Moderator: Linda Abbruzzese
June 26, 2007
1:00 pm CT
Coordinator: Good afternoon, everyone, and thank you for standing by.
At this time, all participants are in a listen-only mode. I'd like to inform all parties this conference is being recorded.
And I'd like to introduce your host at this time, Linda Abbruzzese.
Ma'am, you may begin.
Linda Abbruzzese: Thank you.
Good afternoon everyone. Thank you for joining us for our Webinar on Export University 101. I'm pleased to note that we have more than 100 people joining us for this Webinar today.
I'm Linda Abbruzzese, International Trade Specialist for the Marketing Communications Office for the US Commercial Service of the Department of Commerce.
This Webinar is being brought to you in cooperation by the Florida District Export Council and the US Commercial Service of the US Department of Commerce.
The objective of today's Webinar is to help US companies begin an export initiative and gain new skills in innovation and extending their international sales.
I'd like to welcome all Florida District Export Council members as well as the US Commercial Service (unintelligible) and members joining us from all over the United States.
In a moment, I'll turn the presentation over to Vince Daniels, Director, Executive Education, Nova Southeastern University. He, along with the other speakers of this Webinar, Kathryn Dye, Stephanie Heckle, International Trade Specialists of the US Commercial Service; Jerry Watterworth, Senior Vice President, International Trade Finance Group, Regions Bank; Al Redlhammer, President, Seariders Brokerage Corporation; Benjamin Jones, Regional International Sales Manager, FedEx Corporation; and Mary Freeman, President of Awareness Technology.
All will be available at the end of the presentation to answer your questions on the (unintelligible) topic. I'll provide their contact information at the end of the presentation so you can follow up in person if you like.
For those of you who just joined, you can still log on to the Webinar by entering the URL Web site and pass code instruction that were sent to you by email.
We do have a few housekeeping details to make sure everyone gets the most benefit from this afternoon's Webinar.
You will be able to hear the presentation via your telephone and view it simultaneously via your computer. If you're not hooked up to both, please take a moment to do this.
If you are experiencing any technical difficulties, please press star-0 anytime during the presentation.
Because of the large number of participants online, now more than 105, it will not be logistically feasible to take voice questions. However, we do invite you to type in questions on your screen as they occur to you during the presentation.
There is a box at the bottom of the screen in which you can click and type in your questions anytime during the presentation. We will compile the questions and present as many as time allows after the presentation.
Typed questions which are not answered during the Webinar due to time constraints will receive personal answers via email after the Webinar. In addition, all listeners will be provided with information for any individual follow-up (counseling), export assistance or market research you may need to pursue opportunities.
For those of you who just joined us and logged in, you can still join in our Internet conference.
Now, I'd like to introduce live online Mr. Vince Daniels, Director, Executive Education, Nova Southeastern University.
Vince, thanks for joining us.
Vince Daniels: Yeah, thanks. Thank you very much, Linda. And thank you, everyone, for joining us today for this exciting and extremely important presentation.
We are pleased and proud to present Export University, a program originally developed by the Florida District Export Council. Export University has been providing international business skills to Florida and US companies for the past two years.
There are three levels of programs in Export University: Introductory, Intermediate and Advanced. And these are typically delivered by international trade practitioners, people working in international trade and exports, many of whom who - are DEC members.
This presentation is extremely important on many levels. On the national level, the United States is losing the war on international trade. Our trade deficit has grown to over $800 billion per year. We need to be an export nation in order to maintain our standard of living.
On a level important to you and your companies, there are many reasons to export: increasing and diversifying sales, expanding markets thereby spreading risk, undermining foreign competition by entering other markets - other target markets, becoming aware of areas where investment may be beneficial, ensuring global competitiveness and adaptability, extending product life cycles through entering into additional markets which may be less developed are great examples of why American companies must export to stay healthy. And, of course, travel to exotic places.
The Florida District Export Council, working with our partners, the US Commercial Service, FedEx and Nova Southeastern University, has launched Export University to help Americans become better at all aspects of international trade.
Export University offers practical and - I'm sorry, predictable, reliable and affordable training. There are 56 DECs, District Export Councils, around the United States. Today's Webinar is a synopsis of the Florida DEC's Export 101. Export 101 is coming to a facility near you very soon.
I would like now to introduce Kathryn Dye, International Trade Specialist from the US Commercial Service based out of Fort Lauderdale. Her presentation is entitled, “Organizing for Export and Export Regulations.
Kathryn Dye: Thank you, Vince. Good afternoon.
My name is Kathryn Dye. I'm an International Trade Specialist with the US Department of Commerce, and I'll be covering the basics of exporting today with my colleague, Stephanie Heckle.
To start off, there are six areas that you will hear us touch on today: organizational and product readiness, market research, developing your strategy and marketing plan, promoting your products in target market, complying with US and foreign regulation and then assistance provided by the US Commercial Service to assist you in meeting your export goal.
So, let's get started by evaluating your product readiness. First of all, you may want to start by evaluating your product. This is where you do some real basic reflecting.
Think about what has contributed to your success domestically and consider similar demands for your product or service exist elsewhere. Ask yourself what the unique features of your product or service are, and do these features give you a competitive edge in particular markets or regions.
Other things to consider about your product may be if you have the ability to make necessary labeling changes, can you alter the ingredients or components necessary to fit in your markets. For example, changing electric cords to fit foreign outlets, or perhaps substituting ingredients in cosmetic products due to foreign regulations.
Can you instructions or your manual be easily translated? Can you provide after-sales service through your existing network?
These are items that you should become roughly familiar with in order to assess the cost of making these possible changes. Once you are familiar with the possible cost of these changes, you'll then have an idea of how large a potential order needs to be in order to justify a change.
This bring us to organizing for export.
Just a moment here because I'm trying to make sure I'm on the right slide for you all.
This brings us to organizing for export.
This is a critical area that companies commonly overlook when they're beginning to engage in export sales. Many new-to-export firms treat export sales as they do their domestic. Unfortunately, this is a mistake.
Appointing someone to handle foreign sales will allow them to develop specialized skills that will make them better sales people for your company. Eventually, they will be able to field questions from foreign buyers on issues such as exclusivity, shipping documents, service and/or training associated with your product, payment terms, freight costs and more.
Being able to respond to these issues and other concerns that the buyer may have will build a potential buyer's confidence in your firm's ability to complete the international transaction.
Separating international from domestic may be done at different levels within your organization. Some companies may specialize their teams by geographic region.
For example, international sales person for Europe or the Asia-Pacific region. Other firms may specialize by product. For example, an aircraft parts firm may have someone assigned to military sales while another person handles commercial sales.
Also, it is critical that the international sales person or team has direct contact with your company's president or CEO. Your team will be able to make important decisions and respond more quickly to opportunities. Management must be ready to commit resources to the support of the export (process).
So let's move on to market research.
You may begin exporting without any market research if your firm is receiving unsolicited orders from abroad. Perhaps, these buyers have seen you at a trade show or perhaps found you on the Web.
