How to Export from
Canada
Presentation overview :
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What can you export
The export process.
1. Pre export activities
2. Exporting
3. Post export
4. Getting paid
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1.
2.
WHAT CAN YOU EXPORT?
SERVICES
GOODS or PRODUCTS
We will concentrate in exporting or trading GOODS or
PRODUCTS.
If we classify them by how they are defined we can call
them :
1.
2.
COMMODITIES (products price based) and
NON COMMODITIES (products attribute based)
The Export Process
1. Pre-export activities
2. Export
3. Post-export activities
• Be prepared, execute
precisely, follow up to
improve!!!
Export
Pre-Export
Post-Export
1. Pre-export
Basic knowledge needed for international.
trading:
1.
2.
3.
4.
5.
INCOTERMS. You have to have a good
command of your Incoterms. Know your
purchase and selling terms.
SUPPLIER. Who is your supplier and where
is located, your purchase and payment
terms, all technical specs.
LOGISTICS. Deep understanding of all
logistics involved in the exporting process.
DOCUMENTATION. Knowledge of all documentation
and legal requirements at your exporting port and at
your importing port.
IMPORTER. Who is your importer. Had he cleared all
import requirements? Are pre shipment inspections
needed? Are you allowed to export to that country?
Can you get paid?
Pre-Export
Post-Export
Export
1. Pre-export
Pre-Export
Export
INCOTERMS.
Terms internationally accepted that provide rules
for trading. Buying or selling terms are based on :
1.
2.
Departure point : EXW (ex works)
Main Transportation Unpaid:
FCA (free carrier)
FAS (free alongside ship)
FOB (free on board)
3.
Main Transportation Paid:
CFR (cost and freight)
CIF (cost, insurance and freight)
CPT (carriage paid to)
CIP (carriage insurance paid to)
Post-Export
4.
Arrival Point:
DAF (delivered at frontier)
DES (delivered ex ship)
DEQ (delivered ex quay)
DDU (delivered duty unpaid) and DDP (duty paid)
1. Pre-export
Pre-Export
Export
SUPPLIER.
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Who is your supplier? Where is located?
What are your purchase terms? EXW,
FOB, CFR, CIF ?
Clarify all technical specifications at
purchasing : quality, packaging, quantity.
After a Purchase Order is issued, all
amendments will cost you money.
Specify Payment Terms : COD, CAD,
open terms (7,15,30,60, 90 days?), L/C
sight or terms? Partial shipments
allowed? etc
Post-Export
What happens if a supplier
defaults me?
Answer: Make sure you have good SC/PC
that includes rules of dispute and
always have a plan B or quantify your
worst scenario.
PS: Good luck and have fun!
1. Pre-export
Pre-Export
LOGISTICS
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All transportation, storage, loading and
unloading activities involved from the
point in which the product is received
from the supplier to the point in which
the product is appropriated by the
buyer.
Main controllable cost component of
your cost structure.
Important to coordinate shipping and
arrival dates with market situation and
payment terms.
Post-Export
Export
1. Pre-export
Pre-Export
Export
LOGISTICS
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Main logistics components before the
export is done, all shipping cost from
origin to shipping port, involves:
Truck from plant to rail terminal (CP or
CN)
Intermodal (truck/rail) or rail (boxcar or
hopper car or platform) movement to port
Truck at arrival to move product to
stuffing facility if not in container.
P&D of marine container and stuffing
facility cost.
Post-Export
Special doc’s for
high tech
DOCUMENTS
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Documents are very important
specially when L/C’s are involved
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The main pre-shipments issues are:
Preparation of B/L instructions before
loading.
Request of Export certificate 5 days
before loading to the CFIA if it’s food.
Request of Inspector if required by
destination country
Preparation of Export declaration or B-13
1. Pre-export
Pre-Export
Export
IMPORTER
When issuing your Sales Confirmation
or Sales Contract, be very clear with:
Post-Export
1.
2.
Product Specifications (same as
purchase ones)
Payment Terms : COD, CAD, Open
Terms (7, 14, 30, 60 or 90 days?) from
arrival or B/L date?, Promissory Note?
How many days? L/C payment? At sight,
30, 60, 90, 180 days? Is L/C confirmed
and unconditional?, are partial shipments
allowed? Can you meet all L/C
requirements? No typos on the L/C?
(typos cost money to amend)
3. Shipping dates. Allow yourself a reasonable
time frame to fulfill your shipping contract.
Are partial shipments allowed?
4. Import Requirement. Be sure all import
requirements are cleared by the importer
BEFORE you load the product into a
container: Import Permits or License, is
a quota needed? Are pre-shipment
inspections needed? Who is paying for
them? Are special certificates needed?
DO I NEED AN EXPORT PERMIT ?
2. Exporting
Export
Pre-Export
If all previous issues before loading
the goods are covered, the Exporting
process comes down execute the
following :
Post-Export
1. EXPORT LOGISTICS. Shipping cost from
country of origin to destination
country.
