U.S. Exports of Banking Equipment

U.S. Exports of Banking Equipment

Here’s What We’ve Noticed:

If you follow the world of online transactions and mobile payments, then you’ve heard about such important events as the IPO of Square, Inc. and the spinoff of PayPal from global ecommerce giant Ebay. While these startups and relative new comers to the financial markets are gaining market share the fact remains that banks continue to be the most important players in the global market for financial services, products, payment processing, and the like. So what exactly does this have to do with logistics and exports? check scannerCertainly there are the super high value logistics services of transporting currency, gold and other cash equivalents, but at Crescent Air Freight we’ve been seeing something more compelling in the banking business. Specifically we’ve experienced considerable growth over the past year in the export of banking equipment such as check scanners, ATM’s, money counters and the like. What is becoming clear from these traffic patterns is that the global banking industry is undergoing a huge change and new technologies threaten to disrupt financial business models as a growing percentage of populations in emerging markets reach middle class status. As such, the demand for banking equipment will increase in the years to come.

Emerging Markets

As the base of middle class consumers around the world expands, a variety of banking or commerce related products have seen their demand grow. Point-Of-Sale terminals for example have seen a sharp increase in demand over the past few years. Additionally, beyond payments, the proliferation of inventory management systems, loyalty programs and advanced vending machines has spurred demand for both software and hardware that is required to support such transactions. As such, Transparency Market Research forecasts point-of-sales terminals market growth to be at 11.6% annually from 2014 – 2020. Considering the market size was estimated to be $36.86 billion in 2013 there’s clearly a great deal of growth yet to come.

Aside from banking, retail and healthcare are two areas that are expected to continue to feed demand for point-of-sale and payment processing equipment. In terms of countries, U.S. exporters in this segment will find demand in many of the emerging markets of the world. According to The World Bank, cash demand in Europe is growing at 4.5% per year and within BRIC countries cash demand rates are growing at 11% per year. South Africa is another bright spot in terms of the demand for cash and banking equipment.

If cash demand is influenced by population then it stands to reason that China and India need to be at the very top of the list of potential growth markets for this sector. Indeed the number of ATM’s in China has tripled since 2009 making it the largest ATM market in the world.

India has also experienced rapid growth over the past decade, ranking as the world’s fourth largest ATM market in 2014, and trailing only China, the United States and Japan. However, as rural development increases in India and as cash demand increases proportionately, it is expected that India will surpass the United States as the second largest ATM market in the world.

In addition to ATM’s, we have observed (and U.S. export data confirms) growth in demand for U.S. exports for check scanners and money counters over the past year. In addition to emerging markets we have seen upgrade cycles and bank branch expansion in markets such as Qatar and the United Arab Emirates drive significant project demand in 2015.

The Trade Data

According to U.S. Census Bureau statistics, 2014 exports of point-of-sale equipment were valued at US$202.3 million which reflected a slight decrease from 2013 levels. The largest markets for U.S. exports in this category were Canada, Mexico and China.

ATM exports are even more appealing for U.S. companies and 2014 overseas sales stood at $103.80 million which was almost a 100% increase over 2013 levels of $50.7 million. Leading markets for U.S. exports of ATM’s were the Philippines, South Africa, and India.

The Outlook

The outlook for banking equipment exports will likely remain strong for several years to come. The combination of technology, population growth and increased global consumption will ensure a steady need for equipment to support all segments of this market and its transactions.

Banking equipment is of high value and generally has a long life cycle. Hence, its logistics and transport are similar in many ways to that of other capital goods such as oil & gas equipment or even sensitive electronics. A combination of direct flights and sailings, high quality trucking services and destination delivery options and a good system of tracking in transit will ensure that exporters get true value from the logistics process that supports their export sales.

 

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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.

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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.

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