Chapter 15
Processing the export
order
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
Topics covered in this chapter
• Contract of affreightment – terms of delivery – Inco terms
2000
• Factors determining choice and description of inco terms
• Receipt of export order
• Processing the export order
• Presentation of documents to the bank – check list
• Computerised export department and software
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
Introduction
This chapter examines a key element in international trade – the task
of processing the export order from its placement to its execution. It is
often a computer driven export/logistics office. A particular area on
which to focus by the international entrepreneur to fully understand the
range – 13 – of the inco terms is available, and the merits of each and
the situation in which each is best adopted in the export contract.
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
Contract of affreightment – terms of delivery – inco terms 2000
The basis of a price quotation depends on the correct interpretation
of the delivery trade terms which is examined closely in this
chapter. Study figure 15.1 which provides an analysis of each of
the thirteen terms, and note the seller and buyer responsibilities
key points summarized on page 399. Shippers are encouraged to
obtain from the local chamber of commerce ICC inco terms booklet
no 560.
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
Factors determining choice and description of inco terms 2000
Essential to understand the six key factors determining the choice of
inco terms and also the salient features 15.2. A very comprehensive
description is given in the text. Focus particularly on the long
established FOB, CFR, CIF and EXW and additionally on the growing
popularity of the combined transport inco terms identified in the text
and increasingly used in logistics transits.
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
Receipt of export order
Six areas are examined which require special attention on receipt of
the export order together with the nine check points listed. A further
key factor key factor is the eleven areas to examine prior to order
acceptance. A strategic focus must be followed reflecting the
companies export policy.
Processing the export consignment
A comprehensive order processing sequence embracing 37 stages has
been examined in depth. Important to understand each stage and why
it arises.
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
Presentation of documents to the bank – check list
An in depth analysis which must be understood to lessen payment
problems. Note the three check lists – documents preparation – 21, sea
transport consignment – 10 and export handling letters of credit – 16.
Comprehend the twelve reasons for delays in delivery or dispatch.
Obtain ICC – UCP publication no 500 or UCP no 600[2007]
Computerised export department
Most export/logistic departments are computerised – note the nineteen
benefits listed. Study closely the comprehensive software case study of
Exportmaster System Ltd and note figures 15.3 to 15.8. Visit their
website.
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
Key points
Ensure you understand the following:
• Contract of affreigtment – terms of delivery – inco terms 2000 –
Important to fully understand.
• Factors determining choice and description of inco terms 2000 – a
key area to comprehend in order to devise an effective strategy on
a company/product/country basis.
• Receipt of export order – essential to focus on each area to devise
an efficient and cost effective logistic supply chain management
system.
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch
• Processing the export consignment – again comprehend
each element of the processing.
• Presentation of documents to the bank – check list –
Particularly important to focus on areas resulting in payment
delay and measure to remedy them.
• Computerised export department – especially cost effective
area examined and extensive range of software.
Use with Export Practice & Management
Fifth Edition by Alan Branch ISBN 1–84480–081–4
© 2006 Alan Branch