An export process is only completed successfully after an exporter has successfully delivered goods per the contract and received the agreed payment for the consignments. This process involves a prescribed procedure to be followed. One needs to be conversant with export regulations, terms, conditions, and the different cultures and the needs of the final customer (Hausmann, Hwang, and Rodrik, 2017). My exporting company needs to export Western Australian wildflower honey to Saudi Arabia. In this paper, I will explain the step by step export procedure that I will employ to ensure that the product reaches Saudi Arabia on time while still fresh.
Step 1: Export Order
The first step is to obtain an export order from Saudi Arabia. An export order shows that there is an agreement if document form between the exporter and the importer before the exporter begins any procuring or manufacturing of goods for export (Rodrik, 2016; Vernon, 2017). I will obtain an export order in the form of a purchasing order, proforma, or letter of credit.
Step 2: Examination and Confirmation of Order
After obtaining an export order, I will examine it with a focus on the terms and conditions of the stated contract. This is the most critical step because all actions and reactions that follow will be based on the terms and conditions of the order (Conconi, Sapir, and Zanardi, 2016). I will focus on product description, payment terms, shipment terms, requirements about insurance and inspection, documents for payment release, and last date of document negotiations with the bank. If I get satisfied with these, I will confirm the export order with Saudi Arabia.
Step 3: Procuring Goods
The Saudi Arabia Reserve Bank under the interest subsidy scheme extends pre-shipment credit to exporters to fund capital needs for raw material purchasing, processing, and converting them to end products for export purposes (Aguiar, Narayanan and McDougall, 2016). I will, therefore, approach the bank from the procedures and regulations of the pre-shipment credit. When I receive the credit, I will start procuring and packaging the shipment for export.
Step 4: Clearance from Central Excise
After procuring the honey, I will start the process of acquiring clearance from the central excise duty. This duty from Saudi Arabia and the Sales Act provide a refund for excise duty paid. There are two schemes which provide 100% rebate on duty for exportation upon submitting proof of shipment (Di Giovanni, Levchenko, and Mejean, 2018; Vernon, 2015). I will apply the AR4A to the Central Excise Range Superintendent to enable me to get excise clearance.
Step 5: Pre-Shipment Inspection
Western Australian wildflower honey is a directly consumed product and therefore requires quality certification according to the regulations of the Saudi Arabian Government. The Saudi Arabia authorities require submission of a certificate of inspection issued by a designated and competent authority before allowing shipment of the honey to happen (Masso and Vahter, 2015). I will ensure that inspection of the honey for exportation is conducted under Consignment-wise Inspection, in-process Quality Control, and Self-Certification. I will ensure that the first certificate remains with the customs verification, the second one is sent to Saudi Arabia, and I stay with another one for reference.
Step 6: Hiring Clearing and Forwarding Agents
Upon completing the process of acquiring the Certificate of Inspection from the customs agency, I will go on to appoint clearing and forwarding agents to perform a variety of functions on my behalf. These functions will include packaging, labeling, arrangement for transportation, customs clearance, transport procurement and other documents (Anderson and Gatignon, 2014). In terms of packaging, I will be sure to inform the agents that the Western Australian wildflower honey needs to arrive in Saudi Arabia in the freshest condition ever. Therefore, packaging should be one that ensures adequate preservation of the honey and transportation should be the fastest means possible. To help the agents in discharging my services, I will provide them with the following documents:
Step 7: Goods to Port of Shipment
After completing the excise clearance and pre-shipment processes, I will ensure that the honey is finally packaged, packed, labeled, and marked for safe and quick transportation. I will ensure that I instruct the export department about the preservation of the honey during transit. This plan for shipping will be done through the clearing and forwarding agents, or I may hire a freight broker. Because the honey is intended to arrive in Saudi Arabia in its freshest form, Air transport will be an ideal mode of transportation because it is fast and easy (Ang, Benischke, and Doh, 2015). I will acquire the following documents from the flight company exporting the honey:
Once carriers have been allotted, products will be loaded, and the flight company will issue the airway receipt. This receipt and other documents are sent to the agents at the port, and the export department issues an insurance policy for coverage of risks.
Step 8: Port Formalities and Customs Clearance
After receiving the documents from the export department, clearing and forwarding agents takes the cargo delivery from the airport station and stores it in the warehouse (Allweyer, 2016). They also receive permission and customs clearance from the airport authorities to bring the products in to the shipment space (Lu, 2016). The customs department permits export at the office of verification of goods and customs, and they receive the air shipping bill.
The clearing and forwarding agent will submit the following documents to obtain clearance and permission:
After this, the agents provide the Trust Document to the superintendent of the shed at the airport and obtain a carting order to bring the good for physical examination (Lu, 2016). The following documents will be presented for physical examination:
After making the physical examination, the shipment appraiser will make the ‘Let Export’ recommendation of the copy of the shipping bill and the clearing and forwarding agents present it to the preventive officer who endorses the shipping order before loading the cargo onboard (Love and Roper, 2015). After loading the goods, the agents are issued with a mate’s receipt, and then the agents pay the port charges and submit the mate’s receipt to the airport company to be issued with a bill of lading.
Step 9: Dispatching Documents by Forwarding Agent to the Exporter
After receiving the Bill of Lading, the agents dispatch all the documents to me the exporter including:
Step 10: Certificate of Origin
Upon the receipt of these documents, I will apply to the Chamber of Commerce to obtain a Certificate of Origin (Miller, Miller, and Seider, 2016). Since the honey is being exported to Saudi Arabia which offers GSP concessions, I will procure a GSP Certificate of Origin from the export inspection agency.
Step 11: Dispatch of Shipment Advice to the Importer
I will then send the Shipment Advice to the importer in Saudi Arabia showing the date of shipment, the vessel of transfer, and expected time of arrival in Saudi Arabia. I will also send the following documents to the importer to ease the delivery process:
Step 12: Submission of Documents to Bank
Lastly, I will submit the following documents to my bank for the realization of the amount owed by the importer:
Step 13: Claiming Export Incentives
Upon completing the three levels of export that is pre-shipment, shipment and post-shipment, I will claim the payment appropriate to me.
In terms of the comparative advantage theory, does it mean that the countries with fewer resources get exploited by companies which have efficient production?
Does the focus on customer satisfaction sometimes jeopardize the process of businesses earning profits in terms of production?
Efficient modes of transport are expensive.
How can businesses use the most efficient and fastest mode of transport without incurring losses from costs?
How can businesses entering new markets effectively compete with already established competitors?
Is it useful for businesses to hire consultants to explain or train them on Lex Mercatoria?
How challenging is it to invest new businesses in countries with stringent foreign trade policies?
In case the goods are well packaged, and all safety packaging procedures followed, who takes responsibility in case of accidents or disasters?
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