International Trade Blog

The word chaos is a metaphor describing how individuals and groups in a system, through lack of knowledge and understanding, make decisions that create chaos. Chaos Theory explains how a change in one variable can affect systems, deliveries, destinations, product structures, origins and packing requirements, resulting in delays, increased costs, loss of goods, loss of customers and loss of quality.

Continuous major market disruptions since 2020 have evolved from linear to complex, and constant change has created chaos in decision making and management strategies. Managers of small- and medium-sized enterprises (SMEs) are learning to lead in times of unpredictability, macrotrends, chaos, unstable and volatile markets, and destabilization.

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Many international traders were surprised by the Buy American rules proposed by President Biden soon after inauguration—they were expecting the incoming president to have a gentler approach to international trade than his predecessor. (See my previous article Buy American Legislation Importers and Exporters Should Watch.) The January 2021 proclamation offered broad guidelines and few specifics but signaled the direction the administration would take on trade: goods purchased by federal agencies would need to contain less foreign-made content and waivers would be harder to come by.

Six months later, the White House released more specifics in this fact sheet. The proposal requires that goods purchased with taxpayer dollars contain more U.S.-made content—60% as soon as the rules go into effect and 75% by 2029, up from 55%.

What does this mean in a practical sense to the trade community?

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

In this article, we’re discussing the Incoterm FAS, also known as Free Alongside Ship.

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Do you know the difference between HS codes, HTS codes and Schedule B codes? In casual conversation, exporters tend to use these terms interchangeably; they, for the most part, understand that these are codes representing classifications of products.

While it’s not wrong to use them interchangeably in casual conversation, it is important to understand the differences—if not, you could get into trouble, and your shipment could, too!

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I sometimes get calls from exporters who have been asked by their international customers for their AEO number for import customs clearance.

The calls are all very similar:

What is an AEO code, and how do I find out what ours is?

My short answer:

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Supply chain managers working for small- and medium-sized enterprises (SMEs) must take their alignment and collaboration with partners seriously. Technology is going to play a critical role in future logistics, and organizations without visibility (being able to see what is happening at all stages in the supply chain) are not going to be positioned for success.

Visibility in supply chain management is critical because the process is often complex, involving multiple tiers and materials coming from multiple origins. Shipping needs to be tracked to manufacturing sites and then ultimately to the consumer. Visibility also provides insight for many areas of your company: sales, marketing, distribution and contracting. When disruptions occur and quick decisions must be made, knowing what is available and where can seriously impact your bottom line.

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In my last article, I discussed President Biden’s January 2021 Executive Order on Ensuring the Future Is Made in All of America by All of America's Workers. Since then, his Buy American vision has grown to be a major part of his administration’s economic program.

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What a year and a half we’ve had. 2020 kicked off with the coronavirus spreading around the world, and concluded with a peak season that put all other peak seasons to shame. Global GDP slowed down by 4-5%, depending on who you ask. Supply chains had just enough time to fall apart before having to ramp up to meet e-commerce and vaccine distribution demands (at the same time, of course).

Not that 2021 hasn’t come with its share of excitement. Nearly halfway into the year, shippers are still dealing with the fallout from a week-long obstruction in the Suez Canal while imports continue to pile up on both coasts. 

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To say that 2020 didn’t turn out as expected would be an exercise in understatement. A combination of global economic disaster and trade-hampering policies marked the year. The coronavirus ripped through supply chains, disrupting economies worldwide. Trade wars raged. Policy changes kept importers and exporters in the United States on their toes. As the U.S. (and indeed, the world) struggles to overcome last year’s challenges, exporters have their own set of obstacles to grapple with.

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May is World Trade Month, and with it comes many events designed to celebrate the importance of international trade to the U.S. economy and to teach new and experienced exporters and importers about various aspects of international trade in this changing global economy.

This year's theme is "Growing exports in uncertain times."

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