ImportExport

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Import/Export

• Amin Lalljee
• Vice- Chairman of The Food Club
• Managing Director of
• Orient Rice Foods Ltd

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Summary

• 1. Why
• 2. When
• 3. Where
• 4. Who
• 5. What
• 6. How

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Why Import or Export?

• 1. We may need raw materials or goods to satisfy
  our customers requirements (Import)
• 2. We have a product which our customers
  overseas want to buy (Export)

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When do we Import or Export ?

• We import
• When there is insufficient local supply.
• When the local supply is more expensive
• We export
• When you can obtain better prices overseas
• When we have a local surplus.

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Where do we Import/Export?

• We import from countries where there is an
  abundant source of
• supply.
• We export to countries where there
• is a demand for our products.

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Who do we Import/Export from?

• Reliable established importers.
• OR
• Reliable established exporters.

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What do we Import or Export?

• Identify the demand for the product(s)
• in the country that you are interested
• to import into.
• Identify the demand for the product(s)
• in the country that you are interested
• to export to.

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How do we identify the demand?

• Through
• Chambers of Commerce
• Embassies/Consulates
• Trade Publications
• Trade Associations
• Other Sources

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Chambers Embassies

• The main chambers assisting in export are
• London Chamber of Commerce (LCCI) in
• the City of London
• Westminster Chamber of Commerce
• We have a list of most of the Embassies/
• Consulates in London

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TRADE PUBLICATIONS 1.1

• Kelleys Directory
• Kompass Directory
• Food Trades Directory (UK Eur)
• Food Trade Review

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TRADE PUBLICATIONS 1.2

• HM Customs Excise
• Notice 101 Deferring Duty, VAT other charges
• Notice 501 Brief guide to import procedures
• Notice 600 Classifying imports/exports

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TRADE PUBLICATIONS 1.3

• UK Trade Navigation Accounts (HMSO) Lists all
  goods imported
• into the UK by value and origin.
• Uniform Customs for documentary credits

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TRADE ASSOCIATIONS

• Federation of Oils, Seeds Fats Association
  (FOSFA)
• Food from Britain
• Grain Feeds Trade Association (GAFTA)
• Potato Marketing Board

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Trade Partners UK

• Joint Service from the Dept Of Trade Industry /
  Foreign Commonwealth Office
• Accessed in the UK via Business Links
• Provides a wide range of services to help UK
  businesses develop overseas markets

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PROCESS INVOLVED

• Sells 1fcl Rice to
  
• US 17,600

EXPORTER
IMPORTER
Importers Bank L/C
Exporters Bank
Asks / receives Amendments
Documentary. Dept dox checked
TT/Swift Reimbursement on NY
Prepares, packs ships goods
Exporters Account is credited
Prepares/forwards Documents to
N.Y Branch pays
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Shipping Methods 1.1

• Airfreight Expensive good for lightweight or
  highly perishable goods
• Road With the advanced road and trucking
  services, it is possible to deliver goods to the
  further point of Europe in a few days, and with
  plenty of competition around, rates can be quite
  attractive.

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Shipping Methods 1.2

• Sea freight Cheapest and most commonly used.

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Shipping Methods 1.3

• Two basic types of containers (20 / 40)
• One may ship a full container load (FCL) or a
  small parcel which is called less than a full
  container load (LCL).

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Shipping Methods -Groupage 1.1

• LCLs are consolidated at loading depots the act
  of which is called GROUPAGE

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Shipping Methods -Groupage 1.2

• Some reasons for groupage
• A shipper has several separate buyers requiring
  small quantities per shipment
• Several separate shippers each have small
  quantities of goods to ship
• A Consignee (buyer) wishes different goods from
  different suppliers (sellers)
• (b)

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Shipping Methods Groupagesome examples

• Separate Separate
• Exporters Importers
• 1/3 C
  1/3 C
• 1/3 B
  1/3 A
• 1/3 A
  1/3 B
• machinery crated goods
  
• 
  
• 1/3

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Shipping Methods De-groupage

• Occurs when a mixed container arrives
• at the destination containing either goods
• shipped by different exporters, or one
• exporter, but several importers.
• The shipping agent at the other end de-
• groups the consignment after it has
• arrived and cleared customs
• 1/3

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Shipping..Stowage

• A 20 container would normally hold
• between 21 23MT of Rice in 5/10/20kg,
• however the same rice packed in 1kg
• boxes would not exceed 17MT.
• Similarly Cinnamon sticks being bulky,
• would not accommodate itself more than
• around 8MT
• 
  
