The Traffic Managers Tip Sheet

Are you a Traffic Manager in the know?

traffic manager shirtManaging traffic is one of the most important roles in the logistics industry.  When a shipment of car parts is delayed, a pallet of iPhones is misrouted or the authorities come calling about a compliance issue, it’s the traffic manager who usually has to face such matters before anyone else in the organization.  A traffic manager is essential to ensure these types of incidences do not happen. To be successful, traffic managers have to juggle many tasks while also being knowledgeable and up to date on anything and everything that may affect freight movements domestically or anywhere in the world.

 

While every organization has its unique requirements in terms of freight handling, compliance, key performance indicators (KPI’s) etc., here are some details which are relevant to all traffic managers:

 

traffic manager cta

  1. Freight Density – How do you calculate freight dimensions?
  2. Costs – What are all the costs included those that are hidden as well as landed costs?
  3. Equipment – What size and type of container is needed?
  4. Demurrage – How can you avoid demurrage costs?
  5. Compliance – Are you aware of all the compliance regulations?
  6. Options – When should you move freight by air, by truck, rail or ocean?
  7. Cargo – Do you know if your freight is hazmat?
  8. Risks – Earthquake, strike or electrical outage, are you prepared?
  9. Incoterms – What are the terms of sale?
  10. Industry Trends – What are the industry trends and outlook?

 

To help the traffic manager, we’ve created a handy infographic with links to additional information for each tip to serve as a daily reminder that you can download here.

Check it out and let us know what you think.  Did we miss anything?  Send us additional tips and we’ll compile the additional tips for a later blog post.

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Trade with the largest European Economy – Germany

Trade with the largest European Economy – Germany

germany importsAs one of the largest producers of automobiles, Germany offers great opportunities for U.S. automotive equipment suppliers. It is the largest European economy and the third largest export and import economy in the world. Centrally located in Europe, Germany’s 2014 GDP was $3.8 trillion with real growth rate of 1.6%.

Germany is home to such automobile manufacturers as Adam Opel AG, BMW, Daimler AG and Volkswagen. Besides being a large producer of automobiles, Germany also is the home to chemical conglomerates such as Siemens and BASF as well as to pharmaceutical companies such as Bayer. As a result these particular sectors of the German economy are especially well suited for export as well as for the import of inputs and raw materials from overseas markets such as the United States. For imports, automobiles and vehicle parts are the largest such commodities along with electronics equipment.

Trade lanes

  • Top export destinations from Germany are France, the US, UK, China and the Netherlands.
  • Top import origins into Germany are the Netherlands, China, France, the US and Italy

Infrastructure and Logistics

Germany has a well-defined and mature transportation infrastructure. It is home to Europe’s second largest container port, Hamburg as well as Europe’s largest inland port, Duisburg. In addition, the Rhine and Elbe rivers serve as major thoroughfares for barge traffic.

Its airport network consists of 23 airports that offer international service including Frankfurt which is the 9th largest airport in the world in terms of cargo with 2,132,132 tonnes moved in 2014.

Much of the cargo within the country is transported by truck as opposed to rail. As a result, because of the preference of truck, tolls are utilized. However, there has been an attempt to shift more cargo on rail to reduce emissions and road congestion.

The rail is operated by private operator, Deutsche Bahn, but receives government funding. With 37,900 kilometers of track it is one of the largest networks in the world. In recent years, Deutsche Bahn has been successful in extending its German network to China providing an alternative solution to that of air or ocean for shippers. For U.S. exporters the presence of such a well developed infrastructure means that the entire country is accessible for potential sales and distribution opportunities.

Because Germany is a member of the European Union, it follows European Union trade requirements in addition to its own requirements. The Integrated Tariff of the Community, referred to as TARIC (Tarif Intégré de la Communauté), is designed to show the various rules which apply to specific products being imported into the customs territory of the EU or, in some cases, exported from it. To determine if a license is required for a particular product, check the TARIC.

Some European directives to be mindful of include REACH, “Registration, Evaluation and Authorization and Restriction of Chemicals”, which requires chemicals produced or imported into the EU in volumes above 1 metric ton per year to be registered with a central database handled by the European Chemicals Agency (ECHA). Another directive, Waste Electrical and Electronic Equipment (WEEE), requires U.S. exporters to register relevant products with a national WEEE authority or arrange for this to be done by a local partner.

According to the US’ website www.export.gov , Germany’s regulations and bureaucratic procedures can be a difficult hurdle for companies wishing to enter the market. Complex safety standards complicate access to the market for many U.S. products. It is advised that U.S. suppliers do their homework thoroughly and make sure they know precisely which standards apply to their product and that they obtain timely testing and certification.