However, by doing a little bit of market research, you will be able to hone in on markets that have the highest propensity for sales, and therefore getting the highest return on your export marketing dollars.
To get you started, here are a few market research resources that our staff commonly uses:
Export.gov, which is our Commercial Service site, contains country and industry reports written by our overseas staff. This site is easy to use and you can quickly get detailed information specific to your industry sector in a particular market.
The next site that you see, www.buyusa, is also put together by the US Commercial Service. And by signing up on buyusa, you can opt to automatically receive, research any bulletins that apply to your industry sector specifically.
The Web site, www.strategis.ic.gc.ca, is a site that has statistical information which can also be helpful to give you an idea where products like your are currently being shipped. Most of these statistical sites are broken out by (HF code).
Census.gov also offers some statistical information.
And you can look up your (HF code) if you're not familiar with what it might be.
Here are some fee-based resources that you may want to check out after, of course, the Webinar today. Just to go through a couple of these, (COMPASS) is a directory of foreign companies. The site allows self-registry. So, although it's helpful, you must qualify any firm that you reach through the directory.
DistributorMatch is a database - a searchable database of distributors. We found that it's most strongly populated by firms within the European Union.
Now, after doing some research, you should now be ready to develop an export strategy and plan.
And export plan can be very instrumental in getting yourself organized. This is where you can begin to put your objective, target markets and allocate your export budget to meet those goals.
Remember, this is a working document that will change as your firm grows. And it is important, however, to clearly identify your goals and have somewhere where you can track your success towards meeting those goals.
Now, you will hear from my colleague, Stephanie Heckle, who will continue the presentation with promoting your product in target markets.
Stephanie Heckle: Thank you, Kathryn.
Now you have done your market research, decided on the best prospect markets for your products and are in the process of finding an agent-distributor or end user and have developed your export plan. It is now time to decide how you will promote your products in the target market.
This first slide gives an overview of some techniques to promote your products overseas. Some of these techniques you may already be using and the rest are easy to put into practice.
The first two bullet points on this slide mention using trade shows to promote your products to foreign buyers (unintelligible) domestic trade shows and key foreign trade shows.
One strategy that the US Commercial Service recommends that surprisingly few companies use is to create some sort of signage or brochure that lets foreign visitors to your booth know you are open to exporting and making international sales. You may be surprised of the difference this makes in attracting foreign visitors to your booth and having them speak with you.
Also, we recommend to our clients to be choosy about the trade shows you're participating in. Especially with overseas trade shows, they could be very expensive after paying booth costs, traveling, hotels, et cetera.
Advertising in key industry publications can give a promotional push. We can help you to identify the key publications in your industry in your target market.
Identifying distributors (by seeing) who other firms with complementary products (unintelligible) is a good way to have your products integrated into a line that the distributor is already carrying. This is a natural promotion technique since sales of these complementary products should result in sales of your products.
Working leads and referrals from other overseas distributors, international industry associations can provide key contacts for you either with potential distributors or even with end users.
This is also a good way that you may be able to get contacts for free by typing it - by tapping into their database or seeing who they may be able to recommend to you.
Holding targeted trainings or informational seminars in a key market -- we can help you with this.
And last but not least, promotional assistance through the US Commercial Service which we will discuss in detail a little bit later.
One issue that makes most US exporters (know this) is complying with US and foreign regulations. However, once you understand the US and foreign regulations that apply to your product and how to comply with them, it seems like much less of an obstacle and can actually make you more competitive compared to other US firms without this knowledge.
US products are regulated for export in order to keep them out of the hands of terrorists, drug dealers and other bad guys in general. Please keep in mind that for US export control purposes, the definition of the US product is very broad, and it encompasses anything that has touched US soil or even items that are produced overseas with a (dominant) US content. It is important to check what you are sending, to who, where and for what end use.
The US Department of State regulates products that have been specifically designed or modified for a military use. The Bureau of Industry and Security part of the US Department of Commerce regulates products that are dual use in nature.
Those organizations have Web sites on which you can access full information about products subject to US export controls, destinations for which you need a license and how to apply for a license as well as other information such as the ITAR, International Traffic in Arms Regulations, USML, the US Munitions List, ECCN, your Export Control Classification Number, CCL, the Commerce Control List, et cetera.
The Web site of the Bureau of Industry and Security is www.bis.doc.gov, and the Web site for the US Department of State Directorate of Defense Trade Controls is pmddtc.state.gov. They're both listed on this slide, even though the one for the Department of State is actually not correct, so we can send that out to anyone who may need it.
Depending on what you are sending and to where, you may need to comply with the regulations of a foreign government. Some things to consider are:
Each country's requirements may be different and are subject to change without notification. Therefore, it is important to stay up to date and to work closely with your appointed distributor or representative in country.
Is product registration required with their ministry? For example, medical equipment may need to be registered with the ministry of health.
Documents that may be required for entry. Al Redlhammer, our freight forwarder, will discuss some typical documents needed for export a bit later on. However, depending on what you are sending, you may need to consider other documentation such as a certificate of presale, certificate of origin if the product is being sent to a country which with the US has a free trade agreement, sanitary certificate or (BFE) certificate if the product is made from any cow part as this may not be something that is obvious, such as ground beef, but may be something more like (gelatin) made from (hogs). Some of these documents may need to be stamped by the country's consulate in the US.
It is also important to consider any regulatory standards if you are sending, for example, electronic equipment. Some common standards are the UL mark for the US, the CE mark for the EU and the CCC mark for China.
Be sure to understand what products need these marks and how to obtain them. Be sure to be aware of any labeling changes that may be required as well.
The following section gives a brief overview o the services that we, as the US Commercial Service, provides US companies.
I don't know if everyone on the call today has worked with us before, so I'll give you a bit of detail very briefly.
The US Commercial Service is a branch of the US Department of Commerce and is an agency of the US Government. It is our mandate to promote the export of goods and services from the United States particularly by small- and medium-sized business.
Basically, we're here to help you make international sales. The way we do this is through our vast network of offices worldwide. We operate offices in over 100 US cities.
You can work with a trade specialist closest to you in order to access all of our programs and services and to receive counseling on the export process and identifying target markets that are best for your product.
Overseas, we operate the Commercial Section of the US embassies and consulate in 87 countries. This network allows us to help you locate international buyers, distributors and agents, to provide export help at every stage of the export process, and basically to help you enter new markets faster and more profitably.
Here are some of the services that we offer.
(We've got) business matchmaking. Our Gold Key Service is designed you to introduce you to prequalify potential agents, distributors or representatives. We use information provided by you on your qualifiers for these overseas partners and set up a day or two of meetings with these individuals.
The International Partner Search is similar. But instead of conducting meetings, you will receive a list of these prequalified representatives that are interested in working with you.
The International Company Profile is designed for if you need a potential representative via your Web site or at a trade show and you want to get more information on them before appointing them. We can provide a full background check on this company.
Trade promotion events, which include catalogue exhibitions to display your brochures at trade shows for international buyers with the International Buyer Program which brings delegations of foreign buyers to trade shows and trade (unintelligible).
