What You Need to Know to Ship Your Online Business Goods Overseas
Don’t depend on ground mail (appropriately nicknamed snail mail) to communicate with overseas customers. Use e-mail and fax to get your message across — and, if you have to ship information or goods, use airmail express delivery. Surface mail can take weeks or even months to reach some regions of some countries — if it gets there at all.
Your customer may ask you to provide an estimate of your export costs by using a special set of abbreviations called incoterms. Incoterms are standardized acronyms originally established in 1936 by the International Chamber of Commerce. They establish an international language for describing business transactions to prevent misunderstandings between buyers and sellers from different countries. Incoterms thus provide a universal vocabulary that is recognized by all international financial institutions.
Incoterms are most likely to apply to you if you’re shipping a large number of items to an overseas factory rather than, for example, a single painting to an individual’s home. But just in case you hit the big time, you should be aware of common incoterms, such as
EXW (Ex Works): This term means that the seller fulfills his or her obligation by making the goods available to the buyer at the seller’s own premises (or works). The seller doesn’t have to load the goods onto the buyer’s vehicle unless otherwise agreed.
FOB (Free on Board): This term refers to the cost of shipping overseas by ship — not something you’re likely to do in this high-tech day and age. But if you sell a vintage automobile to a collector in France, who knows?
CFR: This term refers to the costs and freight charges necessary to transport items to a specific overseas port. CFR describes only costs related to items that are shipped by sea and inland waterways and that go to an actual port. Another incoterm, CPT, can refer to any type of transport, not just shipping, and refers to the cost for the transport of the goods to their destination.
You can find a detailed examination of incoterms at the International Chamber of Commerce website.
If the item you’re planning to ship overseas by mail is valued at more than $2,500, the United States requires you to fill out and use the Automated Export System (AES) and submit it to a U.S. customs agent. The AES collects Electronic Export Information (EEI).
To use the AES, you need to obtain either filer certification or, if you create computer programs, software certification. You have to file for certification and take a short test. Links to detailed instructions on how to use the AES are available on the U.S. Census Bureau’s website. You can file your electronic export data with the AES through the U.S. Customs Service’s website.
Some nations require a certificate of origin or a signed statement that attests to the origin of the exported item. You can usually obtain such certificates through a local chamber of commerce.
Some purchasers or countries may also ask for a certificate of inspection stating the specifications met by the goods shipped. Inspections are performed by independent testing organizations.
Wherever you ship your items, be sure to insure them for the full amount they are worth — and tell your customers about any additional insurance charges upfront. Choose an insurance company that can respond quickly to claims made from your own country and from your customer’s country.