Goods imported into Germany from non-EU states are subject to an import turnover tax. The import turnover tax rate equals the value-added tax rates of 19% levied on domestic products and has to be paid to the customs authority.

A mature market, Germany continues to offer great opportunity for exporters particularly in automotive, chemical and pharmaceutical manufacturing. Be mindful of the intricacies associated with customs and duties within Europe and to Germany; otherwise enjoy the benefits this country has to offer.

IoT In the Logistics Space

IoT In the Logistics Space.

IoTEvery once in a while the logistics business gets to be “cool”. We’re not using a tired old pun here about the “cool chain” or perishable transportation solutions. Instead, we’re excited at the moment by the phenomenon known as the “Internet of Things” or IoT. As we’ve shown in some previous posts here at the Exporting Excellence™ blog we really like data and how it can be applied to (or derived from) international business, and IoT is all about the data.  From tracking passenger baggage to initiating preventative maintenance orders on aircraft, IoT is having a profound impact on the field of logistics and there are several ways that your business can benefit from this trend.

As we had mentioned in our post on big data, routine business processes create a great deal of data. This is primarily a byproduct of the increase in digital and online business processes – quite simply, every click we make in a browser, app or other program generates a data point that gets recorded somewhere, somehow. Big Data essentially focuses on how to compile, sort and interpret such data. IoT on the other hand is more concerned with how to “make” more data by bringing devices and gadgets that were previously inanimate and silent to “life” using network and digital communications. The result of compiling all this extra data is to enable businesses to use their resources more efficiently which in turn can increase sales, profitability, or other key business performance attributes.

We were really impressed with this recent report published by Deloitte University (part of accounting and consulting giant Deloitte Touche Homatsu) that offers some great insights into how IoT has been successfully adopted into supply chain and logistics processes as well as the many opportunities that it offers.

So what is the opportunity that IoT brings to the freight business? At the moment, most of the attention is focused on tracking cargo. The ability for an importer to determine how far from port their material sits, for example, seems to hold value for major wholesalers and retailers. Some specialized applications such as temperature monitoring for perishables and transit time tracking for pharmaceuticals seem to be gaining traction as well. A recent example of IoT technology hard at work that we came across was in the logistics of beer kegs. Already a high value segment of the logistics business, IoT is now enabling beer distributors to know how much beer actually remains in a keg. This information actually allows a bar to waste less beer (and more importantly increase yield per keg) and at the same time allows distributors to plan deliveries more efficiently. The “pre-IoT” way of measuring the amount of beer in a keg was to physically tilt it and see how heavy or light the keg was. New kegs, equipped with sensors and IoT technology can actually report the accurate quantity thereby enabling a more efficient supply and utilization process. It’s a product called iKeg from SteadyServe and you can learn more about the concept from this Wall Street Journal blog post or the company’s website. 

All of us in the logistics industry need to embrace our moment of “cool.” There is no need to expound on the many, many ways the internet has changed the world around us … we feel it everywhere. The logistics industry has lagged a bit in technological advancement because we are still a hands on, deliverable operation. It’s easy to leave the “cool” internet technology to those businesses that don’t have so many moving, physical parts. With IoT we are getting a chance to pull the technology available everywhere else, into our business. If IoT can make us operate smoother, track shipments easier, regulate temps better on perishable cargo….. what isn’t “cool” about that? And really, is anything “cooler” than increased profitability and efficiency derived from your supply chain?

 

 

Does Your Export Need a Special License?

Does Your Export Need a Special License?

Screen Shot 2015-08-27 at 3.08.41 PMLast month we received a call from an exporter who wanted to know how they could determine the ECCN of a product they were planning to ship overseas. The first problem they had was that they didn’t know what an ECCN was, or how to go about obtaining it. We did some work to help the client get the information they needed, but afterwards realized how interesting it was that something so basic to the exporting process could get totally overlooked in this manner. So while we spent the last month or two focusing on complications in the exporting process that may arise from regulations such as ITAR and EAR, we never actually considered what may happen if a shipper’s merchandise requires no license at all. Accordingly then, here are some insights into the means for determining whether your exports are in need of special licenses and if not, what does that mean in terms of your shipping and logistics processes.

Step 1:  Q: Does your shipment actually require an export license?  

A: Maybe. As we’ve detailed in earlier posts, the U.S. Department of Commerce has oversight over most export licensing matters. Factors such as the nature of the commodity or technology it uses will determine whether licenses are required.