Market research. The Market Research Library is the market research that Kathryn Dye showed you on Export.gov. All of this market research is free.
And last but not least, our tailor-made program such as advocacy, single-company promotions and business consulting tailored to your business.
For more information on the basics of exporting and the services provided by the US Commercial Service, you can contact the trade specialist near you by visiting the link on this slide: www.buyusa.gov/home/us.html.
That concludes my and Kathryn Dye's presentation on the basics of exporting. I would now like to introduce Mr. Jerry Watterworth, Vice President of the International Trade Finance Group at Regions Bank, who will speak to you about managing payment risks and finance the sale.
Jerry Watterworth: Thank you, Stephanie, and good afternoon everyone.
My goal is to address the banking and financial considerations related to exporting. We'll begin today by reviewing the various methods of payment available to exporters, and we'll then discuss some financing options for export transactions.
The best and preferred method of payment for any exporter is cash in advance. This way, the exporter has the payment prior to shipment.
Generally, wire transfer is the best option because the cash is in the bank.
The check may only be as good as the paper it's written on since it actually has to go through the banking channels to be collected. A check drawn on a foreign or in a foreign currency can take even longer to collect and may cost more to be processed by the bank.
And finally, credit cards may be taken as a method of payment. But be aware that credit card fraud is a major problem particularly with international sources.
If payment can't be collected in advance, the next best alternative for an exporter is the use of a letter of credit. A letter of credit is issued by a bank on behalf of an importer in favor of an exporter. ith the LC, the bank promises to make the payment upon presentation of the documents called for. In short, a letter of credit substitutes the credit worthiness of the foreign bank for that of the foreign importer.
It is common to ask for a confirmed letter of credit. If the exporter is uncomfortable with a foreign bank or country risk, he may ask that the LC be confirmed by a US bank, which shifts the payment risk to the bank providing this service.
And transferable and back-to-back letters of credit are similar in that they use the incoming export LC from the foreign bank and a portion is passed on to the supplier. A transferable LC is a useful tool for exporters who are sourcing the goods from a third party.
This diagram outlines the steps involved in a letter of credit process and may be reviewed later at your convenience.
Letter of credit are preferred for many reasons.
The importer is assured that the goods ordered have been shipped and the payment is not made to the supplier until the shipment has been made.
An exporter may prefer a letter of credit because it provides a bank's promise to pay, not the buyer. Banks stand in the middle of the transaction, providing additional assurance to the process.
And finally, the exporter can use the buyer's credit to obtain the goods through the use of a transferable or a back-to-back letter of credit.
If getting cash in advance or a letter of credit are not an option, the third payment method is a collection. With the collection, the export documentation is sent by the exporter to the collecting bank which exchanges the title documents for the payment from the buyer.
Under a collection, banks do not put their credit on the line, they simply act as an agent to hand over documents in exchange for a payment.
This is a diagram of the collection process which you can also review at a later time. Again, the banks are simply exchanging documents for a payment.
Using a collection is much riskier than a letter of credit. The importer has to rely on the exporter to ship exactly what was ordered, nobody is examining the documentation or the shipment.
Also, the buyer could back out of the transaction, and the exporter has no assurance that the payment will be made once the goods have been shipped. Therefore, collection are a simple and inexpensive payment method, but are less secure for all parties than using a letter of credit.
And finally, the fourth payment method is open account. Under this method, the exporter simply ships the goods and waits for payment as agreed. This is the riskiest payment method and is not recommended where the exporter does not know the buyer well.
If open account is used, we recommend the use of credit insurance to mitigate the risk of collection. If the payment is past due, the exporter simply submits a claim to the insurer.
A foreign exchange tool should not be overlooked by exporters since quoting in foreign currencies can often open up doors for new sales opportunities. The quote can be structured using a forward contract or window to protect the exporter from the currency fluctuation risk.
Be advised that this makes sense with most readily-tradable currencies, and we recommend consulting an international to determine the feasibility of this option.
In summary, we recommend that the exporter be proactive and (direct the) transactions after considering the alternatives and prioritizing them. Be clear upfront and name the payment method. If using a letter of credit, request a draft copy in advance for review by the bank and the freight forwarder. This is free advice.
Next, we'll review the financing options for exporters.
The availability of working capital is often the main determinant in whether an export transaction is successful. We'll review the use of financing tools, including working capital sources, for exporters and foreign buyers.
First and foremost, we recommend tapping the credit of the foreign buyer to avoid using up your own credit capacity. If you're sourcing the goods from a third party, use a transferable letter of credit from your buyer and pass it on to the supplier.
Another tool is the use of the time letter of credit. Once the shipment is made, instead of waiting for payment, the exporter can ask the bank to discount the payment. By doing this, the exporter can convert the receivable to cash and use the working capital for other transactions.
We'll briefly review the use of Export-Import Bank services for exporters, which is a government agency established to support US exports and job creation.
The programs of Ex-Im Bank may be summarized as follows:
Working capital support and receivables financing for the exporter -- the first two points.
And short- and medium-term financing directly to the foreign buyer -- the final two points.
We'll briefly examine both.
US-based exporters can benefit from these programs by obtaining a working capital guarantee from Ex-Im Bank. With the guarantee, the exporter's bank will lend working capital using the inventory and receivables as collateral.
Another option -- the second column -- is to obtain credit insurance on the foreign receivables. Banks may accept the insurance as collateral and lend working capital to the exporter.
Under both programs, an exporter is able to use its foreign sales as a basis to obtain working capital financing, improve cash flow and leverage its business.
An example of a working capital guarantee is as follows.
An export of auto parts needs working capital for inventory and to extend terms to its foreign buyers. The solution was a working capital guarantee for Ex-Im Bank which allowed the exporter to obtain a line of credit using the export inventory and foreign receivables as collateral. This has allowed the company to tap its existing resources and further expand its foreign sales opportunities.
Shifting to programs for foreign buyers, Ex-Im Bank offers guarantees or insurance to finance foreign buyers directly. This can include both short-term and medium-term financing up to five years depending on the product.
In this example, the Dominican Navy wanted to buy new patrol ships. Since the US supplier did not have the ability to finance the sale, a guarantee was provided by Ex-Im Bank and the Dominican Government received direct financing for this purchase. This can be arranged for a wide variety of US-sourced goods and services.
(Unintelligible) is another option for exporters who would like to offer financing to foreign buyers. (Unintelligible) is similar to factoring in some ways, but it applies to foreign sales and receivables. It can be used to finance 100% of a sale, and unlike Ex-Im Bank, may also be used to finance non-US content transactions.
In summary, the most successful exporters understand the impact that cash flow and risk have on their business model. We recommend that all exporters address their working capital need by meeting with their bank to explore the options available.
Government assistance programs may also be available including state programs, the Small Business Administration, which also has its own range of programs, or Ex-Im bank. And finally, the use of credit insurance to expand sales and the discounting of receivables can be effective sources of financing for exporters.
