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InternationalMarketing ExportingandLogistics SpecialIssuesForBusinessChapter15 14thEditionPhilipR CateoraMaryC GillyJohnL Graham McGraw Hill IrwinInternationalMarketing14 e Copyright 2009byTheMcGraw HillCompanies Inc Allrightsreserved WhatShouldYouLearn HowtheU S governmenthelpsexportersThestepsnecessarytomovegoodacrosscountrybordersHowvariousimportrestrictionsareusedpoliticallyMeansofreducingimporttaxestoremaincompetitive 15 2 WhatShouldYouLearn ThemechanicsofexportdocumentsandtheirimportanceThemaininstrumentsofforeigncommercialpaymentsThelogisticsandproblemsofthephysicalmovementofgoodsTheimpactofantiterrorismregulationsontheexport importprocess 15 3 GlobalPerspectiveAnExportSale FromTradeShowtoInstallation SpecificexportmechanicsoccurwhengoodsareshippedfromonecountrytoanotherTheInternethashelpedspeedupprocessMostcountriescontrolthemovementofgoodscrossingtheirborders importsandexportsTheinternationalmarketermustmeetthelegalrequirementsinvolvedinmovinggoodsfromonecountrytoanotherExportregulationsImportregulations 15 4 TheExportingProcess Exhibit15 1 15 5 ExportRestrictions ControlledbytheBureauofIndustryandSecurity BIS oftheDepartmentofCommerceExportAdministrationRegulationsServethenationalsecurity foreignpolicy andnonproliferationinterestsIncludessomeexportcontrolstoprotecttheU S fromtheadverseimpactoftheunrestrictedexportofcommoditiesinshortsupplyNLR nolicenserequired 15 6 DeterminingExportRequirements Exportermustdeterminetheappropriatelicensefortheproduct generalorvalidated ExportControlClassificationNumber ECCN CommerceControlList CCL End userestrictionsDeterminationofultimateendcustomerandultimateendusesoftheproductDetailsofexportingmustbefollowedtotheletter 15 7 IllustrationofCommerceControlListRequirementsforECCN0A984 Exhibit15 2 15 8 CommerceCountryChart ReasonsforControl SelectedCountries Exhibit15 3 15 9 RedFlags Exhibit15 4 15 10 ExamplesofViolationsandPenaltiesofBISExportControls Exhibit15 5 15 11 ELAIN STELA ERIC andSNAP ELAIN ExportLicenseApplicationandInformationNetwork STELA SystemforTrackingExportLicenseApplications ERIC ElectronicRequestforItemClassification SNAP SimplifiedNetworkApplicationProcess 15 12 ImportRestrictions TariffsExchangepermitsQuotasImportlicensesStandardsBoycottsVoluntaryagreementsOtherrestrictions 15 13 TermsofSale CIF cost insurance freight C F costandfreight FAS freealongside FOB freeonboard EX namedportoforigin 15 14 WhoseResponsibleforCostsunderVariousTerms Exhibit15 6 15 15 GettingPaid ForeignCommercialPayments LetterofcreditAffordthegreatestdegreeofprotectionforthesellerCanberevocableorirrevocableNotaguaranteeofpaymenttothesellerBillsofexchangeAlsoknownasdollardraftsThesellerassumesallriskuntiltheactualdollarsarereceivedSightdraftArrivaldraftDatedraft 15 16 ALetter of CreditTransaction Exhibit15 7 15 17 GettingPaid ForeignCommercialPayments CashinadvancePlacesunpopularburdensonthecustomerOpenaccountsNotgenerallymadeinforeigntradeLeavessellersatadisadvantageForfaitingSellermakesaone timearrangementwithafinancialinstitutiontotakeoverresponsibilityforcollectingtheaccountreceivable 15 18 PrincipalExportDocuments Exhibit15 8 15 19 PackingandMarking Exportpackagingmustconsider Protectionagainstroughhandling climate pilferageEffectofgrossweightonimportfeesAllcountriesregulatethemarkingofimportedgoodsandcontainersAllmarkingsmustconformexactlytothedataontheexportdocumentsPreparingshipmentto Country details NecessaryexportdocumentsRegulationsforlabeling marking packing andcustomsprocedures 15 20 Customs PrivilegedFacilities Customs privilegedfacilitiesAreaswheregoodscanbeimportedforstorageand orprocessingwithtariffsandquotalimitspostponeduntiltheproductsleavethedesignatedareasForeigntradezones FTZs DrawbackOffshoreassembly Maquiladoras OriginatedinMexicointheearly1970 sNAFTA 15 21 Logistics LogisticsmanagementTotalsystemsapproachtomanagementofthedistributionprocessPhysicallymovingrawmaterialIn processinventoryFinishedgoodsinventoryfromthepointoforigintothepointofuseorconsumption 15 22 InterdependenceofPhysicalDistributionActivities PhysicaldistributionsystemPhysicalmovementofgoodsLocationofplantsandwarehousing storage TransportationmodeInventoryquantitiesPackingInterdependenceofthecostsofeachactivityAdecisioninvolvingoneactivityaffectsthecostandefficiencyofoneorallothersSumofeachofthedifferentactivitycostsentailsaninfinitenumberof totalcosts 15 23 RealPhysicalDistributionCostsbetweenAirandOceanFreight SingaporetotheUnitedStates Exhibit15 9 15 24 BenefitsofaPhysicalDistributionSystem CostadvantagesOptimalinventorylevelsOptimalproductioncapacityMoredependabledeliveryservicetothemarketCanrendernaturalobstructionscreatedbygeographylesseconomicallycriticalformultinationalmarketer 15 25 ExportShippingandWarehousing CommonshippingmodesOceanshippingAirfreightAirexpressParcelpostContainerizationIntermodalservicesIntermodalmarketingcompanies IMCs RailtransportationCompletelogisticsmanagementservicesUPSFedExMerge in transit 15 26 ForeignFreightForwarder LicensedbytheFederalMaritimeCommissionArrangesfortheshipmentofgoodsastheagentforanexporterArrangesforcompleteshippingdocumentationProvidesinformationandadviceonroutingandscheduling ratesandrelatedcharges consularandlicensingrequirements labelingrequirements andexportrestrictionsOffersshippinginsurance warehousestorage packingandcontainerization andoceancargoorairfreightspace 15 27 InternationalLogisticsandSupplyChainManagement InformationtechnologynowallowscommunicationwithparticipantsinrealtimeviaasingleconnectionpointNetLinxDescartes3PLprovidersorintegratorsUPSLogisticsGroup 15 28 TerrorismandLogistics CargoandContainerSecurityInitiative CSI 24 hourruleCustoms TradePartnershipagainstTerrorism C TPAT Augmentsthe24 hourrulebyextendingsecurityproceduresthroughoutthesupplychainOnlyappliestoU S importersElectronictracking C TPAT Plus RFIDGPSCellularSatelliteUltra wide bandBluetoothBarcodesOpticalcharacterrecognition 15 29 RadiofrequencyIdentification Exhibit15 10 15 30 Summary Themecha

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