Step 2:  Q: How do we figure out if our product requires an export license?

A: The first step in determining this is to find the Export Control Classification Number (ECCN) for your product or commodity. To find this information, exporters typically have 2 convenient options:

  1. The Department of Commerce maintains a Commerce Control List (CCL) on their website, which lists reasons for controls and requirements for export to specific destinations.
  2. Check with the manufacturer of the goods you are exporting. Most manufacturers with international sales not only know the ECCN’s of the products they’re shipping, but also make this information readily available through their websites, sales representatives and international sales & marketing personnel.

ITAR CTA

 

Step 3:  Q: What if there’s no ECCN available for your product?

A:This is not unusual at all. Most products that are not licensed do not have ECCN’s and carry the designation “EAR99”. While you are still required to comply with regulations that prohibit export to certain countries, the product itself likely won’t require any licenses from the Commerce Department if it can be categorized as EAR 99.

Step 4:  Q: So there’s no ECCN, our product falls under EAR99, and you’re not shipping to any embargoed country. Are you now free to ship out your goods?  

A: The short, simple answer is “YES”. There are other requirements to satisfy such as filing a Shipper’s Export Declaration for goods valued at $2,500 or more. Also, goods that may not require a license but that are being sold to a U.S. or foreign military or government, for example, may require compliance with licenses from the U.S. Department of State or Defense, and we have addressed those in earlier posts here on The Exporting Excellence blog.

Step 5:  Q: Shipping requires a freight forwarder. Can all of these processes be outsourced to them?

A: No. Not all export compliance can be outsourced to your freight forwarder. Filing of the Shipper’s Export Declaration and research of the required Schedule B numbers are common practice for freight forwarders. In fact a good forwarder can often give your company guidance on how to properly or better classify your goods. Also, forwarders tend to know a good deal about embargoed countries and destinations. However, where it comes to ECCN’s and licenses from other agencies, freight forwarders are usually not privy to technical data, intellectual property and other details that go into classifying a product and determining it’s relevance to export controls. Shipper’s need to do their homework and can have a forwarder assist in the process, but cannot hand off liability to any outside parties where it comes to such matters of compliance.

 

 

 

 

 

Exporting to Nigeria

Exporting to Nigeria

As part of our ongoing series of reports on the MINT countries, we turn our attention this month to Nigeria.  Along with Mexico, Indonesia and Turkey, Nigeria stands out as an economy offering strong growth rates and an increasingly favorable environment for trade and foreign investment. 

 NigeriaGraphic

Due to the recent updating of economic statistics, Nigeria now claims to have the largest economy in Africa with a GDP of US$504 billion.  What makes this adjustment in statistics significant, for U.S. exporters in particular, is the fact that Nigeria’s oil industry is no longer as dominant a sector of the economy as it once was.  Under old economic data, it was estimated that the oil industry accounted for 33% of the economy, whereas new data suggests that only 14% of the country’s GDP is derived from oil.  As a result, the Nigerian market offers a more diverse set of opportunities to American exporters.   

 

Despite the changes in economic output, Nigeria remains a challenging place to do business and in this report we highlight some of those issues and the impact they may have on U.S. exporters. 

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With a population of 170 million, Nigeria is the most populous nation in Africa.  Its recent growth has been derived from the services and international trade sectors.  Areas that offer strong growth opportunity for U.S. exports include the following:

 

Logistics and Trade Environment

 

Like most countries in Africa, Nigeria lacks good transportation infrastructure.  The impact on U.S. exporters can be observed in many ways:

 

  1. Nigerian airports are generally not well connected to the rest of the world.  Lagos, which is Nigeria’s largest city and commercial hub, is serviced by many foreign airlines, however frequency and number of carriers remains insufficient for the needs of the country.  As a result, U.S. exporters who rely on air freight should expect to incur substantially higher freight costs than they would for delivery to other equidistant export markets. 

 

  1. Nigeria’s ocean ports have long been considered an impediment to Nigeria’s international trade.  As a result, U.S. exporters can expect to incur high costs of container shipping which can have a significant impact on export order profitability.  In recent years, however, the government has committed to investing in new ports, and as a result progress has been made over the past decade.

 

  1. Nigeria relies heavily on trucking, but simultaneously suffers from poor road infrastructure.  As a result trucking and inland delivery costs are high as it can be difficult to reach final destinations that are away from the major cities or ocean ports.  Absence of a properly functioning rail system only compounds the problem as there is no means to achieve economies of scale with respect to ocean container transport inside the country.  Considering the difficulties associated with inland transportation in Nigeria, it is highly advisable for U.S. companies to ship on a door-to-(air)port basis, thereby leaving local customs clearance and delivery arrangements to the actual importer/end user inside Nigeria. 