Thank you for your attention today. And now, I'd like to turn this over to Al Redlhammer, President of Seariders Brokerage Corporation, who will discuss international logistics.
Al Redlhammer: Thank you, Jerry.
Okay, you followed through on the suggestions made by Kathryn and Stephanie, and marketed your products and finally made that sale. You've taken notes on Jerry's financial suggestion and have agreed on the terms of sale and have either received a wire transfer or a letter of credit. Now what do you do?
Well, if you've been doing your homework, you've already talked to a logistics partner and can now take the next step. If not, we need to talk.
A logistics partner.
Let me see if I can find the right slide here. Hold on a second.
There we go.
Okay, a logistics partner. That's a phrase we've been using to describe a service company that can simplify your export program by taking over much of a detail of moving your merchandise from your warehouse to your customer's front door. You have various options open to you, and in this part I hope you give you a brief overview of these.
Option 1 - I think (I'm out of pace) here.
Do it yourself. While it's important to be familiar with the details of how your merchandise gets to market, unless you have extensive experience in international shipping, documentation, export regulations, letters of credit, customs regulations, et cetera, et cetera, doing it (unintelligible) yourself could be time-consuming, frustrating and could actually create unexpected problem. While you're not obligated to use a logistics partner, we highly recommend you consider one especially at the outset.
Let's consider some of the other options available as a logistics partner.
Looking from my freight forwarder file, I think we're out of pace here.
The freight forwarder. People and companies that coordinate shipping for other have been around for a few hundred years. The process of moving cargo across national boarders can be complicated, and the forwarding industry has grown throughout the world as a result.
In the United States, ocean freight forwarders must be licensed by the US Federal Maritime Commission and must be bonded as a requirement of that license.
The FMC now refers to freight forwarders as Ocean Transport Intermediaries, or OTIs, and all OTIs are required to have their license number prominently displayed on stationery and in their offices. The licensing process includes a background investigation for experience and financial responsibility.
A forwarder that handles air freight should be recognized by IATA. That's the International Air Transport Association (who) also does an extensive background check into experience and (finances).
The air freight forwarder will coordinate the movement of the order from your location to your customer's destination per the terms of sale. The forwarder organizes and completes all required documentation, including bills of lading or airway bills, export declaration., and also organizes and completes all required documentation for letters of credit, including drafts, and actually to the presentation to the bank.
The forwarder can also assist with interpretation of export regulations and can provide a complete transport cost analysis, usually in advance, for any shipment, all of this for a simple negotiated fee per shipment. What a (burden).
Because of a daily involvement in shipping and trade, the forwarder builds relationships with carriers and regulatory agents and is familiar with the latest changes and best options. The forwarder is not tied to any particular carrier so he can find and negotiate the best rates for his client. Think of your relationship with your CPA or your attorney.
The nonvessel operating common carrier, which is the slide that's up now, is commonly referred to as the “Shipless Ship Line.” Simply stated, an NVOCC is similar to a freight forwarder except that the NVOCC is authorized to issue its own bills of lading and accepts common carrier liability for shipments handled under its own bills of lading, similar to a vessel operator.
In order to be authorized by the Federal Maritime Commission, this company must undergo the same background investigation as a freight forwarder, OTI, (Unintelligible) in Washington with the Federal Maritime Commission and post a larger surety bond. The bond is there to protect the public.
By the way, vessel operators, even those that are foreign-owned, they don't have to file a bond.
The NVOCC operates by contracting for space on vessels operated by other carriers. The NVOCC, by consolidating the volume produced by his client, can guarantee a volume sufficient to secure a substantial discount from the going rates.
He then resells the space to clients at a rate somewhat lower than the client would have to pay if they did this directly with the vessel operator. Essentially, he buys wholesale and sells to you at wholesale plus. He essentially split the savings to produce his profit.
Most freight forwarders -- OTIs -- are also licensed as NVOCC.
The integrator is familiar to most of us as the company that gets the documents to their destination overnight -- companies like FedEx, UPS, DHL -- and has become a viable alternative to the US Postal Service.
The integrator is usually a larger company that has a significant capital investment in trucks, terminals, aircraft and people. This company depends upon large volumes of freight to support its network and acts as a one-stop service, providing documentation, trucking, air freight, customs brokerage and delivery. In short, a big company.
How do I choose?
Well, generally speaking, the services offered by integrators have involved - have evolved from the original business model, which was based on courier services for documents and small packaged shipment.
Recently, integrators are moving into the large package and full container business, both by air and ocean. The freight forwarder has been doing this from the outset.
The major difference you can expect between utilization of an integrator versus a licensed forwarder really boils down to size versus personal service.
Shipments quick, small and simple with no personal service required, the integrator might be a good initial choice. You can always switch over to a forwarder if problems occur.
If you're looking for a long-term relationship with a company that will become familiar with your needs and requirement, a company that will become intimately familiar with your business and provide a personal service, you might talk to a few forwarders.
A forwarding company is usually smaller, maybe family-owned, and will provide a more personal service level. Better for complicated requirements -- letters of credit -- and where quick access to an experienced who know - to experienced person who knows your business is only a phone call away. Obviously, I'm biased -- I own a freight forwarding company.
Okay, we've provided some options on professional logistics partner. Now, let's discuss some of the details of your export shipment.
First, the contract of carriage.
You may not know it but a bill of lading is a contract between the shipper, you, and the carrier. And it has some very important legal language that affects your liabilities and your rights.
Read the back. Most bills of lading are similar in the language that's printed on the back. This language has evolved over hundreds of years from the time ships had sailed to the present.
I'm sure you'll find some archaic phrases inside; but believe me, these phrases can help or hurt you. A short session with your freight forwarder will give you an idea of what they mean. Remember, ignorance is no excuse or defense.
The airway bill, the other contracted carriage.
Again, read the back. Limited liability in this case will be somewhere around $20 per kilogram.
Now, let's discuss some interesting facts on both of these.
COGSA, C-O-G-S-A. That stands for the Carriage of Goods by Sea Act. All shipments by sea that engage in the commerce of the United States are covered by this legislation that limits the liability of ocean carriers to $500 per piece, package or customer and freight unit.
Wow. You can ship a piece of equipment that's worth $200,000, and if a carrier breaks it or loses it, they only have to pay you $500. That's right.
Also, if you load a container at your warehouse, and as a prudent business person, (unintelligible) before it leaves, that container could be determined to be a single freight unit. And no matter what's in it, the carrier's liability could be limited to $500.
Now, I suggest that you read the front part of the bill of lading or the airway bill, especially that part that says “declared value.” It's usually around the middle of the form.
You have two choices.
You can fill in the value of the shipment and the carrier will accept liability for the total value of the shipment and will charge you an insurance premium, but that insurance premium will be far greater than if you purchase cargo insurance on your own.
If you choose this option and something happens to your shipment, you'll still have to file a claim with the carrier, wait for the carrier to process the claim, which can take quite a while, and will require consistent follow-ups.
Or, you can arrange your own cargo insurance. We'll cover this in a minute.
