International Trade Blog

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 FOB, also known as Free On Board.

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One of the most useful tools to help select the right international distributors is an International Distributor Screening and Selection Process that helps interested candidates self-qualify or self-disqualify as potential distributors (see my previous article). A critical element of the Screening and Selection Process is the International Distribution Prospectus (IDP).

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You’ve heard people talk about how to do the sexy part of exporting—the research, the schmoozing, the travel and all the marketing and sales stuff that people think about when they think about the glamour of international trade.

But what I want to talk about is the not-so-sexy part of exporting: the basic export documents required for international shipping. It’s the stuff you need to do—and do correctly—to successfully deliver goods and make money. I’d argue that this not-so-sexy part of exporting is more important than the sexier side but maybe that’s just because it’s what I’ve been focusing on for more than 25 years.

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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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There are many different parties involved in the logistics process—carrier, freight forwarder, NVOCC, 3PL, EMC, ETC, customs broker, etc.—several of which can be involved in a single transaction! Two of the most similar parties are freight forwarders and Non-Vessel Operating Common Carriers (NVOCC).

While most exporters can happily get by without knowing the difference between an NVOCC and a freight forwarder, there are some important distinctions between the two. In this article, I’ll discuss the specific functions of each and how to identify the right partner for your needs.

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As an exporter, you've probably been asked by your international customer for a certificate of origin to identify where your goods have been manufactured. In most cases, the customs authority in the country of import requires a generic certificate of origin that has been stamped by a chamber of commerce.

For years, the only option for exporters was to provide a paper version of the form that they had to deliver or courier to a chamber of commerce office to be reviewed and, hopefully, stamped. It was an expensive and time-consuming process.

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Product classification codes are required for most exports. They are used by the Census Bureau through the Automated Export System (AES) to help compile trade statistics and used by the country of import for assessing duties and taxes.

For some exporters, getting started with product classification can be difficult. “I need a Schedule B number. How do I find the right number?” “Should I just start Googling?” “Is there a recommended place to start?” These are all questions we’ve been asked, and today, we’ll address them.

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In my first article in this series, I discussed the role chambers of commerce play in exporting.

In this article, I'm focusing on one of the most useful services a chamber of commerce provides to exporters: export documents. Specifically, their role in helping you create a certificate of origin.

We spoke with Wendy Baggett, a certificate of origin guru and former president and CEO of a national chamber of commerce, to find out what exporters need to know about that process.

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I frequently hear from people who need help using or finding an export declaration document, and I cringe! The export declaration they’re looking for—officially called the Shipper’s Export Declaration (SED)—shouldn’t be used for exports anymore.

Here’s why it should be avoided, and what to use instead.

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