Importing Archives - Page 3 of 3 - Excelsior Worldwide Logistics Corp.

Top 10 Ports in the World (Infographic)

excelsior on March 15, 2017

For centuries, ports have played a critical role in global commerce, making it possible for different countries to acquire its much-needed resources and products that are impossible to transport through other means. For importers and exporters, ports provide them with benefits that come from foreign resources and investments, as well as the advantage of having access to larger and more open markets.

With such importance, there has been a steady support for constructing new ports around the world in the past recent years. According to World Port Source, there are more than 4,500 ports that are currently serving the global market.
That said, there are ports that are “busier” than others. In this post, we will present the top ten ports in the world in terms of container traffic passing through them.

Importer & Exporter Fact: Culture of Honesty, Find an Honest Broker (Infographic)

excelsior on January 4, 2017

The advent of new technology has made it easier for anyone to start their own import and export business nowadays. However, with tight competition, complex environment, and demanding processes, it is very sporadic for an importer-exporter to prepare the customs work on its own.

Customs broker is an individual that provides professional and expert service for customs clearance of goods during importing and exporting. Their help ensures that all your freights arrive at its point of destination without evading any rules and regulations of international trade.

Customs Audit: How Will It Affect Your Importation?

excelsior on December 29, 2016

Customs Audit is one of the most critical parts of the importation process. In May 2001, the Philippine Congress passed the Republic Act 9135 establishing the Port Entry Audit (PEA) System. This was shortly followed by the Customs Administrative Order No. 5-2001, which allows for the system to be fully implemented all over the country. The procedure was strengthen by the new passed law in the Congress and Senate last September 2015, the R.A 10863 also known as a Customs Modernization and Tariff Act.

What is Customs Audit?

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The law designates power on the Bureau of Customs to conduct a Post Clearance Audit of imports for three years from the date of importations (Final payment of duties or customs clearances). Operationally, customs audit means that the importer is obliged to open its import and business records specified in the said law and give full & free access to customs officer authorized by Bureau of Customs for purpose of authenticating the accuracy of the information declared in the corresponding import entries covered by the audit period..

What are the Consequences of Noncompliance?

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Noncompliance with laws and regulations may result in very stiff penalties. Any person who, after being subjected to post clearance audit and examination is found to have incurred deficiencies in duties and taxes paid for imported goods, shall be penalized according to two degrees of culpability.

First when negligence committed and found guilty for deficiency results from an offenders failure to exercise reasonable care and competence in ensuring that a statement/declaration made is correct, shall be penalized with a fine equivalent to 125% of the revenue loss.

Worst, When the customs officers found out that there is fraud involved (committed knowingly, voluntarily and intentionally) the auditee if found guilty is subject to a separate investigation and may further be liable to criminal prosecution aside from the penalty of not more than six times the revenue loss.

How to Avoid Noncompliance

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Certainly, post clearance audit greatly impacts the way importers will be doing business with customs. Corporate officials are also expected to be aware that violations of the post clearance audit law make them liable to civil- or worst, criminal prosecution. To avoid this, here are the three things that a responsible corporate official should consider to ensure compliance with the new law:

1. Determine as to what office or who within the organization should be responsible for the storage and retrieval of relevant documents and information needed for customs audit.

2. Provide to the Customs Officer the correct information when the same is required or asked during post clearance audit at any time for that matter.

3. The storage and retrieval pertain to a system of keeping these records, whether manually or electronically.
It is very important to systematically keep the records.. A disorganized record-keeping system is highly associated with negligence, which is one factor that can affect the importer’s level of customs compliance.

What to Do If You Are Audited

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Should your company receive notice of an audit, contact a person (Licensed Customs Broker) who is familiar with customs compliance to help you prepare for the audit.

To prepare for a post-entry audit, consider the following:

Prepare your in-house procedures and controls in such areas as record-keeping, classification, and valuation by making sure they are in writing and that your company’s transactions are well documented
Be sure that your documentation shows all corrective actions that have been implemented
Review the audit questionnaire and prepare your response in advance

Some of the import and business documents that are reviewed by Customs in an audit include:

Customs entry records (both manual records and electronic records)
General ledger accounts
Foreign vendor payments
Inventory and disbursement records
Correspondence with foreign suppliers

Understanding how the audit procedure works and how the results can affect a business are very important as violating the law may have a severe business and personal ramifications. With a sensible approach, companies can avoid potentially disastrous results.

Avoid any discrepancies in customs audit by partnering with an honest and capable customs broker today.
Excelsior Worldwide Freight Logistics Corp. provides services that can improve your import process, help you with your recordkeeping and prepare you for the customs audits as well. Call us at (+632) 525-9775 or email us at wecare@excelsior.ph.

