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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Exporting to South Korea

Exporting to South Korea.

Earlier this year, here at the Exporting Excellence blog, we put out a lot of research on leading markets for U.S. exports. Examples included the Top 7 Markets for US paint coatings manufacturers, Top 6 Markets for automotive equipment exporters,  as well as the list of Top 10 markets for U.S. exports in general. What struck us as interesting is that for all the attention paid to Canada, China and Mexico one of the most important trading partners that the United States has is South Korea. Despite not being a very large country in terms of size or population, nor being in possession of abundant natural resources, South Korea has built itself into one of the most important economies of the world.

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South Korea’s ability to supply high quality inputs such as steel as well as finished products like automobiles is an excellent example of the depth of its industrial base. Meanwhile, South Korean demand for U.S. agricultural and consumer goods sets it apart from other trade partners as an excellent source of two way trade for U.S. companies.

South Korea’s trade and political stability, as well as its long history of friendly relations with the United States has resulted in the establishment of a Free Trade Agreement between the two countries. Known as the KORUS FTA, this agreement allows U.S. companies access to greater opportunities in the South Korean market than ever before. U.S. exporters of specialty chemicals, advanced automotive technology, agricultural products and wide array of commercial and industrial products can now sell product in South Korea free of tariffs (also known as duties and taxes) and quota (effective restrictions on nature and quantity of specific products). In 2014 $24 billion worth of U.S. exports benefitted from the FTA with South Korea and that number has grown in 2015 and will continue to grow.

The key benefit associated with a free trade agreement is an easier trade environment. South Korea proves this as it is not a difficult country to trade with. South Korean Customs and various government ministries are not unusually difficult to deal with when it comes to obtaining import permits and clearances. As a result, U.S. exports to South Korea do not find their landed costs inflated by duties or other bureaucratic formalities.

South Korea’s logistics infrastructure is amongst the best in the world. Incheon Airport services Seoul, which is the country’s largest city and capital. Ocean port facilities in Busan are world class and are serviced by most major steamship lines. Costs of logistics, however, can be slightly high. While South Korea has an excellent labor force, it also faces high labor costs and expensive facilities costs which can impact warehousing and storage. This can be acutely felt by importers of large air freight shipments, as they are subject to storage charges at Incheon airport 24 hours after cargo arrival. Hence, freight arriving on Friday night or Saturday is likely to incur an expensive bill for storage. This can have a significant impact on the profitability of export sales to this market.

Standard international trade practices apply when dealing exporting to South Korea. Exporters must furnish originals or copies of commercial invoices and packing lists for all goods being exported to South Korea. Exporters of foods and pharmaceuticals must also provide necessary licenses and permits from the Ministry of Health and Welfare in order to have their goods cleared for import into the country.

In our industry we always focus on the big guys: Canada, China, Mexico.. it’s refreshing to read about another market that perhaps was never considered . South Korea certainly fits that bill and is worth a second look when considering new markets for your company.

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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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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Top 10 Markets for U.S. Exports

Top 10 Markets for U.S. ExportsScreen Shot 2014-05-22 at 12.51.06 PM

At the Exporting Excellence™ blog, we’re all about international trade.  International trade does more to create jobs, promote cultural ties, create an interchange of ideas, transfer technology and promote understanding throughout the world than any other means of diplomacy, foreign aid, statecraft, etc.  Most of all, international trade is a great enabler of economic growth and wealth creation for all countries of the world.  While we have posted content about specific markets on this blog, we’d also like to introduce a series of lists that outline the best markets for U.S. exports in general and by specific industry.

The proof is overwhelming: export sales can grow your business far more than local sales.  After all, why limit yourself to your zip code when you can literally sell to the world.  Here then, is a look at the top 10 markets for U.S. exports:

# 1 – Canada.  Value of U.S. exports purchased in 2013: US$301.6  billion. Exporters of automobiles, trucks and accessories thereof take note: Canadians love large and midsized cars and trucks made in the USA.

#2 – Mexico.  Value of U.S. exports purchased in 2013: US$226.1 billion.  America’s neighbor to the south is well situated to engage in two-way trade with all NAFTA countries as we detailed in a recent blog post.  U.S. exporters of industrial machinery, agricultural products and dairy products will find a great deal of opportunity in Mexico.

