U.S. Small Business Administration

According to the U.S. Department of Commerce, American companies lose more business in the movement of products overseas than in any other phase of the export process.  Overseas transport involves modes of transportation, packaging requirements and documentation, all of which are quite different than those required for domestic shipping.

The methods of moving goods to foreign markets fall into three categories: sea, air and land transportation.  When choosing a mode of shipping, you should consider product characteristics such as size and value, destination, required speed of delivery and cost.  You should also take into account compatibility with the other elements of your distribution system such as packaging, warehousing, inventory control and handling. 

Water

The largest tonnage of goods shipped to and from the United States travels by water.  You can choose from three types of ocean transport:

• Conference lines, associations of carriers that operate in a specific area (called a "trade") and which have established common rates and shipping conditions;
• Independent lines, which operate and quote rates individually and accept bookings from all shippers depending on space availability; and
• Tramp vessels, which operate on charters wherever they can get cargo and usually carry only bulk cargo.

No matter which carrier you use, your cargo must be insured.  Ocean marine cargo insurance is arranged by either the buyer or seller, according to the terms of sale, and is a one-time policy insuring a specific shipment.

Air

Increasingly, air transport is the mode of choice, especially by manufacturers of valuable high technology products, exporters of perishable foods and equipment manufacturers replacing broken machinery or parts.  The growth in the use of air transport has been spurred by innovations in the air cargo industry, which have resulted in more efficient loading and handling of goods.

Land

For obvious reasons, the uses of land transportation are more limited in the export distribution process.  Companies sending merchandise to foreign markets use land transportation to move goods to the nearest port of departure (except for goods bound for Canada, Mexico and Central America) or as one leg of a sea/land or air/land combination.

Whatever method of transport you use, you must make sure your products are well packaged to protect them from the often hazardous conditions of overseas shipping.  When designing your packaging, you should consider breakage, weight and volume, moisture and other climatic conditions, theft and customer requirements.  For advice on packing, talk to your carrier, marine insurance company or freight forwarder or talk to export packers who are well informed about all special packing and marking requirements of a particular country.

The final consideration in the transport and distribution process is documentation.  Without packing lists, bills of lading, export declarations and export licenses, your shipments will not be permitted to pass through customs, loaded onto a carrier and transported to a foreign destination.

In addition, many foreign countries require certificates of origin, which indicate where the goods were produced.  These facilitate customs clearance and are also used to establish preferential rates for import duties under most favored nation agreements.

* Excerpted or reprinted with permission from Small Business Success, Volume 1, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration.