Export gained momentum as international trade became easier due to globalization. Today, advantages such as e-commerce, easy and fast communication provided by the internet paved the way for exports. As global communication, sales, marketing, and logistics processes become easier, and costs decrease, we see that the volume of foreign trade between countries increases; that is, the export figures increase.
Exporting was the monopoly of big companies until the 2000s. Today, even entrepreneurs who go into business with a small capital have the chance to do business in the global market. Millions of small-scale companies and SMEs receive a share of exports. As the number of exporting companies in a country increases, the effects of local economic crises on the total economy decrease.
Export basically takes place with the sale of a good or service to another country. The process of selling goods to another country and the documents to be prepared are more complex than a domestic sale. Thanks to the standard procedures and documents accepted by the member countries, a common language has been created that facilitates trade between countries.
Harmonized Commodity Description and Coding Systems (HS)
Harmonized Goods Description and Coding System, commonly referred to as "Harmonized System" or "HS," is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). It consists of about 5,000 commodity groups; Each is identified by a six-digit code, organized in a legal and logical structure, and supported by well-defined rules to ensure proper classification. More than 200 countries and economies use the system to collect Customs tariffs and international trade statistics. More than 98% of goods in international trade are classified as HS.
INCOTERMS
International trade between companies in different countries brings with it questions such as which means of transport will be used to transport the goods sold, who is responsible for the transportation costs, and the risks that may arise during the transportation process. At this point, the terminology called Incoterms, which is offered to exporters and importers with 11 different delivery options, has been used since 1936. The Incoterms terms determined by the ICC are regulated to share the costs and risks arising from the transportation and delivery of commercial goods between exporting and importing companies in an accurate and fair manner. Incoterms should be determined in order to use a common language in the export offer form or proforma and should be written in the form of the delivery field in the selected documents such as incoterms, invoices, purchase orders, and declarations.
Any Mode Of Transportation
• EXW – Ex Works (Ex-factory)
• FCA – Free Carrier
• CPT – Carriage Paid to
• CIP – Carriage and Insurance Paid
• DPU – Delivered at Place Unloaded
• DAP – Delivered at Place
• DDP – Delivered Duty Paid
Sea & Inland Waterway
• FAS – Free Alongside Ship
• FOB – Free on Board
• CFR – Cost and Freight
• CIF – Cost, Insurance & Freight
Payment Methods, "Determining the Payment Method"
International trade requires a payment method to be determined by the Exporter and the Importer, due to a purchase and sale between two companies from two different countries. The chosen payment method carries different risks by the buyer or the seller. For example, while the advance payment is risky for the Importer, working "Open account" is risky for the Exporter. In order to avoid any uncertainty, later on, the exporter company must specify the selected payment method in writing, with the phrase "payment methods" on the invoice to be prepared during the export process and the declaration prepared during the customs procedures.
How to Export – Export Guide
Stage 1: The offer and negotiation stage
The offer and negotiation stage takes place between the Exporter and the Importer. The Exporter shares the details and prices of the products to be exported with the Importer with a proposal form or proforma.
On an export proforma or purchase order, the name and full addresses of the buyer and seller companies, the name, number, and prices of the products to be sold, incoterms, and payment methods should be included.
Stage 2: Prepare for the Shipment period
The exporter company may be the manufacturer or supplier of the products to be sold. When the products are ready for shipment, the party responsible for the shipment organizes the shipment according to the selected incoterms.
Stage 3: Inland Shipping, Customs Clearance, and Shipping
For port and aircraft loading, inland transport is organized between the Exporter's facilities and the main shipping point. After the export customs clearance is completed, the delivery vehicle can leave the country.
Stage 4: Documents to be Prepared by the Exporter
The exporting company prepares all the necessary export documents for the customs procedures to be carried out in its own country and then for the customs procedures to be carried out in the Importer's country. Invoice, packing list, certificate of origin, and Bill of lading are essential documents for all export operations. According to the Importer's request, documents such as movement certificates, certificate of analysis, etc., may need to be prepared.
• Invoice (Required)
• Packing list (Required)
• Certificate of Origin (Required)
• Bill Of Lading or CMR (Mandatory)
Stage 5: Sending the Export Documentation Set to the Buyer
For truck shipments and airway shipments, the export document set is sent with the vehicle. In other words, when the transport vehicle arrives at the import customs, the documents to be used in customs procedures are delivered by the transport company to the customs unit or to the customs broker of the Importer. In maritime exports, export documents are sent to the Importer by express courier Exporter. Today, electronic document processes have been used in many countries, so sending printed documents is not mandatory.
Stage 6: Customs and inland shipping procedures in the buyer's country
After the customs procedures are completed in the Importer's country, the export cargo is delivered to the address requested by the Importer, either by the original means of transport or by an inland transport vehicle. The process ends when the product is delivered.
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