able to show that your business is established in the country you want to import into or export from.

The good news is, it’s really simple to apply for an EORI number and unless any checks are needed on your application, you should receive it within five working days. To apply for yours now visit HMRC here.

Commercial invoices

You will also need to make sure you have completed a commercial invoice for products you are looking to move and this must travel with the goods.

The selling price or market value of goods should be included on the invoice, and any freight or export insurance which is included in the overall selling price should be listed separately.

Depending on origin, a Statement of Origin, will have to be inserted.

The commercial invoice should contain all information that is required in order to facilitate customs clearance. Every sale has an invoice which will be raised. A commercial invoice for export or import is a little more detailed with additional information like INCO terms and also commodity codes needing to be inserted.

Packing list

You will need to produce a packing list which helps show what is contained within the shipment. The packing list also shows how it is packed and should contain accurate weights and dimensions.

Please remember that most countries now require all packing materials made of wood to be heat treated. This is the same for pallets and cases or crates. The heat-treated stamp should be visible to customs and border force officials.

International Payments

You will want to get paid so it is advisable that you contact your bank in order to make sure you can accept international payments. Banks will want to make sure you adhere to money laundering regulations and might require additional information on your client.

Unless the relationship with your overseas customer is strong and trusted, always make sure you have a plan to receive payment before the product has left the UK.

If you’re all set up with the above, then the next thing to think about is what incoterms you are looking to trade under.

Sounds complicated but don’t worry, click here (INSERT LINK) to visit our next page on the Global Freight Trade Academy page for more info.

Or, if you would like a chat with our friendly, knowledgeable team, contact 01952 270699 or email sales@global-freight.co.uk.

One of the most important parts of the export process is to ensure that you and your customers understand their shipping and delivery responsibilities.

As with all business transactions the best way to do this is have them written down clearly on the commercial invoice.

To make this easier the International Chamber of Commerce has produced a set of internationally recognised three-letter terms known as Incoterms.

They are used across the globe to clearly define the obligation of cost, risk and responsibility of the transportation of goods between a buyer and seller.

They are super important and they’re what keeps the entire global supply chain moving by avoiding unnecessary confusion between a business and their customers.

When you are negotiating your contract with your customer you’ll need to think about, discuss and agree on the following:

• Where the goods will be delivered to
• Who is going to arrange transport
• Who is going to handle and pay for any insurance
• Who is going to handle the customs procedures
• Who is going to pay any taxes and duties on the goods
• Payments, how much, when payment will be due and in what currency (more on this in the GF Academy here [INSERT LINK to next article How do I get set up for export payments?]

Incoterms you should know about

The latest version of Incoterms came into effect in 2020 and includes 11 different terms and below is a brief explanation of the most commonly used ones.

1. Ex Works (EXW) – the seller/exporter makes the goods available at the seller’s location.
2. Free Carrier (FCA) – the seller/exporter is responsible for delivering the goods to a named carrier.
3. Free Alongside Ship (FAS) – the seller/exporter agrees to place their goods alongside the ship at a named UK port. The buyer/customer bears all risk and costs from that point onwards.
4. Free on Board (FOB) – the seller/exporter is responsible for all costs up until the goods are loaded at a named UK port.
5. Cost and Freight (CFR) – the seller/exporter agrees to pay the costs to send the goods to an agreed port of destination.
6. Cost, Insurance and Freight (CIF) – same as CFR however the seller must also obtain and pay for insurance through to door delivery.
7. Carrier and Insurance Paid to (CIP) – the seller/exporter agrees to pay for the carriage and insurance of goods to a named destination point but then responsibility and risk passes once handed over to the first carrier.
8. Delivered at Place Unloaded (DPU) – the seller/exporter arranges transportation and delivery of goods at a named destination. The seller is required to unload the goods but then customs clearance must be completed by the buyer.

9. Delivered Duty Paid (DDP) – the seller/exporter agrees all responsibility for delivering the goods to a named destination of the buyer and pays all costs in transporting the items to that place.

Still not sure what trade term you should be selling under, get in touch with the Global Freight team for some friendly expert advice on 01952 270699 or email sales@global-freight.co.uk.