• 1/3

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ShippingFREIGHT RATE 1.1

• Some indicative freight rates
• Karachi / Jeddah US 1000
• Karachi /Beirut US 1200
• UK port/ Beirut US 1500
• UK port / Melbourne US 1000
• UK port / Auckland US 1350
• UK Port/ Kingston US 1635
• 
  
• 1/3

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ShippingFREIGHT RATE 1.2

• Freight rate is
• variable, so shop around
• subject to additional charges and/or surcharges
• 
  
• 1/3

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Shippingcharges/surcharges

• Some of the common ones are
• CAF Currency adjustment factor
• BAF Bunkers adjustment factor
• THC Terminal Handling charge
• War Risk Surcharge
• 
  
• 1/3

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SHIPPING TERMS (1.1)

• Some of the commonly used terms
• are called Incoterms written and
• revised by the International Chamber
• of Commerce every 10 years.

Ex-Works (EXW) Buyer has to arrange collection
at Mfrs factory gates (or at named collection
point), and to arrange all further transportation
themselves Free Carrier (FCA) Supplier to
deliver the goods into the custody of the buyers
appointed carrier at the named place. The Carrier
shall then take over the responsibility of
transporting/shipping on account of the buyer.
Free Alongside Ship (FAS) This is a term used
for the carriage of bulk goods and is not
generally applicable to containerised
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SHIPPING TERMS (1.2)

• Ex-Works (EXW) Buyer has to arrange collection
  at Manufacturers factory gates
• Free Carrier (FCA) Supplier to deliver the goods
  into the custody of the buyers appointed carrier
  at the named place.
• Free on Board (FOB) The seller must deliver the
  goods to a named ship at a named port, with the
  risk and cost of freight passing onto the buyer
  once the goods have been loaded onto the ship.

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SHIPPING TERMS 1.3

• COST FREIGHT (CAF/CF) The seller pays all the
  cost including freight charges.
• Note It is advisable for the Seller to insure
  the
• cargo from time of movement from the warehouse
• up to the time goods are loaded on board the
  ship
• COST, INSURANCE, FREIGHT (CIF) Same as CF
  except that here the insurance up to destination
  is paid by the seller.

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DOCUMENTATION

• Proper and correct documentation
• can mean the difference between
• getting paid or not.
• By providing incorrect (discrepant)
• documents having given control of
• the situation to your buyer, you are
• now at their mercy.

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Discrepant Documents

• A buyer can
• Refuse to pay or delay paying you until such
• time as the goods have physically arrived, and
• even possibly sold onwards
• In certain cases, a buyer can take delivery
• of goods without the title documents against
• a standard shipping guarantee or indemnity.
• Demand a re-negotiation of the price

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The Contract.

• Keep things as simple as possible, at the
• same time retaining as much benefit
• towards yourself without the buyer
• wondering as to why the supplier has
• stacked the cards all in their own favour.

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The Contract..some salient features (1.1)

• If your contract is dated London 5th Dec 01
• it implies that the contract has been made in
• London, is subject to the English Language,
• governed according to the laws of England.
• However It is better to qualify these words at
• the bottom of the contract in smaller print
• (unless you do not mind for it to be in Afghani,
• and be heard in a Court there)

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The Contract..some salient features (1.2)

• Would strongly recommend
• discussing this further perhaps
• with
• Shoosmiths
• Fox Williams

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UK Population

• Compare the population of the United
• Kingdom ( 55 M) with that of other
• Countries, and discover the World as
• being a much larger place to market
• your goods

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Target Population North America

• Canada 31M
• USA 300M

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Target Population Indian sub-continent

• Bangladesh 130M
• India 1,000M
• Pakistan 130M

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Target Population Far East/SE Asia

• China 1,300M

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Target Population Middle East Iran

• Iran 65M
• Saudi Arabia 20M
• Note 25 or 5M of Saudi Arabian population
• comprises of foreign workers

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Import/Export Statistics

• Canada Total consumption 40B
• with 58M being food
• drink from UK
• Saudi Arabia Total food drink import
• 3.1 b/pa with market
• share for UK estimated
• at around 1 b/pa

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Import/Export Statistics

• Switzerland Total agricultural goods
• imported 3.3 billion,
• with 75 from EU

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Import/Export

• It is hoped that this basic
• introduction to import/Export has
• been informative

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Import/Export

• THANK YOU