Export documentation. It's been said that fuel of international trade is paper. And that's not too far from the truth as you may have already discovered. A typical export transaction from the US will have commercial invoice produced by the exporter; a certificate of origin produced by the forwarder and legalized by a chamber of commerce; the export declaration which the forwarder can do or else you can try to do it yourself through the Internet; an insurance certificate; a bill of lading or an airway bill; a packing list; certificate of presale which is not always required but it might be possible.
And if a letter is involved, it could be any number of additional documentary requirements (unintelligible) to the package. Additionally, export licenses may be required for certain items.
So, as you can see, paper becomes important. Your logistics partner will provide most of the required documents and the experience and knowledge to get it right.
You thought I was finished with regulations and compliance? No chance. There may be laws and regulations in the country of destination that will affect your ability to sell and ship your product.
As you can see by this slide, you need to be familiar with your customer's local regulations in order to deliver a product without problems or delays. Again, by utilizing destination agent, your forwarder can provide valuable information and services before the shipment moves.
Now, (unintelligible) export controls and licensing is enforced, and violations can be serious and costly. Your best resource is your local Commercial Service office who will guide you through what can be a complex puzzle. Not all products are subject to export control. In fact, most are not. But it's your responsibility to know about yours. Your forwarder can also assist. And penalties can be mind-boggling.
Okay, we're back to protecting your cargo and knowing your rights and liabilities.
One of the best ways to simplify and minimize problems when a shipment goes astray is to have - insure that shipment before it left. After the loss, it's too late.
If something happens to your uninsured shipment, you'll have to file a claim with the carrier. To paraphrase a saying, it's sometimes easier to pass a camel through the eye of a needle than to file a damage or loss claim with some carriers. The fact is, carriers hate to pay claims and they will do everything they can to pass liability on to someone else.
Also, remember COGSA and limits of liability in the back of the bill of lading? You might have to file a suit in order to collect -- even if everything is in order. Insurance premiums on general cargo -- not high value (in target cargo) like computers and so forth -- will unusually less - be less than 2% of the value of the shipment and are a real bargain when there's a problem.
So, in conclusion, you can torture yourself or you can find a logistics partner that will become an integral part of your export program and allow you to concentrate on what makes you money -- and that's marketing your product.
Now, I'd like to introduce Ben Jones, Regional International Sales Manager of FedEx Corporation, who will now provide a view into the integrator's potential as a logistics partner.
Benjamin Jones: Thank you, Al, and good afternoon everyone. I'm certainly very excited to be a part of this fascinating Webinar. Additionally, I applaud all of you for understanding the importance of expanding your business model beyond the US borders.
As we all know, a seismic change has occurred in the global trade evolution. One significant change is rooted in leveraging e-commerce applications to increase sales or (calls) and manage your supply chain.
In the context of my presentation, export supply chain management simply means the facilitation, compliance and visibility throughout the export process. Therefore, I would like to briefly review three e-commerce areas for consideration which will enable you to help manage your export supply chain. They are: shipment processing, shipment compliance and shipment visibility.
There are many options available to help you manage your business. An effective tool should provide diminished rate of controls so you can control usage and access regardless of which (size of) company you are and how many shipments each day you process.
There are some options that are suited for multiple users shipping small quantities of packages, say, 25 or less, and other systems that are better suited for single and (multilane) shipping stations.
In most cases, you can have a single administrator or a group of users who have been given administrative privileges to centrally manage shipments that are processed by multiple individuals from different locations within a company all through the convenience of the Internet. The beauty of this is that there are options and choices, and you get to choose the one that best fits your needs.
Some questions to consider. Do you need centralized control over a large or small number of decentralized users? Do you need a shipping solution for your entire company that resides outside your firewall? Do you need access to shipping information 24 hours a day? What about the ability to mandate referenced field controls and default calls codes?
Relative to compliance, the term “We don't know what we don't know” very much applies to the global marketplace. There are many tools and resources to help you find out what you don't know and what you should know to comply with rules and regulations that will ensure smooth shipment movement.
As you begin or continue to scope the variety of tools and resources available, we recommend that you look for one that is comprehensive that contains the needed information and tools to help you do it right the first time. International shipping can be complicated but it does not have to be.
When you look for a tool, find the required international document for import and export that is comprehensive enough to include at least 203 countries based (upon) shipment and commodity information.
Look for one that will estimate duties and taxes, one that would act as a regulatory advisor, one that will provide country profiles, Denied Party screening, as well as a very comprehensive international resource center and one that also provides product profiles.
Integrated and rich e-commerce solutions exist today such as this to help you manage your international business, an integrated tool that enables you to gather the right information, process your shipment correctly and keep yourself compliant all from one Internet site.
Now, here is an example of a duty tax estimation tool. Duties and tax estimation has taken the mystery out of international shipping and enables better cost control. When the correct tariff code description and value of an item is known in advance of the product movement based upon the country of origin and the country of destination, companies can now obtain advanced estimations of what the duty and tax will be.
Denied Party list. Another important feature to have access to and learn to use is the Denied Parties list. There are multiple ways to access the Government's list. Here is one example of a tool that is very easy to use and would give you the vital information that you need.
One of the most important tools you should have is one that enables visibility to your shipments, knowing that your carrier of choice has it, that it has left the US, that it has entered the country where you were sending it, that it is being processed through customs, and any customs (unintelligible) as well as confirmation your company has received the goods. All of this information is available to you today.
All of these features will enable you to have the visibility you need to keep all of your shipments in view and to proactively prepare for delays. If you know about the tedious situations in advance, then you are better prepared to assess and work through the viable options.
Visibility is oftentimes more important than the shipment itself. Then you repeat myself. Supply chain visibility is often more times important than the shipment itself.
The result, an increased ability by your customers to plan and to use their time and resources widely, which translates into an increased level of confidence in you.
The latest technological changes that create visibility to your supply chain -- visibility is what will keep you ahead of the game and enable good decision making to ensure you customers remain completely satisfied, which results in more business for you and enhances your reputation as a quality company. Tools to help you now what you don't know can be the key element that makes you company successful.
You are not alone. There many companies wanting to expand globally for the first time and/or enter a new market with their products.
The good news is that there are tools and resources to help you. An effective e-commerce solution would ensure you manage your program as effectively as possible utilizing the latest in technology. You can make your global expansion strategy work very well through knowledge and visibility.
Thank you for your time today. And the next topic you'll be hearing about is finding customers overseas by Mary Freeman.
Mary Freeman: Thank you very much.
Okay. Hello everybody. I'm, Mary Freeman from Awareness Technology, and I'm here to tell you about how we found customers overseas.
Exporting ca be very educational and also a very rewarding experience. And it certainly is for us.
Exporting is really for everyone. And, you know, the most important lesson that we've learned from our international travel is not how different people are, but instead how similar we are.
We focus on differences like food and clothing and language because they're very interesting to us. But in fact, what, you know, the things that really mater to people are basically the same -- they have the same goals and the same interests in (life) from country to country.
