Passages

2021 could have been known as the year of continued uncertainty. The combination of an ongoing pandemic, erratic economic conditions and lingering global tensions worked in concert to create a roller-coaster environment for international trade. In the United States, inflation climbed, the supply chain was stretched thin and scores of workers quit their jobs.

In spite of this, U.S. imports and exports were higher than ever. Now, policy makers in the United States must figure out how to manage an influx of commerce while keeping the domestic economy from overheating and navigating international relations.

What exactly happened in 2021?

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Many importers and exporters, especially beginners, assume that freight forwarders and customs brokers are two names for the same thing. I'm afraid that's not true.

Freight forwarders and customs brokers provide specific types of services, and each play an important role in international trade and international shipping. Many international transactions use the services of both forwarders and brokers, and sometimes a single company will do both.

Here's what you need to know about forwarders and brokers, how they fit in the international shipping process and specific examples of how they may be used.

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Incoterms 2020 rules are the latest revision of international terms of trade published by the International Chamber of Commerce (ICC). They are recognized as the authoritative text for determining how costs and risks are allocated to parties conducting international transactions.

Incoterms 2020 rules outline whether the seller or the buyer is responsible for, and must assume the cost of, specific standard tasks that are part of the international transport of goods. In addition, they identify when the risk or liability of the goods transfers from the seller to the buyer.

In this article, we’re discussing the Incoterm DDP, also known as Delivered Duty Paid.

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One of the most important considerations when it comes to international trade is how you are going to get paid for your exports. While relying on cash up front may eliminate the risk of non-payment, it limits your universe of potential customers as it can cause cash flow and other problems for buyers.

There are five primary methods of payment in international trade that range from most to least secure: cash in advance, letter of credit, documentary collection or draft, open account and consignment. Of course, the most secure method for the exporter is the least secure for the importer and vice versa. The key is to strike the right balance for both sides. This article focuses on letters of credit.

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Global trade drives the world’s economy. If you’re an importer or exporter, a freight forwarder or a customs broker, you see this play out every day. And you did long before the rest of the world took notice thanks to several years filled with volatility. That’s why, since 1935, May has been designated World Trade Month. It’s a chance to recognize the important role international trade plays in the U.S. economy. It's also a time for people learn about getting started as exporter or expanding their existing business.  

In honor of World Trade Month, the World Trade Month Association publishes a calendar of events taking place during May. Many of these events are free and most of them give importers and exporters an opportunity to learn more about the various aspects of global trade.

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Passages. We use them to move from one place to the next. We highlight them when we read to further our understanding of the world. We note them in our journals to remember where we've been and where we are headed.

Passages are an opportunity to move forward, improve our knowledge and prepare for what's next. That's why we've renamed our blog, Passages: The International Trade Blog. We want the name to reflect our goal to provide information that people involved in international trade can use to help solve a particular problem, get a better understanding of the import-export landscape, and move their careers forward.

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I recently got a call from someone trying to gain a better understanding of the differences between standard and routed export shipments (also called routed export transactions) and how responsibilities change when dealing with routed export shipments. 

Then, I got another call, and then an email or two, and so on—so perhaps you have these questions as well. Let me explain.

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Companies large and small must be attentive to their export processes to ensure compliance with any relevant regulations that govern their business. This keeps you out of trouble with customs authorities at home and abroad, and it makes financial sense for your business to run as smoothly as possible by minimizing any risks that could affect your bottom line.

Today’s article outlines nine key activities that demonstrate you are a trade compliance professional who takes export compliance seriously.

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Duty drawback is one of the least understood and most underutilized benefits available to exporters.

The concept of drawback was originally drafted in the U.S. by the Continental Congress of 1789 and was limited in scope to specific articles that were directly imported or exported. The rationale behind the drawback program is to encourage American companies to compete in foreign markets without enduring a price disadvantage from paying duty on imported merchandise.

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The U.S.-Chile Free Trade Agreement (FTA) became effective on Jan. 1, 2004. At that time, more than 85% of two-way trade in consumer and industrial goods became duty free, and as of Jan. 1, 2015, all qualifying products are now duty free.

To take advantage of the benefits for U.S. goods under this agreement, exporters will need to understand how to determine that their goods are originating or qualify for preferential duty treatment under the U.S.-Chile FTA Rules of Origin. U.S. exporters whose products qualify may provide their Chilean customers considerable savings. To claim those preferential duty rates, the Chilean importer must provide written declaration that the goods qualify.

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