How to Export from Canada. Presentation overview : What can you export The export process. 1. Pre export activities 2. Exporting 3. Post export 4. Getting paid. WHAT CAN YOU EXPORT? SERVICES GOODS or PRODUCTS We will concentrate in exporting or trading GOODS or PRODUCTS.
How to Export from Canada
Presentation overview :
We will concentrate in exporting or trading GOODS or PRODUCTS.
If we classify them by how they are defined we can call them :
The Export Process
Be prepared, execute precisely, follow up to improve!!!
Basic knowledge needed for international. trading:
Terms internationally accepted that provide rules for trading. Buying or selling terms are based on :
2.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)
DAF (delivered at frontier)
DES (delivered ex ship)
DEQ (delivered ex quay)
DDU (delivered duty unpaid) and DDP (duty paid)
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!
What happens if a supplier defaults me?
Special doc’s for high tech
Documents are very important specially when L/C’s are involved
When issuing your Sales Confirmation or Sales Contract, be very clear with:
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 ?
If all previous issues before loading the goods are covered, the Exporting process comes down execute the following :
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.
Basically there are 2 main costs to control:
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.
Pre-Inspection certificate is not required anymore to Peru. Good to check for other destinations.
Additional requirements by somedestinations :
This is your main instrument to be paid, always be sure to clearly indicate :
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.
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.
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
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.
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.