So, if you have a product or a service that works well for people here, then most likely you're going to find other people in the world that have a similar need for your product or service.
I'm going to use our company, Awareness Technology, as a case study for this segment of the seminar to begin with. I'm going to tell you a little bit about our company, and then I'm going to show you how we have used some of these techniques and lessons that you've heard in this seminar in a real practice.
(We're a real) company located in Palm City, Florida, and we design and manufacture economical laboratory instruments. In 1989, our sales were about $1 million and everything was sold in the United States. In 2006, our sales were over $60 million, more than 70% of that is direct exports and we're selling in more than 100 countries.
In this slide presentation, first we're going to show you in just one slide what we have done with our particular company and our product. And then, I'm going to take step by step more generally how - to show how you could do this with any company with any products.
And just the last couple of slides will show you a few risk management tips and some problem solving ideas. Hopefully, you can benefit from experiences that we've had along the way.
Okay. In this slide, I'll show you exactly how we have done it.
Awareness Technology went to a show called MEDICA. This is held in Düsseldorf, Germany every year. We went in 1989, and since then, we have had a booth there every year. Manufacturers and distributors of medical products go there from all over the world. (Now), 70 countries at least are represented there.
We also go to a show in the United States; the American association of clinical chemists have an annual meeting. And we go there because foreign distributors come specifically to that show to shop for American-made products.
We also have a Web site and we run one or two ads in the International Trade Journal.
We screen for potential distributors that we pick up from those (bits of) advertising, and we set up agreements with the distributors that are reviewed on an annual basis. We correspond by email and fax, mostly email, and we have occasional visits to those distributors.
And one thing we do is we invite a lot of feedbacks from our distributors and ask them to ask their customers for feedback. And we take all of those comments very seriously. We get a lot of information back.
After some time selling, you get some word-of-mouth advertising. And that's a tremendous help (too).
Until recently, we sold everything under a single brand name, Stat Fax. So we've built up a lot of name recognition. And we also offered our products under a private label.
This enabled us to have more than one brand in the same territory and also allowed our major customers to build up their own brand names. The little picture you see of a product in this slide is one of the private-label products.
And then, once you get this established, you can continue to grow your sales by just adding more international distributors country by country and adding new products to those same distributors once you've developed this distribution network.
And a few years ago, we set up an office in Dubai to take care of our Middle Eastern distributors, and we have plans to use this concept of regional distributor offices in some future areas because we're finding this to be very effective.
Now, this might look like a rather easy process. But in fact, we did learn a lot from trial and error. So maybe, I can shorten your learning curves by giving you the benefit of some of our experiences and help you get started.
Because of the high cost involved and the difficulty with enforcement issues, you're really going to have to do some homework regarding intellectual property rights for your particular products.
We have had some really mixed experiences here. And I think if you have a product that's just very, very easy to be copied, you're really going to have to consider there might be some countries where it just isn't a good idea to go into right now.
When you're looking for distributors, I strongly recommend that you represent yourself. Our first year, 1989, we saw that we were so naïve about this. You know, we would hire one of the experts to represent us. But believe me, you are your best advocate.
Without the middle man, you can do so much more. And you improve your communication, you're much more flexible in your negotiation, everything happens faster and you learn faster.
Communication is the major key to everything. You want to constantly facilitate it and require it for the people that you work with. Keep your literature very simple, drop all the legal language, use pictures if possible and wherever possible. Keep things very simple.
So you want to get started and you say, all right, where do we begin? Well, if you have no idea where to - where in the world you want to begin, you can do like we did and just go to an international trade fair and see who's interested and let them tell you.
And then later on, if you decide, okay, I want to pick a certain region like, say, China, for example, then you can, you know, choose a specific national exhibition and so on.
But for deciding, you know, where to begin, when you have a certain population in mind, you have to read up on that population. You're going to want to see can they afford my product, do they have interest in my product.
And for this, you know, you need to get your hands on some of that free market research. There's a lot of information available. And the Internet, the trade journals, a lot of business organizations advertise to trade fairs so you can find out which ones are the biggest ones and where they're held and, you know, where you get the exhibitor information.
Getting information about exporting has never been easier than it is today. There's a lot of information. I only wish it had - these services had been available when we were getting started. So information is readily available. Start with research.
The next thing that's important is that you -- you yourself know your product, know your company -- actually want to prepare for this major exhibition. Prepare a small booth because you don't what to spend a lot of money on this first experiment.
But if possible, you want to bring samples or working models of your product. A working model is like a picture. It'll speak for itself and you'll overcome the language barrier. You will need to bring some product literature, some company literature and rent a small meeting space.
And if it's foreign show, it's a very good idea to bring some snacks or beverage to your stand to show hospitality. I know in the US, we don't do that (so customarily). But in foreign shows, they usually do.
And if possible -- and this works very well -- go as a speaker to the seminar or the meeting where the exhibition is being held. Then you're going to be recognized as, you know, the American or foreign expert in your field. But whatever you do, go in person.
Another thing that you have to do while you're at the show besides show your product, you're there also to assess a general and regional interest in your product and evaluate with an open mind the suggestions that people will make for changes in your product.
You'll also want to take a look at the other stands and check out the competition for that particular area. And finally, of course, you want to collect all the contact information from the - and the company profile from the potential distributors.
Okay, so you've done that, you take all that stuff home and you screen through the potential distributors, applications and so on. Now, we usually start with a questionnaire.
And one of the most important questions on there is, what other products they carry, what other manufacturers are they distributing for. And then we use those as references. You can ask those people what kind of track record and capabilities these particular distributors have.
It's also important to do some credit checks. And even if you're going to get involved by letter of credit where you're going to substitute a bank for - a bank's credibility for the customer's credibility, you still want to make sure they have a substantial bank and a trustworthy banking institution.
And another good thing to check out at this point is - and this is something I have not personally done but I've heard they're available is International Chamber of Commerce has free information on a lot of international distributors. So this would be a good point to - a good time to check out and see if there's already other information about this particular distributor's track record.
The next step is pretty important here because if you don't study the market, how are you going to be able to judge what the distributor tells you about his market and his country if you don't know about the place?
So, we'll have to do things on our own too, like make sure it's legal to sell your product in that country and find out what the regulation and requirements are, you want to know who the competitors are and, you know, what some of the rules and regulations are yourself so you can judge what people are telling you; and that gives you an idea of how honest and straightforward the people that you're working with are to see a lot of differences between what they telling you and what you're reading and you might question the relationship right from the beginning.
Also, you need to know something about who are your customers and what do they believe in so you'll have an idea about the culture and how you're going to present yourself, and what are the rules of etiquette in that particular country so you'll have a chance to presenting yourself when you come for a visit.
Once you choose a distributor, you need to work out all the terms for the business deal. And I suggest sticking to very plain, clear, English, not a very complex document.
(It's really doing) some give and take. If you're going to do something like offer them exclusivity, for example, then require them to do something in exchange.
Like maybe, in that case, they should pay for and carry out the local product registrations or make the foreign language translation of your own manual or something in exchange to be a give and take.