 

  1. Customs regulations – Nigerian Customs have long been acknowledged as a barrier to trade.     U.S. exporters should take precautions to ensure that information on commercial documents such as commercial invoices, packing lists and bills of lading are accurate and consistent.  Discrepancies can cause Nigerian authorities to delay clearance of cargo upon arrival and can even result in confiscation of merchandise.  As a result exporters can face losses or reduced profitability in their export sales. 

 

Nigerian customs duties can be as high as 30% of CIF value of merchandise and in special cases can even run as high as 100% as is the case with cigarettes for example.  U.S. exporters must be aware of this as it has a significant impact on landed cost of goods and can significantly impact the viability of export sales to Nigeria. 

 

Imports into Nigeria follow a system of prepaid duty collection whereby Nigerian importers are required to electronically file details of their import shipment and prepay customs duties to a bank which in turn will forward the duty to Nigerian customs.  Nigerian importers will receive a Single Goods Declaration which must be shown on shipping documents in order for the cargo to be cleared in Nigeria.  This is significant for U.S. exporters as it is necessary for shipping documents to bear this information in order for a shipment to clear customs upon arrival in Nigeria.  Failure to furnish this information will result is seizure of goods. 

 

Although exporting to Nigeria can be difficult at times due to the logistics requirements and sanctions, it can also be very lucrative for your business. The opportunity to “own a market” currently exists in Nigeria! If you haven’t already, you should make Nigeria a part of your international growth plans.

 

 

Doing Business with Turkey

What You Need to Know about Doing Business with Turkey

Import Exporting Turkey

As we continue our series on the rising economies of the MINT countries, this month’s focus is on Turkey.  Situated at the crossroads of Europe and Asia, Turkey has long been a significant market for international commerce and continues to enjoy the benefits of its location as the trend of globalization continues.  It’s no surprise that Southern Europe, the Middle East and Central Asia are all vital markets that benefit from Turkey’s infrastructure, manufacturing and trade. 

As a NATO member, Turkey offers an environment that is both politically and environmentally friendly to the United States.  In 2013, U.S. exports to Turkey were valued at $12.1 billion while imports stood at $6.7 billion.  The combined two way trade makes Turkey America’s 37th largest trading partner.  U.S. exports to Turkey, aside from agricultural products, consist primarily of Mineral Oil, Iron & Steel, Aircraft, Industrial Machinery, Cotton Yarn and Fabric. 

Despite offering a friendly trade environment, it’s important to know that Turkish customs has very strict and difficult procedures to adhere to.  Shipments have been known to sit in Turkish government facilities for periods as long as a year simply due to discrepancies in documentation.  U.S. exporters should be keenly aware of the requirements their goods are subject to as a lack of compliance can potentially eliminate opportunity to realize profitable sales.  CTAAgricultural and food products are subject to the highest levels of scrutiny as they require importers to obtain a Control Certificate from the Turkish Ministry of Agriculture and Rural Affairs.  Over the years, we have taken on many customers who experienced tremendous difficulties as their logistics providers did not take the time to plan shipments in close coordination with Turkish customs.  To simply rush the goods out the door without planning for customs delays and objections is a recipe for disaster. 

For commercial goods, outside of the agriculture and foods sector, exporters must ensure that their shipments are properly prepared. They must be accompanied by bills of lading, packing lists and commercial invoices.  We cannot stress the importance of accuracy with your invoices.  Turkish Customs can withhold the release of goods for any discrepancies or irregularities in commercial invoices such as misspellings, discrepancies between commercial invoices and packing lists, improper calculations or tallies on invoices, and other such mistakes.  Exporters who are shipping samples of their products to prospective customers should exercise extra caution as “zero value” invoices will almost never be released by Turkish customs.  “Zero Value” invoices essentially list the product being shipped as an invoice of no commercial value, and from the standpoint of the exporter and importer this is factual.  However, Turkish Customs (and in fact many customs agencies around the world) see this as an attempt to circumvent duties and other taxes which can cause product to be impounded and destroyed.  At the very least this can present a disruption to a marketer’s business process, but more importantly the cost of shipping, storage and potential penalties and fines can cause significant financial losses.  A client of ours once tried to ship a powdered beverage mix to Turkey using one of the global courier companies, but without proper advisement on how to prepare the material, found their product (tons of it actually were being sent over for R&D testing purposes) held up by Turkish customs for nearly 6 months without any corrective action being offered to resolve the matter.  We couldn’t help them with the batch of material that got stuck in Turkish customs, but were able to prevent future mishaps by setting up a process that ensured proper customs compliance well before departure of the goods.  