2. DOCUMENTATION. As required at
exporting and importing.
3. INSURANCE. Transportation insurance and
risk insurance.
2. Exporting
Pre-Export
Export Logistics
Basically there are 2 main costs to control:
Shipping cost at port of origin :
Involves main freight : Marine / Rail / Truck /
Air, THC at origin, storage if needed to
roll booking.
- Shipping cost at destination port:
THC at unloading (usually paid for by
customer), storage charges (port) and
demurrage charges (line) if container is
not pick up within the free time.
Demurrage charges (line) if container
is not returned within the free time.
Post-Export
Export
Pre-Inspection certificate is not required
anymore to Peru. Good to check for other
destinations.
2. Exporting
Pre-Export
Export
Documentation
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1.
2.
Documents needed to :
Report your Export : from Canada a B13, from USA a Shippers Export
Declaration (SED)
Imports : The standard for most
countries are: Commercial Invoice,
B/L (Bill of Lading), Certificate of
Origin and Export Certificate ( can be
called Phytosanitary for agricultural
goods, Zoosanitary or Health for
animal products or Export Certificate
for other goods that require it)
Post-Export
Additional requirements by some destinations :
Loading Inspection by independent company
like SGS, Cotecna, Bureau Veritas and
others, certificate of inspection required by
some destination countries.
Non Radioactivity certificate, Quality or
Grade certificate, Analysis certificate, Weight
certificate, Clean Container certificate,
Packing list, etc, etc
2. Exporting
Documentation
YOUR INVOICE.
This is your main instrument to be paid, always be sure to
clearly indicate :
1.
2.
3.
4.
5.
6.
7.
8.
Product : Clearly describe it and its main quality specs.
Your company’s information, invoice number and date.
Price : With the Incoterms you agreed with your Sales Confirmation and the CORRECT
CURRENCY clearly indicated.
Quantity and Packaging
Shipment : shipment period within the contract and means ( marine, air, train, etc)
Payment terms : When, How and Where you will be paid.
Special conditions : If there is an special condition or special documents tied to your
contract or special permits, mention where are them on your invoice.
Mention your rules to solve disputes.
2. Exporting
Export
Pre-Export
Transport Insurance
The standard transportation insurance
to be paid depending on your
Incoterms, if you sold the product CIF,
then you have to organize the
insurance payment.
Risk Insurance
Also known as Export Insurance, it
covers your receivables against your
customer not paying for the product (if
the sale was open terms) or
abandoning the goods at destination
port. Very costly but needed in many
cases.
Post-Export
• WHO CAN PROVIDE YOU WITH RISK
INSURANCE ?
In Canada the EDC is your best alternative.
The EDC ( Export Development Canada) can
insure your invoice for up to 90% of its value.
Please do not confuse Transport Insurance (for
damages or losses that happen during
transportation) with Risk Insurance (Basically
insuring your invoice)
3. Post Export Activities
Pre-Export
An export operation is not finish until
you are fully paid and the importer
confirms you their total satisfaction
with the product received.
Be ready for export problems such us:
- Importer can’t meet financial
obligation after the goods arrived
- Market collapses and importer wants
to cancel order.
- Goods do not arrived in good
conditions.
Export
Post-Export
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Your best buyer is a satisfied customer,
always :
Give your buyer accurate information.
Market information, logistic information,
documentation information, etc, etc
Be sure you are shipping the right quality
and quantity
Always look for an alternative destination
for your product (always have a plan B)
4. GETTING PAID
Payment of goods exported are the
usual confirmation that a business
transaction is finalized. The most usual
payment terms are :
Advance payment at purchase confirmation.
Partial advance and balance CAD.
COD cash on delivery
CAD cash against documents
Open Terms at 7, 30, 60 o 90 days from arrival or from B/L date.
Promissory Note at xx days from arrival or B/L.
L/C or Letter of Credit, at sight? Or 30, 45, 60, 90, 120 days?
Is the L/C going to be confirmed, irrevocable and negotiable ? Are
partial shipments allowed? Are the documents requested the
right ones? Each condition cost money and corrections or
amendments to an L/C cost too. Who will pay for the
amendments??
4. GETTING PAID
HOW CAN YOU SECURE PAYMENT ?
You can try to secure payment or
lower your risk of not being paid in a
number of ways.
1. HAVE A CLEAR INVOICE
2. INSURE YOUR GOODS.
3. GET A RISK INSURANCE
4. HAVE A SECURED PAYMENT
INSTRUMENT LIKE AN L/C
THE MOST IMPORTANT OF ALL
IS TO KNOW YOUR CUSTOMER,
KNOW WHO YOU ARE SELLING
TO, KNOW THEIR BUSINESS AND
FINANCIAL LIMITS.
Good Luck in your Exporting Business!
Jose Zlatar
Directeur,Developpemnt des Affaires Amerique Latine
Business Development Director, Latin America
AGROPUR Export Group Inc.