The operation process of export goods of a foreign trade company mainly includes: quotation, ordering, payment method, stocking, packaging, customs clearance, shipping, transportation insurance, bill of lading, and foreign exchange settlement.
Quotation
In international trade, the inquiry and quotation of products are generally used as the beginning of the trade. Among them, the quotation for export products mainly includes: product quality grade, product specification and model, whether the product has special packaging requirements, the quantity of the purchased product, the delivery time requirement, the transportation method of the product, the material of the product, etc. .
Ordering (signing a contract)
After the two parties of the trade reach an intention on the quotation, the buyer’s enterprise formally places an order and negotiates with the seller’s enterprise on some related matters.
In the process of signing the “Purchase Contract”, mainly negotiate the product name, specifications, quantity, price, packaging, origin, shipping period, payment terms, settlement methods, claims, arbitration, etc., and negotiate the agreement reached after the negotiation. Write in the Purchase Contract. This marks start .
Under normal circumstances, the signing of the purchase contract in duplicate will be effective with the official seal of the company stamped by both parties, and each party will keep one copy.
Payment method
1. Payment by letter of credit
Letters of credit are divided into two types: bare letter of credit and documentary letter of credit. Documentary credit refers to the letter of credit with the specified documents, and the letter of credit without any documents is called the bare letter of credit.
Simply put, a letter of credit is a guarantee document that guarantees the exporter’s recovery of the payment for the goods. Please note that the shipment period of the exported goods should be within the validity period of the L/C, and the L/C presentation period must be submitted no later than the validity date of the L/C.
2. TT payment method
3. Direct payment method
It refers to the direct delivery payment between the buyer and the seller.
stocking
The main check contents for stocking are as follows:
1. The quality and specifications of the goods should be verified according to the requirements of the contract.
2. Quantity of goods: ensure that the quantity requirements of the contract or letter of credit are met.
3. Stocking time: according to the provisions of the letter of credit, combined with the arrangement of the shipping schedule, in order to facilitate the connection of ships and goods.
Packaging
1. General export packaging standards: packaging according to the general standards for trade exports.
2. Special export packaging standards: export goods are packaged according to the special requirements of customers.
3. The packaging and shipping marks (transportation signs) of the goods should be carefully checked and verified to make them comply with the provisions of the letter of credit.
Customs clearance procedures
The customs clearance procedures are extremely important. If the customs clearance is not smooth, the transaction cannot be completed.
1. Export commodities subject to statutory inspection shall be issued an export commodity inspection certificate.
At present, my country’s import and export commodity inspection work mainly includes four links:
a.Accepting the application for inspection: the application for inspection refers to the application of the foreign trade relations person to the commodity inspection agency for inspection.
b.Sampling: After the commodity inspection agency accepts the application for inspection, it will promptly send personnel to the storage site for on-site inspection and appraisal.
c.Inspection: After the commodity inspection agency accepts the inspection application, it will carefully study the inspection items declared and determine the inspection content. And carefully review the contract (letter of credit) regulations on quality, specifications, packaging, clarify the basis for inspection, and determine the inspection standards and methods.
Inspection methods include sampling inspection, instrumental analysis inspection; physical inspection; sensory inspection; microbiological inspection, etc.
d Issuing a certificate: In terms of export, all export commodities listed in the [Type Table] will issue a release note after passing the inspection by the commodity inspection agency (or stamp a release seal on the “Export Goods Declaration Form” to replace the release sheet) .
- Professionals who hold customs declaration certificates must go to the customs with texts such as packing list, invoice, customs declaration power of attorney, export foreign exchange settlement verification form, copy of export goods contract, export commodity inspection certificate and other texts to go through customs clearance procedures.
a. The packing list is the packing details of the export products provided by the exporter.
b. Invoice is proof of export product provided by exporter.
c.The power of attorney for customs declaration is a certificate that a unit or individual without customs declaration ability entrusts a customs broker to declare the customs.
d.The export verification form is applied by the exporting unit to the foreign exchange bureau, which refers to a document for the exporting unit to obtain the export tax rebate.
e.Commodity inspection certificate is obtained after passing the inspection of the entry-exit inspection and quarantine department or its designated inspection agency. It is a general term for various import and export commodity inspection certificates, appraisal certificates and other certificates. It is a valid document with legal basis for all parties involved in foreign trade to perform their contractual obligations, handle claims disputes, negotiate and arbitrate, and present evidence in lawsuits.