From a transportation and logistics perspective Turkey is developing its infrastructure at a rapid pace.  Recent government funded projects include investments in tunnels connecting the country’s Asian and European cities, expansion of ports, and the national airline is on track to become the world’s largest airline.  As a result, U.S. exporters will find no shortage of transportation options available for delivery of their export sales.

With a projected economic growth rate of 4% per year, and a growing entrepreneurial class, Turkey offers excellent growth potential.  With a population of nearly 75 million, it is also one of the largest countries in the Middle East and hence boasts a very strong domestic market that will continue to be a source of opportunities for U.S. made goods.    

JAPAN – Powering US Exports

Japan – Powering U.S. ExportsJapan export chart

While ample attention has been paid to BRIC countries and a new focus is developing on MINT countries the fact is that Japan has long been one of America’s largest trading partners.  In 2012 U.S. exports to Japan totaled US$116 billion and with a combined 2 way trade volume of $204 billion, Japan stands as America’s 4th largest trading partner as well as the 4th largest market for U.S. exports.

As we had highlighted in this recent post Japan is the 3rd largest market for U.S. medical devices and equipment exports and in fact, according to some estimates may even be the largest market for these U.S. manufactured products.  Not surprisingly then, products classified as “Optical and Medical Instruments” account for the largest amount of U.S. exports to Japan.  Additionally, U.S. exporters will find strong demand in Japan for aircraft and parts thereof, machinery, electrical machinery and meats.  Collectively these five categories account for the majority of U.S. exports to Japan.

While the value of Japan as an export market has been well documented and established for decades, U.S. exporters need to look beyond market size and pay attention to key aspects of the trade process including logistics infra structure and trade practices and the implications of these matters on landed cost.

As a country with significant land and size constraints, as well as a dearth of natural resources, Japan faces very high costs of real estate and raw materials.  As a result costs of warehousing, labor, fuel and other inputs of the logistics process are high.  U.S. exporters should be aware of this, especially when selling goods on a Door-to-Door basis.  While Japan has excellent infrastructure, services such as trucking are very expensive and can have a significant impact on order profitability.

Similarly, with warehousing, Japan lacks the square footage that American companies are used to and this makes itself evident in terms of high storage costs.  U.S. businesses who are required to arrange storage of raw materials or finished goods inside Japan must carefully consider these costs when evaluating the viability of an export sale to this market.

U.S. exporters must also be aware of Japanese customs regulations.  While Japan is a great market with significant potential, it has also been traditionally highly protective of its local industries.  As a result, exporters must ensure proper compliance procedures are being followed not only by themselves but also by buyers, distributors or their subsidiaries in Japan.

In order to maintain compliance with Japanese customs regulations, U.S. exporters must ensure that their customer has secured the necessary import permits from the Director-General Japanese Customs.  Once an import permit has been established, exporters must ensure that all shipments are accompanied by a Commercial Invoice, Bill of Lading or Airway Bill, Certificate of Origin and Packing Lists.

For exporters dealing in goods that are licensed, a copy of such licensing and/or original documentation is required.  Similarly, goods that qualify for duty exemptions or rebates should be accompanied by statements of reduction and any supporting paperwork that may apply to WTO trade, non-WTO trade and the General System of Preferences.  Failure to comply with these requirements can result in goods being detained or even confiscated upon arrival in Japan which can have a severe impact on order profitability and repeat or long term export sales in the country.

Fortunately, Japan has world class transportation infrastructure.  Hence while the cost of doing business may be high, the ability to physically access all major markets exists, and is highly efficient.  Japan’s ports, and in particular Yokohama are amongst the biggest in the world in terms of container shipping volume and offer state of the art handling.  Japanese airports, similarly boast world class handling, and both Tokyo (Narita) and Osaka (Kansai) are amongst the biggest airports in Asia in terms of cargo throughput.

