1st Edition
Mastering the Business of Global Trade Negotiating Competitive Advantage Contractual Best Practices, Incoterms, and Leveraging Supply Chain Options
Much of your company’s success in global trade will be determined by how well you manage contracts and agreements for sale or purchase. Mastering the Business of Global Trade: Negotiating Competitive Advantage Contractual Best Practices, Incoterms, and Leveraging Supply Chain Options explains the key elements any international business person must know, but more importantly, it also describes how to use negotiation skills, leveraged options, and Incoterms to extract the maximum benefits from your supply chain.
At the end of the day, landed costs determine pricing and profits. As such, the book clearly explains how landed cost modeling works and how you can use these business models to leverage supply chain options. Illustrating how Inco terms impact compliance and risk, it details options to help you reduce your exposure to risk as well as best practices to help you steer clear of compliance issues that can cause costly delays.
Managing global supply chains is about constantly striving for efficiency, driving down costs, and increasing profits. With this book, you will not only learn how to negotiate better contracts, but you will also learn how to manage relationships with freight forwarders and customhouse brokers in a manner that will help you get the most value from your service agreements.
The book establishes a very simple, yet comprehensive, roadmap that both the neophyte and the more experienced global supply chain executive can easily follow and master. By following the time-proven advice and roadmap detailed in these pages, you will learn that it is possible to engage in more deals and increase your returns, while reducing your overall risk exposure.
This book is part of The Global Warrior series.
The Role of Contracts in Global Trade
Contracts in Global Trade
Case Study: When Contracts (or Lack of) Fail
Transparency of What Both Parties Are Trying to Accomplish
Trust
Capabilities that Can Be Delivered
Responsible Structure
Managing International Contracts: Best Practices and Necessary Deliverables
Third-Party Options
Consultants
Law Firms
Freight, Logistics, and the Global Supply Chain
Freight, Logistics, and the Global Supply Chain
Managing Incoterm Options with Freight Forwarders, Customhouse Brokers, and Transportation Intermediaries
Advanced Knowledge of Incoterms
Global Reach through Office or Agency Network for Local Incoterms Knowledge and Applications
Global Resources to Execute Various Incoterms Options
Incoterms: Foundation of Global Trade
Functional Definition and Use
Terms of Sale
Terms of Payment
How Freight Is Handled
How Insurance and Risk Are Managed
When and How Title or Ownership Is Transferred
How and When Revenue Gets Recognized
Who Is Responsible for Trade Compliance Issues
Legal Jurisdiction
How Disputes Are Settled
How Company Tax Issues (IRS or Equivalent) Are Mitigated
Packaging, Marking, and Labeling
Intellectual Property Rights
What We Need to Know about Incoterms to Obtain Better Commercial Advantages
Background and History
Incoterm Member Countries
The UN Convention on Contracts for the International Sale of Goods
Issues in World Governance
Governmental Profiles
World Customs Organization (WCO)
Organization for the Prohibition of Chemical Weapons (OPCW)
Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES)
Montreal Protocol
Organisation for Economic Co-operation and Development (OECD)
Wassenaar Arrangement
The Lacey Act
Nuclear Non-Proliferation Treaty (NPT)
Australian Quarantine and Inspection Service (AQIS) Laws
Items You Must Declare When Importing or Traveling or Shipping to Australia
Global Governance Guidelines for Incoterms
What We Need to Know about Incoterms 2010
Rules for Any Modes of Transport
Rules for Sea and Inland Waterway Transport
2000 versus 2010
Placing the Book into Two Sections
FOB On-Board
Domestic Use
Security-Related Clearances and Information Are Addressed
Terminal Handling Charges Responsibility Clearly Defined
"Goods Sold in Transit" Transactions Addressed
Ocean Freight and FOB Responsibilities of Seller and Buyer Redefined
Cargo Insurance Better Defined
Specific Incoterms Nuance Changes
Best Practices: Making the Right Choices
10 Action Steps
Engage Senior Management
Establish a Point Person and a Team Approach
Learn Incoterms and Establish an Incoterms Guru!