If you’re planning to expand your business by trading internationally, you’ll want to know you are going to get paid for the goods that you export and relying on cash payments isn’t always wise or possible.

Here a few important things to consider:

Open account

This type of payment process is best avoided if you are new to exporting. Essentially you as the seller/exporter send the goods to your buyer/customer and then they are given a set period of time to make payment once they receive the items. There’s a huge amount of risk involved and we wouldn’t recommend unless it’s a one off small value export or you have a trusted and established relationship with your buyer.

Bank collection

This is a slightly more secure process and as the term suggests involves getting your bank to send an instruction document to your buyer’s bank for payment of goods.

Letters of credit

Probably the most secure method of payment open to those trading internationally. It reduces risk of non-payment to the seller/exporter by providing a contractual agreement whereby the buyer/importer’s bank promises to make payment to the exporter once they can evidence that the goods have been shipped. This method should result in your business being paid on time and therefore avoid any cashflow issues.

Advance payment

As the name suggests, your buyer has to pay for the goods before you go to the trouble and risk of shipping of them. Consumers fulfil this kind of transaction every day when they’re buying online. It’s the most secure and advantageous for exporters particularly if your customer is new, your buyer doesn’t have the best credit rating or you sell high value or rare items.

Need more info? Give our friendly team a call on 01952 270699 or email sales@global-freight.co.uk for more tailored advice.

The mode of transport you use to export will depend largely on your product – its size, weight, fragility and how quickly you need to get it your buyer.

The main methods to move goods are by air, sea, road or, for small items, by courier.

Planes, trains and automobiles

Air

Moving goods by air has the advantage of being quick, so is perfect for time sensitive logistics. Consignments can be sent via direct or in-direct flights, and consignments of various sizes can be transported using passenger, cargo and chartered flights.

Did you know, more trade is done between countries where there is a direct flight?

Sea

The most used mode of transport is sea freight. Large container vessels circumnavigate the globe transporting everything from wine to food, to trainers and televisions. More freight is moved in this way than any other mode and this is by far the greenest mode of transport.

Consignments are moved in shipping containers of various sizes as well as loose cargo. Sea freight options are a lengthier transit but offer value for money for those not so urgent consignments.

Road

Road freight is the most popular route for exports out of the UK into the EU. Using the extensive roll on roll off ferry services, goods can get to Ireland, mainland Europe and beyond relatively quickly and at a lower cost than air freight.

Road freight provides either time sensitive or indeed grouped or shared services.

Courier

Courier services offer transport options for documents and small cargo. This could be local, national or indeed Internationally. Quick collection together with quick transit and delivery times makes this an attractive option for urgent consignments.

There’s some more useful information on all these services including container sizes for shipments and pallet sizes road here.

Who you gonna call?

Once you’ve identified what you want to transport and how quickly it needs to arrive, you need to decide who is going to do the actual hauling and distribution of your goods.

If you want to take the stress out of the process, then we can help.

As a trusted freight forwarder, we can advise on the best way to transport your goods, make sure you have all the right paperwork in place to avoid any issues en route and arrange all the logistics for whichever route you choose to use.

Give our friendly team a call on 01952 270699 or email sales@global-freight.co.uk.

Once you have decided what method of transport is best to move your goods from one destination to another, you need to ensure that you have the correct documents in place.

It is always wise to ask your customer what documents may be required by them on importing into the agreed destination.

Commercial invoice

This is generated by the seller and is a complex document with details of the commercial transaction. It is vital that this document is accurate as it is used by customs officials worldwide in the clearance process. It will also be used in the payment process with reference numbers etc.

See previous article on commercial invoices for more information.

Packing List

The is again generated by the seller in order to show what is contained within the consignment. It will have accurate weights and dimensions which are used by airlines and shipping lines to declare freight for both safety and security reasons.

Certificate of Origin or EUR1

Some countries will require proof of origin in order to get preferential tariffs on duties and or taxes. Discuss this with your customer as to what their requirements would be for such documents.

Licensing

Some products may be of dual use, i.e. military and civilian. This will mean they might need a license for export.

Export Customs declaration

A customs declaration is an official document that lists and gives details of the goods that you are exporting.