Japan’s market size and spending power, as well as recent government initiatives to boost consumer and public spending will ensure it’s position as a growth market for U.S. exporters for years to come.  With this potential comes a great number of opportunities to meet market need and with nearly four decades of exporting experience to Japan, Crescent Air Freight has consistently ranked amongst the premiere logistics service providers on the U.S. to Japan trade lanes.  We welcome the opportunity to put our considerable experience in Japan to work for your export and import business in this dynamic market.

crescent air webinar

 

The Top 7 Markets for U.S. Medical Equipment Exports

The Top 7 Markets for U.S. Medical Equipment Exportsmedical bed

The category defined as Medical Devices or Medical Equipment is a broad one.  The U.S. Department of Commerce assigns 5 NAICS codes to this market, and digging into the specifics of each classification reveals several sub sectors and categories.  According to 2012 estimates, the United States market size for medical devices and equipment stands at $110 billion, and U.S. exports of such products were valued in excess of $44 billion.  The United States enjoys a tremendous advantage in this industry over other nations largely due to its advanced R&D capabilities in both the public and private sectors.  Based on data from the United States Bureau of Census covering several NAICS codes, here are the top seven export markets for U.S. manufactured medical devices and equipment for 2014:

7. China – 2014 Medical Devices & Equipment Exports – US$1,520,069.00

It’s rare that China is not at the very top of a list of export or import markets, especially where it comes to trade with the United States.  Nonetheless, with a burgeoning population, China’s potential as a market for U.S. made medical devices and equipment will remain strong for years to come.  The sub sector of “Surgical and Medical Instruments” stands out as the largest category of U.S. exports to China at $762,943,000 in 2014.

6. Germany – 2014 Medical Devices & Equipment Exports – US$2,267,567.00

Europe’s largest economy offers exporters of Medical Devices and Equipment a strong, stable environment for international sales.  While the current strength of the U.S. Dollar against the Euro may pose some short term challenges, higher value products from the United States will continue to enjoy demand and a trade friendly environment in Germany well into the future.

5. Mexico – 2014 Medical Devices & Equipment Exports – US$2,281,228.00

As we highlighted in a recent post, Mexico is a great trading partner for the U.S. as it serves as a source of two way trade.  Surgical equipment, appliances and supplies accounted for nearly 55% of U.S. medical equipment exports to Mexico in 2014.

4. Belgium – 2014 Medical Devices & Equipment Exports – US$3,405,914.00

One of 3 European markets on this list, Belgium has long been a standout market for U.S. made medical equipment.  Surgical instruments, appliances and supplies alone represent an annual export opportunity of $3.3 billion for U.S. companies.

3. Japan – 2014 Medical Devices & Equipment Exports – US$3,560,670.00

Japan ranks as the fourth largest market for U.S. exports as we detailed in a recent post here on the Exporting Excellence™ blog.  According to some measurements, it may even be the biggest export market for U.S. made medical devices.  As home to an aging population and a culture uniquely devoted to caring for its elderly, Japan will continue to be a source of export growth for U.S. manufacturers of medical devices and equipment for years to come.

2. Canada – 2014 Medical Devices & Equipment Exports – US$3,564,214.00

America’s largest export market overall stands to see a similar standing across specific industry segments as well.  Canada offers U.S. medical equipment manufacturers a diverse market, as no specific subgroup of medical devices and equipment accounts for more than 39% of the aggregate exports of this commodity.

1.The Netherlands – 2014 Medical Devices & Equipment Exports – US$3,929,604.00

Despite a strong presence in the global pharmaceuticals marketplace, The Netherlands looks abroad for its medical equipment and device needs and the U.S. has been the primary beneficiary of this search.  As with all European markets, an aging population has a strong impact on domestic demand for healthcare related products.  As we mentioned with Germany, current strength of the U.S. dollar may cause a short term decrease in sales opportunities, however medical goods tend to be better protected from such market events due to necessities.  U.S. exporters would be well served by focusing on this market as part of their future international sales strategy.

There are several other major markets that didn’t make the top seven list here based on specialization.  For example, the category described as Opthalmic Goods enjoys strong demand in Australia, France and the United Kingdom.  Similarly, “Dental Lab Products” enjoy strong demand and growth in Italy and Spain.  Newer or smaller volume exporters should consider developing sales in Saudi Arabia, Singapore and Switzerland all of which offer strong demand for all categories of U.S. medical devices and equipment, but do not have the scale that comes with the top seven markets in this list.

Irrespective of the market or category, a capable logistics service provider is required to facilitate the shipment and overseas delivery of goods such as medical devices and equipment.  From domestic compliance to international customs clearance, Crescent Air Freight offers the depth of expertise and skill to meet the demands of exporters while maintaining focus on reducing the hidden costs and inefficiencies that can come with the process.  We look forward to assisting your business in its international expansion today and for the long haul.

NEW INCOterms CTA

Container Info & Spec Sheet

 

 

 

 

Did we mention compliance is important?

