How Do I Legally Export Products?
How to Legally Export Goods from the US: A Basic Guide
As you can imagine, the process you have to go through to legally export goods from the US is one filled with red tape and tedious requirements. Generally speaking, it is better to utilize a freight forwarding service to handle exportation. This is because freight forwarders will handle the majority of the paperwork and documentation. They also have a good knowledge of the import regulations of foreign countries, the export regulations of the US, foreign trade documents, etc. However, it is possible to do it yourself as long as you don’t mind navigating through the bureaucratic process.
5 Factors Every Exporter Must Consider Before Exporting:
In order to ensure a successful export of good over seas, there are 5 major considerations you as an exporter need to consider.
Each of these concepts plays an integral role in the process an exporter needs to follow in order to legally export goods from the US. We will go into further detail below.
Generally speaking, most of the shipments leaving the US do so in containers. (You can read more about what is legally allows to be shipped via these containers by checking out out our article : What is Prohibited in Shipping Containers).
You need to be aware that if your items are not shipped via shipping container, products can still be shipped as breakbulk cargo (In shipping, break bulk cargo or general cargo are goods that must be loaded individually, and not in intermodal containers nor in bulk as with oil or grain. Ships that carry this sort of cargo are often called general cargo ships.) This means that in addition to the normal handling encountered in domestic transportation, a breakbulk shipment transported by ocean freight may be loaded aboard vessels in a net or by a sling, conveyor, or chute, that puts an added strain on the package. During the voyage, goods may be stacked on top of or come into violent contact with other goods. Overseas, handling facilities may be less sophisticated than in the United States and the cargo could be dragged, pushed, rolled, or dropped during unloading, while moving through customs, or in transit to the final destination.
Another major concern in regards to packing is making sure that packaging can stand up to prolonged exposure to moisture; which is a constant condition during cargo shipping.
Your Packaging Should Meet These Guidelines:
- All of your packages should be moisture resistant (this includes packing filler)
- The weight in your container should be evenly distributed
- Packing Should be braced, firm, and resistant to impact
- Packed containers should be as full as possible (to avoid shifting during shipment)
- Observe any product-specific
- All goods should be at the very least palletized, at best containerized
- Follow all legal labeling procedures while avoiding writing contents or brand names on packages. Other safeguards against pilferage include using straps, seals, and shrink wrapping.
Luckily, the buyer over seas will generally be well versed in the port systems specific to their respective countries, and will often times send very specific packing instructions at the time of purchase.
Specific marking and labeling is used on export shipping cartons and containers to:
- Meet shipping regulations;
- Ensure proper handling;
- Conceal the identity of the contents;
- Help receivers identify shipments; and
- Insure compliance with environmental and safety standards.
The overseas buyer usually specifies which export marks should appear on the cargo for easy identification by receivers. Products can require many markings for shipment. For example, exporters need to put the following markings on cartons to be shipped:
- Shipper’s mark;
- Country of origin (U.S.A.);
- Weight marking (in pounds and in kilograms);
- Number of packages and size of cases (in inches and centimeters);
- Handling marks (international pictorial symbols);
- Cautionary markings, such as “This Side Up” or “Use No Hooks” (in English and in the language of the country of destination);
- Port of entry;
- Labels for hazardous materials (universal symbols adapted by the International Airi Transport Association and the International Maritime Organization); and;
- Ingredients (if applicable, also included in the language of the destination country).
Some Tips to Proper Labeling:
- Letters should be stenciled onto packages using only waterproof ink
- Labels should appear on 3 sides of the container
- Any old markings on containers must be completely removed before you pack them
- Products should be labeled with port markes, addition to the port marks, customer identification code, an indication of origin, the package number, gross and net weights, and dimensions. If more than one package is being shipped, the total number of packages in the shipment should be included in the markings. The exporter should also add any special handling instructions. It is a good idea to repeat these instructions in the language of the country of destination. and use standard international shipping and handling symbols.
We really cant recommend using a freight forwarder enough, especially for this part of the exporting process. If you don’t use a freight forwarder, then at the very least seek legal council. The amount of paperwork is very substantial, and even one incorrect document can slow down or halt your exporting process entirely. The documents listed below are a collection of commonly used documents for exporting (http://trade.gov/) , but each transaction will have different requirements of documentation which are based on the US government requirements and the destination country’s requirements.