Shipment
In the process of loading the goods, you can decide the method of loading according to the quantity of the goods, and take out insurance according to the insurance types specified in the Purchase Contract. Choose from:
1. Complete container
Types of containers (also known as containers):
(1) According to the specifications and sizes: At present, the dry container (DRYCONTAINER) commonly used internationally are:
The outer dimension is 20 feet X8 feet X8 feet 6 inches, referred to as 20 feet container;
40 feet X8 feet X8 feet 6 inches, referred to as 40 feet container, and more used in recent years 40 feet X8 feet X9 feet 6 inches, referred to as 40 feet high container.
(2) According to the box-making materials: there are aluminum alloy containers, steel plate containers, fiberboard containers, and glass fiber reinforced plastic containers.
(3) According to the purpose: there are dry containers; refrigerated containers (REEFER CONTAINER); clothes hanging containers (DRESS HANGER CONTAINER); open top containers (OPENTOP CONTAINER); frame containers (FLAT RACK CONTAINER); tank containers (TANK CONTAINER) .
2. Assembled containers
For assembled containers, the freight is generally calculated according to the volume and weight of the exported goods.
transportation insurance
Usually, the two parties have agreed in advance on the relevant matters of transportation insurance in the signing of the “Purchase Contract”. Common insurances include ocean cargo transportation insurance, land and air mail transportation insurance, etc. Among them, the insurance covered by the marine transportation cargo insurance clauses is divided into two categories: basic insurance and additional insurance:
(1) There are three types of basic insurance: Free from Paricular Average-F.P.A, WPA (With Average or With Particular Average-W.A or W.P.A) and All Risk-A.R.
The scope of responsibility of Ping An Insurance includes: total loss of cargo caused by natural disasters at sea; overall loss of cargo during loading, unloading and transshipment; sacrifice, sharing and salvage costs caused by general average; Total and partial loss of cargo caused by collision, flood, explosion. Water damage insurance is one of the basic risks of marine transportation insurance.
According to the insurance terms of the People’s Insurance Company of China, in addition to the risks listed in Ping An Insurance, its scope of responsibility also bears the risks of natural disasters such as severe weather, lightning, tsunami, and floods. The coverage of all risks is equivalent to the sum of WPA and general additional insurance.
(2) Additional risks. There are two types of additional insurance: general additional insurance and special additional insurance. General additional insurances include theft and pick-up insurance, fresh water and rain insurance, short-run insurance, leakage insurance, breakage insurance, hook damage insurance, mixed contamination insurance, package rupture insurance, mildew insurance, moisture and heat insurance, and smell. risk, etc. Special additional risks include war risks and strike risks.
Bill of Lading
The bill of lading is a document used by the importer to pick up the goods and settle foreign exchange after the exporter has completed the export customs clearance procedures and the customs has released it. The signed bill of lading is issued according to the number of copies required by the letter of credit, generally three copies.
The exporter keeps two copies for tax refund and other business, and one copy is sent to the importer for handling procedures such as delivery. When shipping goods by sea, the importer must hold the original bill of lading, packing list, and invoice to pick up the goods. (The exporter must send the original bill of lading, packing list and invoice to the importer.)
For air cargo, you can directly use the fax of the bill of lading, packing list, and invoice to pick up the goods.
Settlement of foreign exchange
After the export goods are loaded, the import and export company should correctly prepare documents (packaging list, invoice, bill of lading, certificate of export origin, export settlement) and other documents in accordance with the provisions of the letter of credit. Within the validity period of the presentation as stipulated in the L/C, submit it to the bank for negotiation and settlement of foreign exchange.
In addition to the settlement of foreign exchange by letter of credit, other payment remittance methods generally include telegraphic transfer (TELEGRAPHIC TRANSFER (T/T)), bill transfer (DEMAND DRAFT (D/D)), mail transfer (MAIL TRANSFER (M/T)) and other methods , Due to the rapid development of electronic technology, wire transfer is mainly used for remittance.
YIWU AILYNG CO., LIMITED has rich experience in exporting, cooperating with us will give you peace of mind and look forward to your contact！
Post time: Feb-25-2022