Integrate Incoterms in Every Corner of the Organization
Partner with Providers
Plan the Best Options and Leverage Sales and Purchases
Foreign Inland Freight Can Be a Nondutiable Charge
Educate Suppliers, Customers, and Vendors
Do Not Operate in a Vacuum
Develop and Use Technology Options
Develop Competitor-Friendly Options; Network
Networking
Develop Resources
Key U.S. and Globally Based Associations
Global Examples
Key Periodicals
Senior Management: Executing a Best Practice Strategy
Incoterms Management
Develop ITM into Your Business Processes
Learn the Basics of Incoterms
Develop Resources for Incoterms Expertise
Understand How Incoterms Decisions Impact the Global Supply Chain and Break Down Fiefdoms
Create Integration Management into Incoterms Decision-Making
Learn Leverage Options in General, and Then Apply to the Specific Scenarios in Your Global Supply Chain Metrics
Establish Service Provider, Supplier, Vendor, and Other Business Relationship Communications and Standard Operating Procedures
Integrate Technology into the Incoterms Management Process
Create Policy Guidelines for Incoterms Options and Trade Compliance Management. For Public Companies, SOX Incoterms Management Is Critical
Engage Incoterms Lobbying to Increase and Enhance Change to Your Company’s Benefit
Government Security Programs
C-TPAT and AEO
United States: C-TPAT
Europe: AEO
The AEO Guidelines
Japan
Canada Partners in Protection
Landed Cost Modeling
Definition of Landed Costs
Cost to Export from the Originating Country: $$$
Inland Freight from Origin to Outbound Gateway: $$
Foreign Freight from Gateway to Gateway: $$$$
Marine Cargo Insurance: $
Warehousing: $
Inland Freight from Inbound Gateway to the Final Destination: $$$
Customs Clearance: $$
Required Documents in Mexico
Import Licenses, Permits, and Registrations: $$
Bottom of Form
Preshipment Inspection
Ancillary Freight Charges, Demurrage, Etc.: $
Duties, Taxes, VAT, or GST, Etc., … $$$$
Government Inspection Requirements $
Handling and Related Services … $$
Case Studies
Landed Duty Paid: Import Case Study #1
Landed Cost CIF: Case Study #2
Reducing Costs: Case Study #3
Small U.S. Exporter, Changing the Incoterms Choice: Case Study #4
Chinese Exports to the United States: Case Study #5
Trade Compliance Issue: Case Study #6
German Optics Company, the DDP Advantage: Case Study #7
Global Regulation and Compliance Management
Overview
Trade Compliance and Regulation Impact Incoterm Options
Exports
U.S. Government Resources for AES
North American Free Trade Agreement (NAFTA)
Pedimento Form
United States Foreign Trade Regulations
Foreign Trade Regulations 15 CFR Part 30, Incoterms, and Routed Transactions
Asia Reviewed
Importing into China
General Documents
Specific Documentary Requirements
Australia
Korea
Europe
France
Examples of Value-Added Taxes
Canada, United Kingdom, Australia, New Zealand, Europe
Canada
United Kingdom
Australia
New Zealand
Europe
German Export Control
Objectives of Export Control
International Export Control Bodies
Licensing Procedure
Developing Nation: Importing into Nigeria
Import Guidelines
Latin America
Brazil
Mexico
Argentina
Imports
Importing into the United States
Basic Guidelines for Importing into the United States
Arrival of Goods
Entry of Goods
Other Types of Entry
Customs (CBP) Examination of Goods
Importer’s Security Filing and Incoterms in the United States
Powers of Attorney and Incoterms
Customs Powers of Attorney
Revocation of a Power of Attorney
Customs Bonds
Types of Bonds
Amount of Bond
Breach of Bond
Managing INCO Trade Compliance Issues: USPPI and Ultimate Consignee
USPPI: United States Principal Party In Interest
Exporter of Record Replaced by U.S. Principal in Interest (USPPI)
Responsibility of USPPI and Forwarding Agent in a Normal Export Transaction
Responsibility of USPPI and Forwarding Agent in a Routed Export Transaction
Ultimate Consignee
Best Practices: Making the Right Choices
Ten Action Steps
Senior Management Engaged and Executive Best Practices in Incoterms
Establish a Point Person and a Team Approach
Learn Incoterms and Establish an Incoterms Guru
Integrate Incoterms in Every Corner of the Organization
Partner with Providers
Plan the Best Options and Leverage Sales and Purchases
Foreign Inland Freight Can Be a Non-Dutiable Charge
Educate Suppliers, Customers, and Vendors!
Do not operate in a vacuum!
Develop and Utilize Technology Options!
Develop competitor friendly options … Network!