Insist on regular communication. We require a monthly communication whether they're doing well or poorly.
Work out some prices, terms, logistics -- everything -- in advance and plan for some kind of training -- product training or whatever.
And while you're doing this, remember your distributor is going to be your customer. So you want to make sure that he's making money selling your product. If you have some profit, don't worry if he makes even more profit than you do.
The success of your distributor translates to your success. So you have to help this distributor get started. You might need to adapt the product a little bit to their language or the environment, the power requirements.
Train the distributor how to install, operate, repair the product, set up a service center, send them logos, posters, things like that. You may want to attend one of their seminars or events.
But one thing you don't want to do is do not their marketing campaign because if you did a good job selecting this dealer or distributor, they know how to sell in their particular culture in their market. They have their contact and they know how to do this work better than you do. So, that's the one thing you don't want to do.
I definitely recommend visiting the distributor, and I also suggest doing this after a few units are already in place. Visibility of the foreign partner does a lot to help sales, and you also need to get some feedback from seeing the product in use in their lifestyle. You'll really learn a lot about how other people use your product from seeing it in use.
And Step 10, communicate, communicate, communicate. Like I said, we require monthly, you know, whatever works. You have to have some news back and forth. If they're not talking to you at least once a month, they're not working on your product.
Now, my last couple of slides here, the text is too small for you to read, I'm sure, but I think you're going to get copies of these anyway. So, I'm just going to go over a couple of points here.
When you're trying to choose a distributor, don't worry so much about if I pick the right one or the wrong one as building into your agreement some protection of how to get out of the deal if you have picked a deadbeat.
I definitely recommend if you're a manufacturer, keep the rights to manufacture your product.
Thirdly, if your not getting prepaid, make sure every shipment is insured.
And next, get distributor's advise on the wording (for pro formas), but never, never -- and they will ask you this; I've been asked 100 times at least -- under value or make false claims.
Everybody is going to ask you to do this and they're going to say, oh, everybody else (lets them) do it. But just tell them, I'm sorry, my company doesn't do that.
And definitely recommend visiting the country at least from time to time. Let them know that you're not that far away. Sometimes, they'll tend to try things thinking that, you know, you can't see them.
And my last slide, let them know upfront -- and make sure they let you know upfront -- about delivery dates because there are some enormous penalties, some of them very long-lasting. Like, the consequences can be things like you'll be blacklisted from ever bidding again on certain government tenders or contract or from ministry of health.
If you are late delivering on certain tenders or contracts, so be absolutely sure that it's - information about delivery is upfront and that you're able to keep your delivery promises, you don't overextend yourself and get into a situation where you really close the door on yourself.
Gifts and favors -- you're going to be asked for things that's outside of the American culture. These things regarded a lot differently than they are here. So, what you'd want to think about it, well, let's try to make this very thoughtful and generous looking but not of monetary value.
And last but not least, I recommend a very reliable freight forwarder who really keeps up with the ever-changing rules and regulation. It's a lot to look after and it's so much easier to have somebody else do it for you. You're not relieved of the burden of responsibility. But if you have a good freight forwarder that you can trust and work with, it makes exporting a lot easier.
And I lied -- I have one more slide. This is my last slide, though. No more lies. I just wanted to let you know that even though we've had a lot of experience over the years, we still have problems.
And it's nice to have some resources to help you out when you run into a snag, and resources like the US Commercial Services have proven to be extremely valuable to us.
And we have used them for a lot of things. But the most beneficial thing is that they have local contacts. Everywhere, all around the world where we have needed to have somebody (on the spot) or in this city or that city, we've been able to find somebody locally who knows and understands the particular local regulation to help us out.
We've also used them to help us with regulations, international regulations. If somebody tells us something that seems like a really unreasonable claim, we can check it out and see if this is for real or not for real, dealing with some regulations and, you know, getting third-party authentication and things like that.
So, Internet has been really useful in getting information, but US Commercial Services have been the most helpful organization to us.
I thank you all for participating in this Webinar. I hope that you all have a lot of success in your exporting adventures.
And now, back to Linda.
Linda Abbruzzese: Thank you, Mary, and thank you, Ben and Al, Jerry, Kathryn, Stephanie and Vince for your presentation.
Now, we'll have a sampling of more than 23 questions submitted by our participants. For those of you whose questions we aren't able to get to during the presentation, if you left your email address when you registered, you can expect a reply via email.
I also like to let everyone know that if you would like a copy of the PowerPoint presentation slides, we will have them available on our Web site. The exact date isn't confirmed, but we will eventually have them. But if you still want slides, I can send them to you by email.
And also, in addition, we will have this Webinar archived for view as well, and we'll let you know when that will be available on our Web site.
Okay, I'll start with the first question for today. It's from (Steve Pollonis). He wants to know, are letters of credit very expensive so that we can avoid them? And how do companies deal with this cost? And there's another added question to this. Can you add it into the proposal?
Jerry Watterworth: And this is Jerry Watterworth and I'm assuming that question's for me.
Linda Abbruzzese: Yeah. I think it is for you, Jerry.
Jerry Watterworth: Well, letters of credit can cost - as an exporter, if you're the beneficiary of an export letter of credit, they may cost about a quarter of a percent (on) examination of documents that are presented. And that could be deducted from the payment or the proceeds.
Those costs can all be put into the contract up front and quoted so that they're paid for by their parties. Or they can - actually, it can be arranged so that they're in the language of the LC so that all the banking costs are for other parties. Those are negotiable either way.
Linda Abbruzzese: Okay. Great, Jerry.
Here's another question. I think this is pertaining…
Mary Freeman: This is Mary Freeman. Can I just add something to that answer?
Linda Abbruzzese: Sure.
Mary Freeman: We also use letters of credit very often. And in addition to the fees of the letter of credit being assigned to the buyer, we also make a point of mentioning the (change) fees because when you use a letter of credit, the wording has to match your (pro forma invoice) exactly to the letter.
And if there's one (unintelligible) change that has to be made, the bank fee - the bank will charge you as much as, you know, $75 to make a small amendment.
And those fees can quite often add up and the customer will argue about who has to pay those. If you are going to assign the letter of credit charges to the buyer, make sure you also include an amendment.
Jerry Watterworth: Amendments and discrepancies are additional charges that can be imposed. And it is good to take care of that upfront in the language of the LC so it's clear who's going to be responsible any of those charges if they arise.
Linda Abbruzzese: Great. Thank you, Mary and Jerry.
I think this question is also again for Jerry.
(Jill Fargo) would like to know, please explain the time LC. I believe this is time letter of credit.
Jerry Watterworth: There are sight letters of credit and time letters of credit.
And sight letters of credit allow for the payment to be made upon presentation of the documentation by the exporter to the bank. The bank simply examines the documents and then arranges for the payment to be made to the exporter under a sight presentation.
A time letter of credit can allow for payment up to 180 days after presentation of those documents. And that typically is the period where the exporter then either waits for that payment to come in or they can ask that the payment to be “discounted” and they can receive discounted proceeds of that payment. In that case, the bank will wait for payment from the foreign bank at the maturity day. So the exporter is paid out upfront.