# 3 – China.  Value of U.S. exports purchased in 2013: US$121.7 billion.  See, it’s not a one way street!  While China does supply an enormous amount of manufactured goods to the United States, American companies exporting agricultural products and hi-tech equipment are going to see growth in China for years to come.

# 4- Japan.  Value of U.S. exports purchased in 2013: US$65.2 billion.  Japan has a diverse consumer market as demonstrated by the fact that U.S. exports of medical instruments, aircraft equipment and industrial machinery are in high demand.  Japan, like China, is a good market for U.S. technological goods and services.

#5 – United Kingdom.  Value of U.S. exports purchased in 2013: US$56 billion.  See how trade works?  Not only political allies, but also major trading partners, the U.S.-U.K. relationship remains one of the closest in the world on so many levels.  U.S. exports of agricultural products as well as foods continue to enjoy growth in the U.K. despite the economic turbulence of recent years.

# 6 – Germany.  Value of U.S. exports purchased in 2013: US$44.2 billion.  Technological goods, pharmaceuticals and medical equipment from the United States are in high demand in Germany.  It is the strongest of Europe’s economies and should be a key part of your Europe export strategy.

#7 – Brazil.  Value of U.S. exports purchased in 2014: US$44.1 billion.  We profiled Brazil in a recent blog post as it offers great potential for U.S. exports.  Machinery and aircraft equipment account for the lion’s share of Brazilian imports from the U.S.  Tourism also remains a growth sector with substantial interest from U.S. tourists and investors.

# 8 – The Netherlands.  Value of U.S. exports purchased in 2013: US$42.6 billion.  U.S. exporters in the fields of “Clean Tech”, medical equipment, and biotechnology will find The Netherlands to be an attractive market with strong growth potential.

# 9 – South Korea.  Value of U.S. exports purchased in 2013: US$41.7 billion.  Along with Canada and Mexico (NAFTA), South Korea is one of the few countries that shares a Free Trade Agreement with the United States.  Opportunities abound for companies exporting aircraft related equipment and for providers of research and development services and technology.

# 10 – France.  Value of U.S. exports purchased in 2013: US$31.8 billion.  Known for their rich artistic tradition, ironically, French imports of U.S. artwork exceed $200 million annually.  Industrial goods such as specialty chemicals and high technology equipment from the United States enjoy strong demand in France as well.

Sources for this list include the U.S. Commerce Department which publishes superb trade data available at no cost to U.S. businesses. 

Additional country data was obtained from the U.S. Bureau of Census, and Inc. Magazine.

Importing & Exporting with Indonesia

MINT (Mexico, Indonesia, Nigeria & Turkey) – Drivers of Future Growth for U.S. BusinessesScreen Shot 2015-01-21 at 7.20.50 PM

Continuing our focus on the global markets that offer the brightest prospects for U.S. exports and imports, we now turn our attention to Indonesia. Our previous reports had focused on the BRIC countries, namely Brazil, Russia, India and China. Subsequently, a new crop of countries known as MINT (Mexico, Indonesia, Nigeria & Turkey) has arisen as drivers of future growth for U.S. businesses. MINT is an acronym originally coined by Fidelity Investments, a Boston-based asset management firm and was popularized by Jim O’Neill of Goldman Sachs, who had created the term BRIC. The term is primarily used in the economic and financial spheres as well as in academia. Its usage has grown especially in the investment sector, where it is used to refer to the bonds issued by these governments. These four countries are also part of the “Next Eleven”. We recently profiled Mexico and identified it as a source of excellent two way trade with the United States. This month we turn our attention to the Indonesian part of MINT

Based on key metrics such as market size, growth potential and accessibility, Indonesia has emerged as a country offering strong economic growth potential. According to World Trade Organization statistics, Indonesia is the world’s 27th largest exporting country. Indonesia is also the world’s fourth most populous country after China, India, and the United States and the world’s third most populous democratic country after India and the United States. In 2009, BRIC and Indonesia represented about 42 and 3 percent of the world’s population respectively and about 15 percent of global GDP altogether. All of them are G20 countries. By 2015, Internet users in BRIC and Indonesia will double to 1.2 billion. In 2009, Indonesia was the only member of the G20 to lower its public debt-to-GDP ratio – a positive economic management indicator. U.S. companies exporting industrial machinery and equipment, chemicals and food products can benefit from opportunities in Indonesia.