Did we mention compliance is important? Armored Vehicle

In March we highlighted the Top 5 Export Markets for U.S. Made Defense, Emergency and Security Vehicles. Despite being a highly specialized segment of the automotive industry, in 2015 we at Crescent Air Freight are experiencing double digit growth in this market as well as in the export of parts and accessories of such vehicles.  While there are significant barriers to entry in the way of manufacturing capabilities and intellectual property, the fact is that growth creates opportunities for sales and also for compliance problems.  Here are some insights into the compliance requirements faced by exporters of security vehicles and their parts and accessories.

 

As we have mentioned in earlier posts, the major two sets of regulations governing the export of defense related equipment, including defense vehicles, are International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR).  EAR apply to products that are known as “dual use” items.  Some examples that come to mind include aircraft radar which can be used for either commercial or military purposes.  In the case of vehicles, a more relevant example would be an armored SUV.  Such vehicles are often exported to countries around the world, especially to countries where domestic law and order circumstances require such protection.  However, so long as such vehicle is not armed and contains no military hardware, it is likely to fall under EAR.  “Likely” is the key word here, as there are additional factors that go into considering which regulations apply.  While most manufacturers are aware of the applicable regulations, an experienced logistics provider with experience in defense related shipments can assist in making such determinations.

 

While EAR oversight falls under the Department of Commerce (and specifically the Bureau of Industry and Security) ITAR falls under the purview of the Department of State’s Directorate of Defense Trade Controls.  ITAR applies to military goods or articles and is highly relevant to the export sales of U.S. defense contractors.  In the security vehicles market ITAR regulations apply directly to exports to U.S. military or other military entities.  As with EAR, there are significant variations and clauses in ITAR that must be adhered to in order to maintain compliance.  In the case of the armored example mentioned above, ITAR would apply in place of EAR had the vehicle been outfitted with hardware to attach a weapon to it.  Here too, however, there are substantial variations to be considered for proper classification and while a manufacturer or distributor of such equipment must have a proper “in house” compliance process, and experienced logistics service provider can offer some guidance in the classification process.

 

MRAP InteriorIn addition to the classification of the vehicle or equipment, exporters must also be aware of whether or not the destination country falls under any restrictions or bans for defense or security trade, and this may even apply to countries through which the vehicle transits.  For example, a client of ours ships parts for MRAP’s and Humvees for the U.S. military in Afghanistan, under an ITAR license.  However, their license does not allow their goods to transit through Azerbaijan.  This is significant because the most cost effective routing for air freight to Afghanistan is via Baku, Azerbaijan.  In order to maintain compliance we devised a new routing for the client that allows their product to travel only through nations that are approved for such goods under ITAR regulations.  Regulations also apply to components attached to the vehicle, hence supply chain managers need to be aware of the country of manufacture of parts and accessories that they have sourced for the final product.

 

Irrespective of which license applies, and the fact that manufacturers and distributors are likely to maintain internal compliance programs, one of the most important steps of the defense export transaction that a logistics provider must demonstrate competence with is the proper filing of the Shipper’s Export Declaration (SED) – now known as the EEI.  While the EEI filing is required for all U.S. exports in excess of $2,500.00, there are special classifications for goods shipped to the U.S. military, foreign militaries and foreign governments, all of which are relevant to the export of security vehicles and other defense equipment. 

 

As political events continue to drive demand for U.S. made defense, emergency and security equipment the need for proper compliance is more important than ever before.  Crescent Air Freight offers its clients the resources needed to support their export business in defense and commercial trade.

 

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Top 11 Export Markets for U.S. Oil and Gas Industry Equipment

Top 11 Export Markets for U.S. Oil and Gas Industry Equipment

Screen Shot 2015-08-30 at 5.47.22 PMDespite significant drops in global oil prices, demand for energy supplies remains strong.  While the supply of crude oil dominates industry and world news headlines, there are several industries ranging from chemicals to transportation services that are directly impacted by the flow of oil and gas.  We at Crescent Air Freight follow this industry closely as it directly affects many of our customers across a range of business segments from compressors to spare parts, valves and pumps and others.  Based on the general classification from the United States Census Bureau, here are the top markets for U.S. “Oil and Gas Field Machinery & Equipment” as defined by NAICS code 333132:

11. Colombia – 2014 Oil and Gas Field Machinery & Equipment exports: US$196,361,000

Beneficiary of a Free Trade Agreement with the United States since May 2012, Colombia’s oil & gas sector relies heavily on U.S. manufactured equipment to help meet its growing energy needs.  Exporters, however, should be very careful with commercial and shipping documentation to ensure compliance with local customs procedures.