Networking
Develop Resources
Key U.S. and Globally Based Associations
Global Examples
Key Periodicals
Education, Training, and Skill Set Development
Internal Training Options: Connectivity in Your Company
Senior Management Overview
Middle Management Oversight
Operational Level Functionality
Training Skill Set Agenda
Risk Management and Insurance Controls
Risk Management in the Global Supply Chain: A 10-Step Primer
Overview
Ensure Senior Management Commitment
Establish a Risk Management Focus
Complete a Global Risk Management Assessment and Benchmarking
Identify the Three Key Risk Providers
Profile the Major Areas of Risk and Establish Risk Strategies
Decide Risk Retentions and Transference Policies
Identify the Benefits of Loss Control Management
Establish Trade Compliance Protocols
Use Technology in Risk Mitigation
Training Is a Work-in-Process
Risk Management Case Study
Terms of Sale versus Terms of Payment
Marine Cargo Insurance and Incoterms
Transfer of Title and Revenue Recognition
Transfer of Title or Ownership
Revenue Recognition
Evidence of Arrangement
Delivery or Services Rendered
Price Is Fixed or Determinable
Collectability Is Reasonably Assured
Sale of Goods
Incoterms and Sarbanes–Oxley
Tax Considerations
Additional Tax Issues
Ad Valorem
Value-added (2)
Supplemental Taxes
Summary
IPR, Trademarks, Patents, and Other Intellectual Property Rights
Carnets and Incoterms
Carnet Use
Bonded Warehouses and Foreign Trade Zones
Bonded Warehouses
General Provisions in Vietnam for Bonded Warehouses
India
United Kingdom
Definition of a Customs Warehouse
United States
What Is a U.S. Customs Bonded Warehouse?
What Are Its Advantages?
Mexico
Packing, Marking, and Labeling
Global Supply Chain: Best Practices
Senior Management: Executing a Best Practice Strategy
Incoterms Management
Develop ITM into Your Business Processes
Learn the Basics of Incoterms
Develop Resources for Incoterms Expertise
Understand How Incoterms Decisions Impact the Global Supply Chain and Break Down Fiefdoms
Create Integration Management into Incoterms Decision-Making
Learn Leverage Options in General, and Then Apply to the Specific Scenarios in Your Global Supply Chain Metrics
Establish Service Provider, Supplier, Vendor, and Other Business Relationship Communications and Standard Operating Procedures
Integrate Technology into the Incoterms Management Process
Create Policy Guidelines for Incoterms Options and Trade Compliance Management. For Public Companies, SOX Incoterms Management Is Critical
Engage Incoterms Lobbying to Increase and Enhance Change to Your Company’s Benefit
Government Security Programs
C-TPAT and AEO
United States: C-TPAT
Europe: AEO
The AEO Guidelines
Japan
Canada Partners in Protection
Summary
Appendix
Copyright and Trademark Policy
Trademarks
Copyright
Glossary
U.S. Trade Terms
U.S. Free Trade Agreements
Why Should You Care About Free Trade Agreements (FTAs)?
What is An FTA Negotiated by the United States?
What Types of Behaviors Are Addressed in a U.S. FTA?
With Which Countries Does the United States Have An FTA?
U.S. FTA Partner Countries
How Can U.S. Companies Identify Tariffs On Exports to FTA Partner Countries?
Ultimate Consignee Verification
Overview
Objective
Definition
Verification Questions as Affirmation of Ultimate Consignee Designation
U.S. Customs and Border Protection Office of Strategic Trade Regulatory Audit Division Treatment of Ultimate Consignee Transactions in a Focused Assessment
Introduction
Background
Procedures
Consolidated Entries with Multiple Ultimate Consignees
Unsolicited Merchandise on Entries Listing a Company as UC
Entries Initiated by the UC but Another Entity is IOR
Routed Freight Transactions
Routed and Non-Routed Export Transactions
Tax Rates
EU Countries
Non-EU Countries
VAT Registered
Index
Biography
Thomas A. Cook is a seasoned logistics, international trade and supply chain executive. Tom is the author of more than 300 articles and 12 published books on global trade and related subjects. Tom’s reach into global corporations is deep, with extensive experience in guiding companies on supply chain management and Incoterms. Tom's work is internationally recognized with a global reach spanning six continents.
Tom is Managing Director of Blue Tiger International in New York, a prominent and exclusive management consulting firm specializing in customized supply chain and management solutions. (www.bluetigerintl.com).
Tom’s bestseller, Managing Global Supply Chains (Auerbach2008) … is considered by many to be one of the most comprehensive guides to best practices in global supply chain management in both the academic and commercial world. It’s focus on trade compliance, security and dealing with Terrorism, became the ‘go to’ reference guide for trade practitioners, following the Events of 9/11. Tom is available for inquiries at [email protected] or [email protected].