Posted on Thursday 21 June 2012 by Ulster Business

Alison Young

Extending supply lines overseas exposes an organisation to new commercial and operational challenges.

If the risks and costs of more complex cross-border supply chains are not properly understood, import purchases and export sales may not deliver the respective cost savings and profits expected.

Successful delivery of an export sale begins with agreeing the right Incoterms up front. Failure to properly understand the commercial implications associated with Incoterms can result in onerous terms being agreed to which are difficult and costly to execute. Companies should ensure they fully understand which party has responsibility for export and import clearance, who must arrange and pay for transportation and duties, and at what point title and risk transfers.

Do you need to engage the services of an import broker in the country of destination? Do you have the capability to prepare export shipping documentation? Who picks up the costs associated with transit delays?

It is also imperative that legal trade obligations are understood and adhered to. Failure to export controlled goods without a licence is a criminal offence, yet a recent report found that whilst 86% of the companies surveyed were trading globally, only 20% had a global trade compliance program in place to manage their shipments. All exporters must operate under UK and EU export legislation, which includes classifying the goods to be shipped and ensuring all necessary licences are in place.

Depending on the Incoterm, exporters may also be responsible for clearing the goods for import in the customer destination country, in which case they are also responsible for complying with the trade legislation in that territory.

Up front preparation is the key to successful export shipments. If you do not have the appropriate resources in house to effectively prepare export shipments, consider seeking external support to avoid shipments being executed at the expense of the bottom line.

For SME trade compliance, logistics and purchasing support, telephone Alison Young at AG Young Supply Chain Services on 028 9044 8309 / 07789 438076, email alison@agyoung.com or visit www.agyoung.com

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