packing and packaging

Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of packages. Packaging can be described as a coordinated system of preparing goods for transport, warehousing, logistics, sale, and end use.

Types of PackageLoose or Unpacked : a common option for large items such as heavy vehicles .Making sure they're stowed securely is more important than adding a layer of protective packaging.

Boxes or Crates: one of the most prevalent options.They are often stacked on pallets and shrink - wrapped for stability . Less durability is required if goods are also containerised

Drums: usually made of metal or plastic-commonly used for transporting liquids and powders or goods that need to be kept dry.

Wrapping: often used with goods stacked on pallets, wrapping both adds to stability and protects goods.

Pallets: allow smaller packing units such as boxes and cartons to be group together. They  allow easy mechanical transporting, which eases the process of loading, unloading and warehousing.

Containers and break-bulk: for logistical efficiency, containers are used to transport most export consignments . Containers are standardised metal boxes, often measuring 6 meters long and 2.4 meter deep/ wide. The goods inside might still need packaging, but the containers offers added protection, and increased security from theft.
The term 'break-bulk' refers to goods carried as general cargo, rather than in containers. This increases the risk of damage during transit, so make sure adequate dunnage is used. Dunnage is protective material placed around the goods to prevent damage from movement, moisture or other causes.

export documents

EXPORT DOCUMENTS

This part shows the documents that are commonly used in exporting, but specific requirements can change by destination and product. It is divided in the following sections: common export-related documents, certificates of origin, other certificates for shipments of specific goods, Export licenses and Temporary shipment documents.      

COMMON EXPORT DOCUMENTS            

•  Bill of Lading

A contract between the owner of the goods and the carrier (as with domestic shipments). For vessels, there are two types: a straight bill of lading, which is non-negotiable, and a negotiable or shipper's order bill of lading. The latter can be bought, sold, or traded while the goods are in transit. The customer usually needs an original as proof of ownership to take possession of the goods.

•  Airway Bill

An Airway Bill is a document that works as an ocean bill of lading but applies only to airfreight. An air waybill is always a straight air waybill and therefore non-negotiable.

• Commercial Invoice

A bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods when assessing customs duties. Governments that use the commercial invoice to control imports will often specify its form, content, number of copies, language to be used, and other characteristics.

• Export Packing List

Considerably more detailed and informative than a standard domestic packing list, it lists seller, buyer, shipper, invoice number, date of shipment, mode of transport, carrier, quantity, description, the type of package (such as a box, crate, drum, or carton) the quantity of packages, total net and gross weight (in kilograms), package marks, and dimensions. Both commercial stationers and freight forwarders carry packing list forms. A packing list may serve as conforming document. It is not a substitute for a commercial invoice.

• Electronic Export Information Form (Shippers Export Declaration)

The EEI is the most common of all export documents. Required for shipments above $2,500* and for shipments of any value requiring an export license. SED has to be electronically filed via AES Direct (free service from Census and Customs) online system.

*Note: EEI is required for shipments to Puerto Rico, the U.S. Virgin Islands and the former Pacific Trust Territories even though they are not considered exports. Shipments to Canada do not require an SED except in cases where an export license is required. (Shipments to third countries passing through Canada do need an SED.)

• Certificate of Origin

The Certificate of Origin (CO) is required by some countries for all or only certain products. In many cases, a statement of origin printed on company letterhead will be enough. The exporter should verify whether a CO is required with the buyer and/or an experienced shipper/freight forwarder or the Trade Information center.

Note: Some countries (i.e. Middle East) require that certificate of origin be notarized, certified by local chamber of commerce and legalized by the commercial section of the consulate of the destination country. 

For textile products, an importing country may require a certificate of origin issued by the manufacturer. The number of required copies and language may vary from country to country. Certificate of Origin for claiming benefits under Free Trade Agreements.

• Dangerous Goods Certificate

 Exports submitted for handling by air carriers and air freight forwarders classified as dangerous goods need to be accompanied by the Shipper’s Declaration for Dangerous Goods required by the International Air Transport Association (IATA). The exporter is responsible for accuracy of the form and ensuring that requirements related to packaging, marking, and other required information by IATA have been met.For shipment of dangerous goods it is critical to identify goods by proper name, comply with packaging and labeling requirements (they vary depending upon type of product shipper and country shipped to).

• Inspection Certificate

The certificate may be issued by the manufacturer and must give a description of the product, contents and percentage of each ingredient, chemical data, microbiological standards, storage instructions, shelf life, and date of manufacture. If animal fats are used, the certificate must state the type of fat used and that the product contains no pork, artificial pork flavor, or pork fat. All foodstuffs are subject to analysis by Ministry of Health laboratories to establish their fitness for use. 

• Insurance Certificate

Used to assure the consignee that insurance will cover the loss of or damage to the cargo during transit. These can be obtained from your freight forwarder or publishing house. Note: an airway bill can serve as an insurance certificate for a shipment by air. Some countries may require certification or notification.