From a logistics perspective, Indonesia does have some significant limitations that can adversely affect your export business. The primary issue the country faces in this regard is a weak transportation infrastructure. While Indonesia has been steadily investing in its ocean ports and diversifying traffic away from the main port of Jakarta, there is still a great deal of work to be done. Airport infrastructure in the major cities of Jakarta and Surabaya also are strong and well suited to international trade. However, poor road infrastructure can create significant challenges for U.S. exporters who are selling goods on a DDU or DDP basis. Delays in delivery times and increased costs associated with locating suitable trucks for local delivery can inflate costs thus eroding profit margins on export sales.

Another major issue that U.S. exporters must contend with, and one that poses serious obstacles to Indonesia’s growth as a desirable market for foreign goods and investment, is that of customs procedures. The basic documentary requirements for import into Indonesia are rather straightforward. Exporters must provide:

1. Airway Bill or Ocean Bill of Lading that show the actual cost of transport.

2. Commercial Invoices that clearly state the buyer and seller of goods.

3. Certificate of insurance.

4. Certificate of Origin.

Despite these clear and brief requirements, however, the potential for delays and cost overruns resulting from customs compliance issues is significant. For example, the requirement that shipping documents should state the actual cost of transport is significant as Indonesian customs charge import duties on the combined value of merchandise value and cost of transport. Exporters must be aware of this as it has a direct impact on the landed cost of their merchandise. Logistics providers should be aware of this and ensure that their documents reflect accurate charges so as to prevent their clients from unnecessarily facing excessive duties which can result in lost profits and claims from dissatisfied or “overcharged” customers.

Similarly, the accuracy of information stated on commercial invoices is of utmost importance. Discrepancies in the details of the seller, buyer or merchandise stated on invoices can cause Indonesian customs officials to withhold release of goods until corrections or amendments are made thereby resulting in additional costs such as storage, detention charges, courier costs for replacement documentation and fines or penalties for incorrect paperwork.

While the potential of Indonesia as a market for U.S. goods is significant, exporters and logistics companies must be keenly aware of the pitfalls that come with shipping to this market. Knowing these pitfalls is significant to your growth in logistics. Even with pitfalls Indonesia will be ranked seventh in GDP by 2050 according to Jim O’Neill. The country is the largest economy in Southeast Asia and a member of the G-20 major economies. Currently Indonesia has the world’s 9th largest GDP-PPP and 16th largest nominal GDP. Definitely not a market to ignore.

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Exporting to Mexico

Exporting to Mexico

MexicoContinuing our series of reports on emerging markets, we now focus our attention on Mexico as the first member of the MINT group of countries whom many believe offer the strongest growth prospects and opportunities for U.S. exporters in the years to come.

Bolstered by the existence of the North American Free Trade Agreement (NAFTA), U.S. exports to Mexico reached $226 billion in 2013 making it the 2nd largest export market for U.S. goods. The leading products exported from the United States to Mexico included electrical machinery, vehicles and plastics. However, significant trade opportunities exist in sectors such as agricultural products, professional services and mineral oils and fuels.

Mexico also serves as an excellent source of imports for U.S. businesses as the country has a very strong and developing industrial base. These capabilities, combined with Mexico’s proximity to the United States have allowed it to become the country’s 3rd biggest supplier in 2013. In this respect Mexico is unique as a country that offers large export sales and import sourcing potential. Only China is similarly positioned as a vital source of two way trade with the United States.

One of the biggest beneficiaries of this two way trade is the country’s logistics and transportation infrastructure. Trucking, in particular, accounts for the largest share of U.S.-Mexico trade and as a result the country offers excellent options for overland shipping to and from the United States. Due to the substantial volume of traffic between both countries, the Mexican market can even provide very creative logistical solutions such as consolidated shipping across various industry segments resulting in a more favorable logistics cost structure.