Air waybills handle air freight shipments, and can never be made in negotiable form
- A bill of lading is a contract between the owner of the goods and the carrier (as with domestic shipments). For vessels, there are two types: a straight bill of lading which is nonnegotiable and a negotiable or shipper’s order bill of lading.
- A commercial invoice is a bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods when assessing customs duties.
- A consular invoice is a document that is required in some countries. It describes the shipment of goods and shows information such as the consignor, consignee, and value of the shipment. Certified by the consular official of the foreign country stationed here, it is used by the country’s customs officials to verify the value, quantity, and nature of the shipment.
- A certificate of origin is a document that is required in certain nations. It is a signed statement as to the origin of the export item.
- A NAFTA certificate of origin is required for products traded among the NAFTA countries (Canada, the United States, and Mexico).
- Inspection certification is required by some purchasers and countries in order to attest to the specifications of the goods shipped.
- A dock receipt and a warehouse receipt are used to transfer accountability when the export item is moved by the domestic carrier to the port of embarkation and left with the ship line for export.
- A destination control statement appears on the commercial invoice, and ocean or air waybill of lading to notify the carrier and all foreign parties that the item can be exported only to certain destinations.
- A Shipper’s Export Declaration(SED) is used to control exports and act as a source document for official U.S. export statistics. SEDs must be prepared for shipments through the U.S. Postal Service when the shipment is valued over $500. SEDs are required for shipments not using the U.S. Postal Service when the value of the commodities is over $2,500. SEDs must be prepared, regardless of value, for all shipments requiring an export license or destined for countries restricted by the Export Administration Regulations.
- An export license is a government document that authorizes the export of specific goods in specific quantities to a particular destination. T
- An export packing list considerably more detailed and informative than a standard domestic packing list. It an itemizes the material in each individual package and indicates the type of package, such as a box, crate, drum, or carton. It also shows the individual net, legal, tare, and gross weights and measurements for each package (in both U.S. and metric systems).
- An insurance certificate is used to assure the consignee that insurance will cover the loss of or damage to the cargo during transit
For help with trade documentation and requirements, you can always call the Trade Information Center: 1-800-USA-TRADE
Before shipping your goods, you must first acquire a booking contract, which is basically reserving space on a carrier for your shipment.
The cost of the shipment, the delivery schedule, and the accessibility to the shipped product by the foreign buyer are all factors to consider when determining the method of international shipping. Although air carriers can be more expensive, their cost may be offset by lower domestic shipping costs (for example, using a local airport instead of a coastal seaport) and quicker delivery times. These factors may give the U.S. exporter an edge over other competitors.
There are about 10,000 shipping containers lost at sea every year. Although this is a TINY fraction of the amount of containers which are shipped over the oceans every year, it is still important to be aware of the risk.
What other risks does shipping goods involve?
Pilfering, water damage, and damage from items being jostled around or handled carelessly are just some of the potential risks to your investment.
Export shipments are usually insured against loss, damage, and delay in transit by cargo insurance. Carrier liability is frequently limited by international agreements. Additionally, the coverage is substantially different from domestic coverage. Arrangements for insurance may be made by either the buyer or the seller, in accordance with the terms of sale. Exporters are advised to consult with international insurance carriers or freight forwarders for more information.
Although sellers and buyers can agree to different components, coverage is usually placed at 110 percent of the CIF (cost, insurance, freight) or CIP (carriage and insurance paid to) value.
Exporters must be aware of not only the tariffs for which they are legally responsible, but also how those extra fees should fairly impact the sale price of the product. You must also account for:
- Port fees
- Handling fees
- Insurance Fees
Generally Speaking, the Importer is responsible for these fees, but they will be an important factor for you as you set a fair price point for your products.
Save yourself the hassle and get a freight forwarder to handle the red tape and tedious requirements to legally export goods from the US. If you do choose to export your products yourself, then make sure to check and re check and triple check both with your international buyer as well as the US Trade Commission to Ensure your export is legal, and cost effective!