• Phytosanitary Certificate

All shipments of fresh fruits and vegetables, seeds, nuts, flour, rice, grains, lumber, plants, and plant materials require a federal phytosanitary certificate. The certificate must verify that the product is free from specified epidemics and/or agricultural diseases. Additional information and forms are available from Animal and Plant Health Inspection Service (APHIS).

• Weight certificate 

Certificate of weight is a document issued by customs, certifying gross weight of the exported goods.

• Export licenses

Export license is a government document that authorizes the export of specific goods in specific quantities to a particular destination. This document may be required for most or all exports to some countries or for other countries only under special circumstances. Examples of export license certificates include those issued by the Department of Commerce’s Bureau of Industry and Security (dual use articles), the State Department’s Directorate of Defense Trade Controls (defense articles), the Nuclear Regulatory Commission (nuclear materials), and the US Drug Enforcement Administration (controlled substances and precursor chemicals).

OTHER EXPORT RELATED DOCUMENTS

Issued by the carrier or the forwarder includes shipping instructions for air or ocean shipment

Import licenses are the responsibility of the importer and vary depending upon destination and product. However, including a copy of an import license with the rest of your documentation may in some cases help avoid problems with customs in the destination country. 

• Consular invoice

Required in some countries, it describes the shipment of goods and shows information such as the consignor, consignee, and value of the shipment. If required, copies are available from the destination country's Embassy or Consulate in the U.S Import License

Terms of payment

Terms of Payment

When an  international trade relation has been established between two parties, appear the risk of non payment, and it is bigger than in a domestic trade relation.
The risk could be non payment by the importer or the unfulfillment by the exporter.
That is why the parties should establish a method of payment and take in account some information about the other party before the cargo shipment, in order to avoid non payment or unfulfillment.

There are some issues that you must know and analize in an international trade relation:

Credit information

The credit information is usually much less in the foreign market than in the domestic.
Some improvements have been made currently, like the creation of centralized credit information portals, where you can look for this information in the each country agency.

Personal contact

The international trade relation lacks of personal contact, the comunication is usually through fax, telex and internet.
The exporter can not evaluate the importer's character and the understanding is more difficult.   

there are four traditional terms of payment:

Cash in Advance

The exporter requests that the customer provide payment in advance, before the shipment of the cargo has been done. Payment is usually made with an electronic SWIFT (Society for Worldwide Interbank Financial Telecommunication) fund transfer from the customer's bank to the exporter's bank to pay him in its own currency.
This method is a "risk-free" alternative for the exporter, he will not ship the goods until the buyer has remitted payment to him; The risk is completely transferred to the importer, who is expecting the shipment of the requested goods, in the specified quantities, in due time and with the documents necessary to clear customs in the importing country.
It is recommended to use with a "new" customer or someone with unknown creditworthiness, and for customers who live in countries in wich fraud is common.  



Open Account

Credit extended that is not supported by a note, mortage, or other formal written evidence of indebtedness.
the exporter just sends an invoice to the importer along with the shipment and trusts the customer to pay within a reasonable amount of time (30 to 90 days).
the exporter assume all the risk, and that's why it should be only to established customers, or customers with whom the exporter expects to have an ongoing relationship, or possibly to new orders with known credit data and whose credit rating is excellent.

Letter of Credit

The letter of credit is an instrument issued by a Bank on behalf of the importer (buyer) promising to pay the exporter (beneficiary) upon presentation of shipping documents in compliance with the terms stipulated therein. The Bank is obligated to pay only if the documents are in order.

• The Exporter and the Importer agree on work under letter of credit terms. The Exporter sends a pro-forma invoice to the Importer.
• The Importer takes the pro-forma invoice to its Bank and requests a letter of credit.
• The Importer's Bank issues a letter of credit and sends it to the Exporter's Bank.
• The Exporter's bank advises the letter of credit and notifies the Exporter that it is OK to ship the merchandise to the Importer.  

INCOTERMS

Incoterms or international commerce terms are a series of international sales terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions. These are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. This reduces or remove altogether uncertainties arising from different interpretation of such terms in different countries.


For further information click in the imagen

GROUPS

Incoterms are grouped into four categories:

The "E" term (EXW)-The only term where the seller/exporter makes the goods available at his or her own premises to the buyer/importer.

The "F" terms (FCA, FAS and FOB)-Terms where the seller/exporter is responsible to deliver the goods to a carrier named by the buyer.

The "C" terms (CFR, CIF, CPT and CIP)-Terms where the seller/exporter/manufacturer is responsible for contracting and paying for carriage of the goods, but not responsible for additional costs or risk of loss or damage to the goods once they have been shipped. C terms evidence "shipment" (as opposed to "arrival") contracts.

The "D" terms (DAF, DES, DEQ, DDU and DDP)-Terms where the seller/exporter/manufacturer is responsible for all costs and risks associated with bringing the goods to the place of destination. D terms evidence "arrival" contracts.