Learning Vital Export Information

Shippers Guide is the learning page of MMS Plus. Here we answer the five W’s and H of several issues in the shipping industry. This week we learn some vital export information such as, how to do export documentations as well as the role of cost and pricing, using the Nigerian Export Promotion Council’s template. Read and find out more about export documentations.

Export business worldwide is mainly about documentation. This is because much reliance is placed on documents relating to price, quantity, packaging, shipment/movement, origin etc., in a bid to confirm adherence to stipulated procedures. The buyer for instance needs documents that would enable him clear the goods in his country while the seller/exporter needs documents to ensure that he will get paid. Consequently, goods may not be exported to destination outside Nigeria unless the exporter has complied with the prescribed documentation requirements.

Export documentation is the important records of an international transaction.  It includes Using the correct trade terminology, right certifications from appropriate authority (agreed by both parties), clearly defining the transfer of interest and liability, selecting the right method of payment and sending the best quotation possible forms part of effective exporting. After concluding sale, proper and timely selection, preparation and distribution of documents are equally essential.

Documentation is more important than the goods as it is unlikely that anyone will see the goods from the time of packing to final delivery. Documents are required to prove that all functions have been effected. They are the legal basis of all transactions.

• Numerous Documents

Traders need to know;

1. How to complete documents
2. How to check them

• Where to get them

1. Where to send them and
2. Why they are required

 

• Documentary Standards

There are ideal documentation standards in exporting. They should be accurate, contain enough information, be relevant and fit for purpose, timely and neat.

• The Most Common Export Documents For Shipments From Nigeria To Uk

1. Quotations
2. Order Confirmations

• Invoices

1. Packing Lists
2. Certificates of Origin – C16 combined certificate of value and origin

 

• INCOTERMS 2010

For the international delivery of goods they identify;

Who organizes what?

Who pays what?

Where delivery takes place?

Where the risks and responsibilities pass?

• Payment Methods – In Order Of Security For The Exporter
• Quality/Standards Issues
• Sanitary & Phytosanitary (SPS) Issues

1. Traceability
2. Global Gap

• HACCP (Hazard Analysis & Critical Control Point)

1. Maximum Residue Level (MRL) for pesticide (how much pesticide residue a product can safely contain.

 

• Other Quality And Regulation Related Documents

1. Registration as an Exporter with NEPC
2. Clean Report of finding issued by Colbalt International Services Ltd ( Appointed Inspection Agency for Pre- Export Shipment in Nigeria,

• Nigeria Custom Services for Single Goods Declaration (SGD),

1. SON for manufactured products,
2. NAFDAC for Foods and Drugs
3. National Plant Quarantine Services for Plant materials (Phytosanitary certificate),

• Federal Produce Inspection services for Agric commodities and
• Some private assayers such as SGS

1. NACCIMA – Certificate of origin

 

Cost and Pricing

Costing is concerned with collecting and providing historical information about expenditures incurred in or attributable to a whole range of activities and products of enterprises.

The computation of the actual cost of producing a product and bringing it to market or providing a service is the core element in determining whether exporting is financially viable.

The profitability or otherwise of any business, therefore, depends largely on the various costs associated with the business as well as the set price which must not only be acceptable to the market but must equally brings appreciable returns to the exporter.

 

Basic Rules Of Pricing

1. Know your cost
2. Know your demand

• Know your competitors ( both local and foreign)

1. Know your objectives

Pricing Objective

Pricing objective is not only serving as a guide to exporter, but also a sine qua non to establishing an effective export price. Therefore, a good export price could be set up after a careful analysis of the following options:

1. To meet a specific profit goal
2. To maximize profit

• To capture a specific market share

1. To gain the largest possible market share

 

Export Costing Sheet

Product charges                   

Cost per unit………………………………..

Profit…………………………………………..

Agent commission…………………………

Ex- factory, Ex- plantation, Ex mill…

Fees, packing, inland freight

Customs broker fees……………………

Financing cost…………………………….

Other charges… e.g 0.5% NESS ……

Export packing…………………………….

Labeling / marking……………………….

Inland freight to the Port………………

Other charges                   

Specify eg Cold storage…………………

Port Charges

Handling charges………………………….

Wharfage or airport charges………….

FAS……………………………………………..

Loading charges……………………………

FOB (Lagos)…………………………………

Freight

Charges on weight………………………….

Ocean : air ……………………………………

On Deck…………….Underdeck………….

Rate………………………………………………

Transport Insurance

Coverage required

Basis………………………………………………

Rate……………………………………………….

CIF (London)………………………………….