Int dist tenta Flashcards
Tariffs of overseas has decreased over time? T/F
TRUE
A quota is?
When there is a restriction of how much volume that can be imported.
Local Content requirements
Certain portion of value added must be produced inside the country.
Trade bloc of North america?
NAFTA
Trade bloc of South america?
MERCOSUR
Trade bloc of South east asia
ASEAN
Local manufacturing, Local sourcing means
Produce products in sweden and sell them in sweden, like heieneken beer for example. Only trademark is foreign.
Local sourcing, Global manufacturing
Every factory gets its raw materials/commodities in the local area where they operate.
Global sourcing, global manufacturing
Buy materials from different trade blocs and sell the end product globally.
Lift and shift means?
That you try a product in one country, if it works here, try to introduce it to a new market.
Tariff rate quota
Possible to import a quantity of goods to a low duty rate. When reaching the quantity a much higher rate will be applied.
Absolute quota
Places a yearly limit on the number of items entering a country under a specific product.
Main goals of customs
Revenue collection, Promote nation’s competitive ness (to avoid dumping), National Security, Protection of national interests.
4 types of control for customs:
Red, Orange, Yellow, Green
Red custom inspection
Means physical inspection, used on high risk companies.
Orange custom inspection
Scanning by xray
Yellow custom inspection
Check of documents
Green custom inspection
Automated control
Free Trade Zone
Import under beneficial circumstances to perform assembly within the certain zone. Ex Panama and Guanzhou are FTZ’s.
Duties are based on 3 factors :
Classification of goods, Value of goods, Country of origin.
Cost of inspection is paid by the….
Shipper often, dependent on Incoterms
Commodity code & Origin will give you the=
Duty rate.
If putting the wrong classification code…
you might need to overpay for the import of the goods in the destination country. Delays etc may occur.
Origin of coffee is
where we roast and blend the coffee.
Packaging will not be a substantial change to the product, therefore…
The origin of the product will not be changed if the coffee is packaged in the consuming country.
Operators with International geographic scope and simple complexity of functions are called?
Freight forwarders
Domestic simple functions freight solutions are called?
Road freight operators
Complex function of logistics operating in the domestic market
Contract logistics/3PL
Ad valorem duty?
Dependent on the value of the good
Specific duty
A concrete sum is charged for a quantitative description of the good
Explain some Non-tariff barriers
Quota, embargo, document complexity, technical standards, health regulations, certain ports and airports are the only paths into the country.
Inward Processing Relief
Used by EU countries to import resources and manufacture in EU then further sell without paying excessive duties
Outward Processing Relief
Returns of products from outside EU to inside, you are allowed to skip duties for service etc.
What is AEO
Authorized Economic Operator: is a certification used by customs agencies for the purpose of traffic security.
What requirements are needed to have a AEO certification
Compliance with customs requirements
Traceability of financial flows
Financial solvency
Security level of information, logistics and personnel
What is included in the purchase order?
specification of products
Quantitiy
Delivery date and location
Dispute and pnalties
Prices
Group E Incoterms
EX works: only packaging is handled by the seller, everything else is handled by the buyer
Group F Incoterms
Main carriage unpaid: EFCD
Free carrier (FCA- name place)
Free Alongside Ship (FAS – Name port)
Free on Board (FOB – Name Port)
Group C Incoterms
Main carriage paid: EFCD
- Carriage Paid To (CPT – Name place)
- Carriage and Insurance Paid To (CIP – Name place)
Group D Incoterms
Arrival:
- Delivered At Place (DAP – name place):
- Delivered At Place Unloaded (DPU – name place):
- Deliver Duty Paid (DDP – Name place):
Terms of payment is important, what is 4 common options for this?
Cash in Advance
Letters of Credit
Progress of payment
Open account
What is the difference between direct and indirect exporting
Indirect may use supporting salesmen, retailers and intermediaries. Direct exporting is similar to direct selling.
Export trading company difference to Export management corporation
INDIRECT
ETC is an intermediary that buys the goods in the exporting country and transfers the goods to the importing country.
EMC located in exporting country, takes care of the exporters sales through a commission.
Distributor
INDIRECT
Typically located in importing country
Taking title to goods and earning profit on the sales
Carry inventory of exporters goods
Often maintenance and support services
Sales Agents
DIRECT
Small firm or individual in importing country
Terms of sales is acc to exporter
After sales, exporter takes care of any maintenance etc
Often expensive and not stock items
Often small in terms of volume sales
Sales subsidiary
Foreign office staffed by exporter
Two legal entities
Costs high
Good when wanting to have control of sales
Joint Venture
DIRECT EXPORTING
Exporter finds one or more partners to share costs
Creation of a new corporation
Minimize exposure when going abroad
Minority local partner
Legally required to find local partner
Licensing
DIRECT EXPORTING
Two companies
Importing company takes royalty
No capital lay outs to perform
Not always protected intellectual prop
3 Selection criteria for the Trade Channel
Market Characteristics
Product characteristic
Exporter Characteristics
Consignment stock
Consignment stock is the vendor supplied stock.
Ownership of the stock is passed only when it is used.
What are the traditional functions of the Logistics Channel
Consolidation and transport optimization
Product mixing-gathering
Customer service
Efficiency inventory holding
Direct Shipment is…
Straight from plant to the customer
1-Echelon network
Plant-Local warehouse-Customer
2-Echelon network
Plant-Central Warehouse-Local Warehouse-Customer
Consolidation hub
Supplier in China may have a consolidation hub in china to repack products and send it to local warehouses
