Congratulations, you have just received your first international purchase order! Or maybe you can remember the excitement of your first sale internationally. That initial excitement fades when you soon realize that selling your product overseas raises a lot of questions. There is a famous saying that people do not plan to fail, but they fail to plan. This is very true in international business.
When considering whether to export your product, the first thing to focus on is your mode of transportation. There are several options: train/rail, ocean, trucking, air freight, express, or human courier physically carrying the goods. A shipment may often require multiple modes. Determining factors include the size of your shipment and the time required for your goods to reach your customers. Your decision on how to deliver your product to the customer may change from time-to-time based on size, cost, and speed.
If your customer is relatively close and you have several days to ship the product, trucking may be the best option. However, if your customer needs the product sooner, shipping by air is often the only choice. An unexpected consideration: Some regions of the world like Europe have credits or certifications based on your total carbon emissions -- not just in the manufacture of your product, but also including the transportation to destination. This can be an important factor when looking at how you move your product to market.
Next, you should decide whether you need the assistance of a broker or freight forwarder. Many countries have an export declaration that is required for controlled goods and high value shipments. In the United States and Canada, anyone can go to a free government website to file this declaration, but that is not true in many other countries where an export broker may be required. Some customers feel more comfortable having a freight forwarder or broker file the export declaration for you because it is that company’s expertise. The paperwork often requires the goods to be classified with a Harmonized Tariff code, which enables customs to better track what is being exported. For example, fresh vegetables and frozen vegetables would be assigned two different codes.
Your freight forwarder or broker should be able to help with these classifications. In countries like Mexico that have export taxes and duties, the declaration helps customs properly assess the fees. Another key reason for using a freight forwarder: They can contract better rates with truck, rail, air, and ocean carriers than you would trying to negotiate a contract directly.