So a time letter of credit can effectively be made into a sight letter of credit as well, but a time LC allows the buyer (that) negotiated anywhere up to 180 days to actually make the payment to the exporter.
Al Redlhammer: Can I add something to this too?
Jerry Watterworth: Please.
Al Redlhammer: Yeah, this is Al Redlhammer.
Jerry and I discussed this. This is a very neat part of the letter of credit using a time draft because the seller, the exporter, actually can give terms to his customer without having to have the problem of waiting for his money because the discounting that the bank does is based upon the collateral in the of letter of credit which has been confirmed, and it's perfect collateral. And so, the discount rate is a - probably the best rate available. So it's the best of both possible worlds.
Linda Abbruzzese: Okay, great. Thank you, Al.
(Ricardo Garcia) has a question.
How about escrow as a form of payment?
Jerry Watterworth: And I tried to answer that to him directly, but, well, I'm not sure I got it to him. But I will - we'll mention that.
Escrow account can be used. I typically don't see them with most trade transactions. I have seen them used with larger projects where there are deliveries made over a period of time. And then the final escrowed amount is released after the project is complete or approved by the buyer.
I personally think the important thing there is to have an attorney involved to develop the language for the escrow agreement, and the trick is in the language.
And an exporter doesn't want to be caught in a situation where the buyer has the final say over the release of those escrowed funds. You know, if something happens, the buyer decides they don't want to actually release it, then there could be a potential problem. And therefore, it would be advisable to have an attorney involved at the outset.
Linda Abbruzzese: Okay, thank you very much.
(Allison Knot) has a question. She wants to know, is Ex-Im a specific bank or is it available to all banks?
Jerry Watterworth: Ex-Im Bank is a guarantee insurance and funding entity set up by the US Government. The services are typically available through commercial banks. So, you can work with a commercial bank who in turn will then work with Ex-Im Bank to get the appropriate service or support established for the exporter.
Linda Abbruzzese: Okay, Jerry, thank you.
(Aimee Soraidis) has a question. She's says, “Jerry, do you have any advice for offering financing for customers of international distributors, such as (unintelligible) import, but customers cannot afford the product and need to finance it?”
Jerry Watterworth: Well, that's a difficult one. The traditional tools can also be used whether it's the distributor or whether it's the end users. There are programs to help finance distributors.
For instance, Ex-Im Bank has a program for distributor financing. But other than that, we have to get a little creative and learn more about the actual situation from the person who submitted that question.
Linda Abbruzzese: Okay, great. Thank you.
And just to remind everyone, right in front of you is the slide about the contact information of all our speakers. So, if you have a specific question that you would like to ask that hasn't been answered today or you think of later on, please note down this information and get in contact with one of these speakers.
The other question I have is from (Gary Donwith). “I'd like to know, does the US embassies abroad assist an exporter with the collection on a seriously delinquent customer? For example, how does an exporter approach this embassy abroad?”
Stephanie Heckle: Linda, this is Stephanie Heckle with the US Commercial Service.
The answer is yes, we can help. We can basically help by facilitating the communication between you and the importer or the buyer to see if we can open that back up and see what can happen. We don't have any real legal standing. So, in order to do something like proceed with any sort of litigation, you would have to contact an attorney in-country.
The best way to get in touch with the embassy is going to be through your local Export Assistant Center which you can find on the Buyusa.gov Web site that Kathryn Dye and I had on our slide, or to contact either of us and we can help you to find that local Export Assistance Center to work with you.
Linda Abbruzzese: Thank you, Stephanie.
There's a question from (Tanya Dippo). (She's like) she has a question.
“I work in higher education, and I was wondering how any of this would be applicable in my line of work since we are not shipping a tangible product but actually a service to students overseas.”
Kathryn Dye: This is Kathryn. I'll actually be happy to (comment) there.
The US Commercial Service does help in the export of both manufactured products and services as well. The way that we look at an export is anything that's bringing foreign money into the US.
So, for a university, of course your foreign students that attend programs with you are what we would consider the export of service and the export of your educational services.
We do provide assistance to different institutions in terms of recruiting overseas students by - they've done some different educational fairs, college fairs that focused on students who are looking to come to the US.
Linda Abbruzzese: Okay, great. Thanks, Stephanie - Kathryn -- excuse me -- thank you.
(Aimee Soraidis) has another question and this is directed to Al.
“Do you have any recommendations on the best and simplest way to complete commercial invoices and certificate of origin? And also, any specific type of software you would recommend?
Al Redlhammer: Well, the certificate of origin is a standardized form, and you can get that probably simply by Googling it. But it's a standard form and it can be downloaded and printed yourself. Your forwarder generally will do that.
As far as software, yes, there's software all over the place. Most freight forwarders operate with computers now. The days of the typewriter are gone.
And to answer the question simply, yes and yes. The form is available. It's available in so many sources. It's not even (unintelligible). And there is software that will help you do all of the other documentation. However, I would talk to somebody in the industry before I went out and spend the money because you might be duplicating things.
Benjamin Jones: This is Ben Jones. If I can just kind of also chime in there?
Al Redlhammer: Oh, yeah, Ben.
Benjamin Jones: The information that we're sharing relative to the e-commerce enablers you can very easily - to the person that provided the question, currently the commercial invoice is integrated in the shipping process. So you can very easily process the shipment and have the screens come up, populate those particular screens and as well as print out that commercial invoice that would be provided to customers at the time of entry. So those elements are all available, i.e., as Al mentioned as well, you can go out and purchase those through a third party, and/or you can, (well), (use) the Internet to facilitate those types of needs.
Linda Abbruzzese: Thank you, Ben.
We are running out of time here. I'll answer - I'll ask one more question. This is for Mary.
Just (Aimee) again has a question. She says, “What advice can you give for best managing your distributors from abroad? We have limited funding. I cannot visit them all.
Mary Freeman: Okay. Well, I guess it depends on what the issue is that needs to be managed. But I would say monthly email - require monthly email reports from them and if they're - no matter if they're doing well or doing poorly, ask them to write you a monthly report.
Linda Abbruzzese: Okay, great. Thank you.
Everyone, I'm afraid that is all the time that we have.
Remember, for those of you with questions we didn't answer, you can expect a reply via email from our offices in Florida, and you can expect a reply from one of the speakers. And their contact information is on the slide, so you can get a response from them.
And for questions that occurred to you after this Webinar, please do make a note of them and contact us. You can contact them at any time.
Also, please check our Web site, www.export.gov/cs for more information on international trade and other market research and assistance available. Also, there's another Web site that is also very useful. It's www.floridaexporter.com.
I'd like to thank everyone for joining us. And thanks to the speakers for their time today.
And please check your email boxes for information on upcoming Webinars.
Coordinator: A coordinator will (unintelligible) will (assist you) momentarily.
Woman: Hi. Is Mary (there)?
Man: All right, just a moment please.