Incoterms 2010: What’s the Responsibility of Supplier and Buyer? (Infographic)

excelsior on December 9, 2016

Whether you are new in the importing and exporting industry or not, you might have already encountered the term Incoterms in your business. For starters, International Commercial Terms or Incoterms , which the latest edition was released in 2010, is a set of standardized trade terms created and published by International Chamber of Commerce in 1936 to serve as the basis of agreement between the supplier and the buyer that trades internationally.

The latest edition, the Incoterms 2010, contains 11 rules which are divided into two classes: 1. Rules for any mode or modes of transport; and 2. Rules for Sea and Inland Waterway Transport. Both differs in the mode of delivery, but understanding the difference between each rule is critical to know where and when the responsibility of the buyer and the supplier ends.

Detailed below are the duties of buyer and supplier in accordance with the 11 rules in Incoterms 2010.

Importer Facts: Choosing Your Agreement Between Your Supplier – Incoterms 2010

excelsior on November 28, 2016

If you are planning to start an import and export business on an international basis, or you are expecting to receive or ship goods from an overseas market and you already have a list of potential suppliers at hand, the next step that you will take now is to choose the appropriate delivery agreement between you and your supplier.

By that point, you should have already familiarized yourself with the International Commerce Terms or Incoterms, which is a set of standardized trade terms published the International Chamber of Commerce or ICC. As the basis of delivery agreement between you and your overseas supplier, Incoterms usually includes the information on how goods will be delivered, who will cover the payments, who is responsible for insurance, and who handles specific shipping procedures.

The latest edition of Incoterms was released in 2010 and includes eleven rules which are divided into two classes – 1. Rules for Any Mode or Modes of Transport, which may be used without regard to any kind of transportation used; and 2. Rules for Sea and Inland Waterway Transport, which emphasizes that the point of delivery and the destination of the equipment are both ports.

To decide which of these rules is best for your import and export business, we will discuss all the Incoterms 2010 rules and weigh down the advantage of each in terms of passing on responsibilities and cost.

RULES FOR ANY MODE OR MODES OF TRANSPORT

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EXW – Ex Works

According to ICC, Ex works means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place. This rule places the minimal responsibility to the seller or supplier since they only have to make the goods available, properly packaged at the specified place which is usually at the supplier’s factory or warehouse.

This is not typically used in the cross-border transaction since it presents many transportation difficulties. The buyer also bears all the cost and risks involved in collecting the goods from the seller’s premises to the designated destination.

FCA – Free Carrier

ICC defines Free Carrier as the agreement when the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place.” When the goods have already been cleared, it can then be delivered by the seller to the carrier at the designated location stated in the contract.

When the goods arrive at the point of location, the buyer will then assume the responsibility. If the location to deliver goods is not mentioned in the contract, the seller may choose within the place or range stated where the carrier take the goods into his charge. This term is usually used in container transport movements such as RO/ RO (roll on – roll off) used by trailers and ferries.

CPT – Carriage Paid To

Carriage Paid To means that the seller fulfills his obligation if they deliver the goods to the carrier or another person nominated by the seller at an agreed place. This is only applicable when the seller contract for and pay the cost of carriage necessary to bring the goods to the named place of destination. Like FCA, the seller may select the point at the named place of destination which best suits its purpose.

The risk of loss and damage to the goods, as well as any additional cost incurred after the goods have been delivered into the custody of the carrier is then transferred to the buyer. If ever that there are several successive carriers, the transport risk passes from the seller to the buyer when the goods are delivered to the first carrier in the chain.

In this term, the seller has no obligation to hire insurance transport to cover the goods from the point place of delivery to the point of destination. The seller is also tasked to complete all the formalities and carry all the costs of customs clearance for export, but not the import clearance needed in the place of destination.

CIP – Carriage and Insurance Paid To

In its most basic format, Carriage and Insurance Paid To means that the goods will be delivered by the seller to carrier or person nominated by the buyer at the place mutually agreed by the seller and the buyer, and that the seller arranges and pays for all costs for the transportation, including insurance (which is usually kept at minimum) of the goods up to the agreed port of destination.

Like CPT, the obligations of the seller end when he successfully delivered the goods to the carrier, but typically do not end until the carrier reaches the agreed destination. Unlike other Incoterms, the stipulated point of delivering under this terms does not necessarily mean that it is the final delivery point.

DAT – Delivered at Terminal

Incoterms “Delivered at Terminal” means that the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. “Terminal” may include place any place, whether covered or not, such as factory, warehouse, container yard or road, rail or cargo terminal.

