Is your cargo stuck in port? Five things to consider about import/export regimes
Tuesday, August 27, 2013/
Picture this: You’re the owner of a small Australian firm that is working with a company based abroad (in a country we’ll call “Quasiland”) to manufacture a machine for your client based in Melbourne.
Before the machine is shipped back from Quasiland to Melbourne you decide to send some product to Quasiland to test the new machine. You’re on a tight schedule, but opt to ship the goods rather than airfreight them, just to keep costs down.
Everything is going well until the shipment reaches Quasiland Customs. You receive a crisis call from your agent at Quasiland Port – apparently two-thirds of the cargo is stuck and can’t be cleared. No one seems to be exactly sure why and no one can tell you when the goods might be released. English is your agent’s third language, and you wonder whether you’re missing details on account of the language barrier.
Perhaps something has gone wrong with customs’ internal processes? Was the cargo incorrectly labelled? Are you expected to offer a bribe? With the clock ticking down and no solution in sight, you’re tearing your hair out …
If any of the foregoing sounds familiar, you’re not alone. The scenario outlined above has befallen many Australian exporters, including some of our clients.
As you can imagine, these kinds of situations have the potential to waste enormous amounts of time, and to be costly and stressful for exporters and their customers.
Dealing with foreign import/export systems and customs regimes can be something of a Chinese puzzle and new exporters are particularly likely to come unstuck without sufficient preparation.
So how can you avoid or solve one of these sticky export situations?
Prevention is better than cure
Find out everything you can about the customs regimes of Quasiland, or wherever you happen to be shipping to, before you begin the process. This includes general information about the environment that you’re shipping to or from, requirements around language, paperwork and items which might be prohibited or problematic in certain regions.
Some countries update their import/export rules often, so even frequent exporters should check the relevant guidelines and regulations regularly, to avoid being caught out by sudden changes in laws and processes.
If you’re unsure where to look, ask the relevant bilateral business group or chamber of commerce or get in touch with the peak body for exporters – the Export Council of Australia.
Be realistic about timeframes
Start early. The import/export process can take longer than you’d imagine. Inclement weather, pedantic officials, industrial action and national holidays can all get in the way of your cargo arriving on schedule. Building in false deadlines and time buffer zones is a good option if you have that luxury.
Be pedantic about documentation
Export documentation is one area in which “near enough” is definitely not good enough. Most customs regimes are highly process driven and in some countries, unless every ‘i’ is dotted and every ‘t’ crossed, your goods won’t arrive on time.
Make sure all descriptions and weights listed on your documentation are accurate and match each other, as well as matching the cargo itself. Pay special attention to labelling requirements. Failure to do so can cause enormous problems.
Get local help
There is nothing like having someone who knows the environment and local language on your team to troubleshoot problems and get things moving. Having a local agent who you know, trust and get on well with is a huge plus and something that exporters should invest in if they are able.
Keep in regular contact with your agent and ensure that they are giving you as much information as they can. Pay attention to what your local agent recommends – he or she knows the environment and what to do to stay out of trouble.
Call in the experts
If you are unfortunate enough to find your cargo stuck in port, call in the experts. Making contact with a reputable freight forwarder or export consultant with good networks in-country can be invaluable in a crisis, both in terms of understanding the operating environment and accessing people with influence.
Engaging a third-party on a short-term basis also shifts some of the stress and work associated with solving the problem away from the exporter, allowing the firm to focus on its core business. This can be especially helpful from small and medium enterprises which do not have spare staff on hand to deal with tricky export problems in ports thousands of kilometres away.
Cynthia Dearin is managing director of Dearin & Associates, a boutique international market entry consulting firm.