As the seller/exporter you have a legal duty to ensure that you lodge a customs declaration for your goods. You can do this yourself or hire an expert freight forwarder like us to do it for you.

For all goods leaving the UK the customs declaration needs to be lodged with the UK Customs Office and this can be done electronically here.

It is a relatively simple process if you know what you are doing but for first timers and those businesses looking to export regularly it makes sense to use a trusted partner to handle custom procedures.

Our friendly and knowledgeable team can help with tailored advice so do give us a call 01952 270699 or email sales@global-freight.co.uk.

You have done it. The goods have been shipped or airfreighted and they have arrived at the airport or sea port. Your customer is now only a matter of days away from getting their hands on your great product.

Customs

It is now time to make formal customs declaration to the relevant importing authority. At this point they will want to look at paperwork and might even want to look at the product to make sure it is what it says on all shipping documents.

At this point they will review commodity codes and set a level of duty and taxes if applicable. Once this is paid and border force or customs are happy with the freight, they will release this and consider the goods eligible to enter in free circulation.

Your INCO term will determine who is responsible for the customs clearance at destination.

The exact responsibilities will depend on what was agreed in the contract and what trade term you agreed to operate under (see earlier article on Incoterms here – INSERT LINK)

Duty

All consignments will be subject to duty, with some having reduced or zero value rates depending on the product itself and where the product originates from. The rate of duty is set by the commodity code.

VAT/ GST

The rate of GST and VAT is set by the treasury of the destination county. This rate, like the rate for duty is non-negotiable.

Delivery

The consignment is now set for delivery to your customer.

Are you ready to become a successful exporter? Still need some advice or guidance? Get in touch with our friendly, knowledgeable team by calling 01952 270699 or email sales@global-freight.co.uk.

The terminology and jargon around exporting can seem like a whole new language, so Anton explains what some of the main terms actually mean.

CDS Customs Declarations Service – The software system used to record Customs declarations for goods transported by land, air and sea. It gives importers, exporters and freight forwarders the ability to complete customs information electronically.

Commodity Code – A set of numbers used in the identification of a product which is then used to calculate duties payable.

CTC (Common Transit Countries) – The Common Transit Convention is an agreement covering the movement of goods between or through Common Transit countries – Iceland, Norway, Liechtenstein, Switzerland, Turkey, North Macedonia, Serbia and the EU.

Customs Declarations – Full customs declarations usually need to be submitted by importers when goods enter the UK. Other countries have similar requirements for goods exported from the UK.

Duties and Taxes – Duty is an agreed percentage of value payable on imports whilst taxes is the VAT element applied to a product.

EEA (The European Economic Area) – Includes EU member states plus Iceland, Liechtenstein and Norway.

EFTA (The European Free Trade Association) – An organisation which promotes free trade and economic integration to benefit its four member states, which are Iceland, Liechtenstein, Norway and Switzerland.

EORI Number (EU Economic Operators Registration and Identification Number) – Required for all businesses who want to trade internationally. The EORI number is used for identification in customs procedures.

EU Product Rules – The EU has rules about what can be imported into the community, covering specifications, safety etc. Guidance about the rules is available online.

European Single Market – The single market means the whole of the EU is treated as one area for trade purposes, so there are no internal borders or restrictions on the free movement of goods and services.

FTA – Free Trade Agreement. An agreement between two participating countries relating to trade of products and services.

INCOTERMS – International Commercial Terms. Used to clearly define the obligation of cost, risk and responsibility of the transportation of goods between a buyer and seller.

ROO (Rules of Origin) – This is the proof of which country a product has come from, and is used to determine which duties and restrictions might apply in the country to which it is exported.

Trade Tariffs – the agreed level of duties and taxes payable on import.

WTO – World Trade Organisation

Third country – is any country that doesn’t have an international treaty or free trade agreement.

Most Favoured Nation – under WTO rules an advantage negotiated with one trade partner must be extended to all WTO members that do not have a FTA.

Using a good freight forwarder, like Global Freight, will take the stresses of the paperwork off you as they will know exactly which of these regulations applies to you. Contact Global Freight for advice on all your export question via +44 (0)1952 270699 or www.global-freight.co.uk/contact/