Despite the well-developed logistics capabilities that Mexico has, there are some parts of the cross-border shipping process which can cause problems for U.S. exporters. For example, when cargo crosses the border by truck, there may be multiple intermediaries (transporters, customs brokers, etc.) who are involved in the clearance and handling of your cargo. As a result, it can be difficult at times to obtain proper tracking & tracing information on cargo entering Mexico. Working with a logistics service provide that not only has the tracking tools in place, but also maintains a system of careful oversight can help mitigate this problem considerably.

An additional source of trouble for U.S. exporters can arise in working with Mexican customs. Mexican customs brokers face significant regulatory compliance standards and the entries they submit are subject to scrutiny long after a shipment has cleared the border. In fact, Mexican customs can request data on shipments going back up to 5 years. This is significant because any mistakes in classification of cargo or improper filing of a customs entry can result in future shipments being held at the border due to past non-compliance. The upside to this is that a high quality, reputable Mexican customs broker is absolutely invaluable and U.S. companies who are required to arrange customs clearance should ensure that they hire the right parties or work with a logistics provider who has collaboration with a strong Mexican broker. Proper attention to this detail will ensure long term success in terms of export sales and profitability in the Mexican market.

Shippers of small lots of cargo will continue to find the Mexican marketplace to be challenging. While large, full truckload (FTL) shipments are easy to coordinate cross border, or even within Mexico, the market for less-than-truckload (LTL) is considerably underdeveloped and as a result service levels are spotty at best. In order to offset some of the risks posed to your freight by this dearth of service options, U.S. companies should consider working with specialists in the Mexican market who often have larger volume and can combine loads into a dedicated full truck. This practice is used by some of the largest companies doing business in Mexico and it allows multiple companies to access the safety and reliability of a full truck while also offsetting the hidden costs of wasted space and underutilized capacity.

Insurance liability is another key attribute of the export process to Mexico that can pose significant challenges. Mexican insurance regulations are extremely favorable to the transporter of goods, and as a result, relying solely on a carrier’s coverage is not likely to offer sufficient protection to a U.S. company in the event of loss or damage of goods. Additionally, collecting insurance compensation within Mexico is not an easy process and is often unsuccessful. Companies who currently have a global insurance coverage in place are advised to utilize it for their trade with Mexico. Smaller companies who may not have a global policy should consult with an insurance broker to make sure that their exports to Mexico are properly covered for loss, theft or damage.

Mexico offers excellent opportunities for U.S. exports and imports due to its proximity to the United States, its strong manufacturing and transportation sectors and a good labor and consumer market. Companies should consider this market as a source of growth opportunity in years to come and prepare for the challenges and rewards that it offers accordingly.

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MINT- The new BRIC

MINT- The new BRIC

During the first half of the year 2014, we focused on the BRIC nations: Brazil, Russia, India, and China.

Map of the MINT countries

Now as we move towards the latter half of 2014, we plan to focus on yet another group of emerging markets vital to the international business prospects of U.S. exporters: MINT. MINT nations consist of Mexico, Indonesia, Nigeria and Turkey.

Some of the major highlights of each of these markets, which we believe will be of great interest to U.S. exporters are as follows:

  • Mexico – According to economists, the average income of Mexican households will grow four-fold over the next 25 years. Along with this, recent market oriented reforms undertaken by the Mexican government are designed to attract more foreign investment. Thus the opportunities for U.S. exporters as well as investors seem to be very favorable for several years to come.
  • Indonesia – A stable political environment, strong coal reserves, a population nearly as large as that of the United States (est. 250 million) and a median age of only 28 makes this country an attractive destination for U.S. exports.
  • Nigeria – One of Africa’s largest countries, it has a population of 177 million. Powered by excellent oil reserves and recent implementation of stable economic policies, Nigeria expects a long period of sustained high economic growth. Export potential for U.S. goods is likely to grow in several sectors as a result.
  • Turkey – Due to its geographic location, Turkey enjoys the status of being both Eastern as well as Western. Having enjoyed strong economic growth over the past several years, it promises to be a continued source of opportunity for U.S. export and import growth.

Alongside the fruitful opportunities each of these markets presents to U.S. exporters, there are unique logistical challenges as well. Ranging from customs regulations to bureaucracy and infra structure issues, these challenges can pose great threats to export order profitability as well as business development. Thus, we at Crescent Air Freight look forward to leveraging our four decades of experience in international logistics by keeping you updated on the challenges of these markets.