10. United Arab Emirates – 2014 Oil and Gas Field Machinery & Equipment exports: US$285,467,000

Home to the vast oil reserves of Abu Dhabi and trade friendly distribution “mega hub” Dubai, the UAE has been an ongoing buyer of American made products for the oil & gas industry.  The presence of major oil industry players such as Halliburton and proximity to the world’s largest oil & gas producing markets ensures that American businesses will continue to find the UAE to be a growth market well into the future.

9. United Kingdom – 2014 Oil and Gas Field Machinery & Equipment exports: US$218,238,000

America’s single largest market for exports amongst the European Union member nations, and home to vast reserves of North Sea oil, the United Kingdom proves its worth as a solid market for U.S. exports in the oil and gas industry.

8. Canada – 2014 Oil and Gas Field Machinery & Equipment exports: US$301,898,000

As we had highlighted in our list of Top 10 Markets for U.S. Exports, Canada is the # 1 destination for U.S. exports overall.  The country has been in the midst of an oil boom over the past decade and will continue to offer American exporters of oil and gas equipment, services and affiliated products, opportunities close to home.  The Canadian Energy Research Institute estimates the country will see over $500 billion in new investment over the next 25 years, ensuring excellent opportunities for industry suppliers for years to come.

7. Angola – 2014 Oil and Gas Field Machinery & Equipment exports: US$326,030,000

In 2013 Angola ranked as the 71st largest market for U.S. exported goods (source: Office of the United States Trade Representative).  An OPEC member since 2007, Angola derives nearly 45% of its GDP from oil production.  All of this combined with a strong rate of economic growth spells good opportunity for American businesses.

6. Brazil – 2014 Oil and Gas Field Machinery & Equipment exports: US$367,223,000

While a great deal has been made of Brazil’s use of ethanol to achieve energy independence, the fact remains that the world’s 5th largest country does have significant oil reserves and demand.  When it comes time to get the crude “out of the ground” or process its natural gas, Brazil looks to U.S. companies to provide key equipment and technologies to support its energy sector.

5. Russia – 2014 Oil and Gas Field Machinery & Equipment exports: US$395,135,000

Recent political developments have resulted in the enforcement of significant trade sanctions against Russia.  U.S. exporters must exercise caution in dealing with this market for the foreseeable future.  On the upside, however, when sanctions end, business comes roaring back.  Until then, however, there’s always…

4. South Korea – 2014 Oil and Gas Field Machinery & Equipment exports: US$477,029,000

Another country on this list that enjoys a Free Trade Agreement with the United States, South Korea purchases significant volumes of oilfield products and services from the United States.  A favorable trade environment and strong political ties have made this country a Top 10 trading partner for the United States and growth opportunities will exist in the energy sector for years to come.

3. China – 2014 Oil and Gas Field Machinery & Equipment exports: US$503,942,000

Trade compliance issues are to be noted, as well as some difficulties with customs procedures, which we detailed in this recent article.  Nonetheless, China is the biggest overall market in Asia and not surprisingly this applies to the oil and gas industries as well.

2. Saudi Arabia – 2014 Oil and Gas Field Machinery & Equipment exports: US$587,509,000

The conversation on oil, gas and energy begins and ends here.  To say Saudi Arabia is a key market for the oil and gas business is to overstate the obvious.  Luckily for American exporters in this field, Saudi Arabia remains the place to look for growth.  Despite recent drops in oil prices Saudi Arabia has maintained, and slightly increased, its annual budget for 2015 and the energy sector will be the prime beneficiary of this spending.

1.Mexico – 2014 Oil and Gas Field Machinery & Equipment exports: US$842,216,000

As we detailed in this recent blog post Mexico is a great market for two way trade with the United States.  A beneficiary of the North American Free Trade Agreement, Mexico looks to the United States to service the needs of its growing energy demands.  U.S. companies enjoy the ability to reach most parts of Mexico by overland transportation services, and NAFTA enables a smooth and orderly flow of goods thereby minimizing potential customs or regulatory problems.

Rope BailerKeep in mind that these figures only refer to one classification of oil & gas industry equipment.  As energy is a massive industry, so too are the product classifications.  Exporters must take the time to learn about compliance issues and regulatory concerns for their specific product line.  Logistics companies can help by applying their considerable market knowledge and expertise.  U.S. companies are also advised to check with the U.S. Department of Commerce for market and compliance data relevant to their specific products.

 

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