Under this Incoterms, the seller must complete all the formalities and shoulder all the costs of customs clearance for export. The seller also bears all the risk involved in bringing the goods to and unloading them all at the terminal at the named port or place of the destination.

DAP – Delivered at Place

Incoterms “Delivered at Place” means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. Under this Incoterms, the seller agrees to pay all costs and assumes all risks related to bringing the goods up to the place of destination.

DDP – Delivery Duty Paid

Incoterms “Delivery Duty Paid” means that the seller fulfills their obligation when they successfully delivered the goods at the named place in the country of importation. Under this terms, the seller has to shoulder all the costs and risks related to delivering the goods to the place of destination. Unlike the other Incoterms, the seller has also the obligation to clear the goods not only for export but also for import, which means that they have to pay any duty for both export and import and to carry out all customs formalities. While Ex Works is Incoterms that represents the minimum obligation by the seller, Delivery Duty Paid represents the maximum obligation.

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

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FAS – Free Alongside Ship

Free Alongside Ship basically means that the seller fulfills their obligation when the goods have been placed alongside the vessel on the quay or on a barge at the named port of shipment. This means that the seller has to carry all the risks of loss and damage to the goods until the goods are alongside the ship. Under this terms, the buyer is required to clear the goods for export, and should only be used when the buyer does not have the capacity to carry out directly or indirectly the export formalities.

FOB – Free on Board

Incoterms Free on Board states that the seller fulfills their obligation when the goods have been delivered on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. This Incoterms indicates that the seller has to shoulder all the costs and risks of loss and damage to the goods until the goods have finally arrived on board the vessel, and the buyer will bear all costs from that moment onwards.

CFR – Cost and Freight

Cost and Freight Incoterms mean that seller delivers the goods on board the vessel or procures the goods already so delivered. The seller covers all the risks of loss and damage to the goods until the goods are on board the vessel. However, the seller has to shoulder the costs of bringing the goods from the point of origin to the place of destination. They are also tasked to clear the goods for export, but never on insurance.

CIF – Cost, Insurance, and Freight

Cost, Insurance, and Freight Incoterms is almost identical to CFR – with an exception for the insurance portion. Under this Incoterms, the seller fulfills their obligation to deliver when the goods are already placed on board the vessel or procure the goods already so delivered. Like CFR, the risks of loss and damage passes when the goods are on board the vessel. Aside from freight and clearance cost, the seller has to procure and pay for a marine insurance against the buyer’s risks of loss of or damage to the goods while in transit.

Choosing the appropriate Incoterms is one of the most important step in the shipping process as it ensures that both parties – the seller and the buyer – understands their responsibilities. It also streamlines the whole shipping process so that goods will arrive at the point of destination with less time and hassle, which is a win-win situation both for the seller and buyer.

If you have any questions about Incoterms, feel free to call Excelsior Worldwide Freight Logistics Corp. Call us at (+632) 525-9775 or email us at wecare@excelsior.ph

Types of Bill of Lading That Affects Your Import & Export Business (Infographic)

excelsior on November 21, 2016

Bill of Lading (BOL, Waybill) is a legal document between the shipping carrier and the business which acts as 1) a proof of contract of carriage, 2) receipt of goods, and 3) document of title of goods. It is considered as one of the most important documents in the whole shipping and freight process. Unknown to many, bill lading has many types, and each of these has its own purpose and set of specific instructions for the shipping carrier.

Check out this visual guide as we present some of the most common types of bill of lading used in the importing and exporting business.

Importer Facts: What to Pay and Not Pay? (Infographic)

excelsior on October 11, 2016

Importation is quite tricky, especially if you’re not aware of the costs that come with it. It is important to understand the basic charges you have and you don’t have to pay in order to come up with a solid figure you have to prepare when your goods have finally arrived in the port; cleared and delivered to your warehouse.

Aside from the product you have purchased abroad, here are some of the costs that you should assume from the importing process.

Importer Checklist: Save Time and Money (Infographic)

excelsior on September 9, 2016

Being competitive in today’s market requires your overall business operations to be fast and smart in every step of the way, all while maintaining a sound profit and cash flow. Many of the trade leaders nowadays see importing as a strategic move to overcome the strains in this overly competitive market. Importing, especially if it’s the backbone of your business, can give you an upper-hand in the market if executed carefully. Whether it’s your first time to import products from other countries or not, it is always important to know the basics and other fundamental factors that can affect the whole importation process. To help you carry it out, we’ve put together seven things that can actually save you time and money when bringing in those raw materials and products into the local area of your operations.