General

Foreign trade experts are necessary! Let you understand the international trade process in the simplest way possible. The international trade export process mainly includes: quotation, ordering, payment method, stocking, packaging, inspection, customs declaration, shipping, bill of lading, presentation of documents, and foreign exchange settlement. In a few words, it means "contract goods payment shipment bill".

Process 1: Quotation

In international trade, it usually starts with inquiries and offers. Simply put, it can also be said as "inquiry and quotation", but the actual content includes: standard level, quality level, specifications and models, technical parameters, packaging method, delivery requirements, transportation method, and then the price of the purchased product.

The commonly used quotations are based on three international trade terms: FOB, CFR, and CIF.

Process 2: Orders

After both trading parties reach a quotation agreement, they usually need to sign a "Purchase Contract", which specifies the name, specifications, model, quantity, price, packaging, origin, shipping date, destination port, payment method, claims, arbitration, etc. This marks the official start of export business.

Process 3: Payment Method

There are three commonly used international trade payment methods, namely letter of credit, TT, and direct payment.

① Letter of Credit Payment Method

Letters of credit can be divided into two types: naked letters of credit and documentary letters of credit, but the most commonly used is documentary letters of credit, that is, letters of credit with specified documents. Simply put, a letter of credit is a guarantee document that guarantees the exporter to recover the payment, and it is a bank letter of credit.

② Wire transfer payment method

The TT payment method is settled in foreign exchange cash, and the customer transfers the funds to the designated foreign exchange bank account of your company. It can be divided into front and back TT, with "front and back" relative to the shipping schedule.

③ Direct payment method

Direct delivery payment between buyer and seller: usually in cash or by check. Generally, customers are required to pay at least 30% in order to make a big deal; Pay the remaining balance before or after shipment; Otherwise, the original bill of lading will not be given.

Process 4: Stock up

Stock preparation plays an important role in the entire transaction process. The technology, quantity, and delivery time must be executed one by one in accordance with the contract, especially under the payment terms of the letter of credit.

Process 5: Packaging

Many domestic enterprises do not attach importance to this point. In fact, packaging is an important component of a product, and whether it is a civilian product, commercial product, or industrial product, it must have qualifications and professional level in terms of protection and transportation marks.

Process 6: Customs clearance procedures

The customs clearance procedures are extremely cumbersome and important. If customs clearance is not successful, the transaction cannot be completed.

1. For export goods subject to statutory inspection, an export inspection certificate must be issued, which is a prerequisite for export customs declaration.

2. Some customers may request third-party agencies to conduct inspections and confirmations, or send their own inspectors to conduct inspections. We also need to contact, submit for inspection, and obtain certificates in a timely manner. Under the letter of credit payment method, this inspection confirmation letter is also an important document that needs to be submitted.

Process 7: Shipping

Whether doing FOB or CIF, it is necessary to actively contact the freight forwarder for booking. The faster the better, let the freight forwarder choose a shipping company with favorable prices, good reputation, and verified shipping schedules and voyages. We should send a written booking notice to the freight forwarder two weeks before the delivery date and confirm the packing date as soon as possible.

① Complete container (also known as full container shipment)

② Assembled container: The shipping cost is generally calculated based on the volume or weight of the exported goods.

Process 8: Transportation Insurance

Usually, the relevant matters of transportation insurance are already agreed upon in the "Procurement Contract" signed by both parties. Common insurances include sea freight transportation insurance, land and air postal cargo transportation insurance, etc. Among them, the risks covered by maritime cargo insurance clauses are divided into basic risks and additional risks:

(1) There are three basic types of insurance: FPA, WPA, and All Risks.

(2) Additional risks. There are two types of additional insurance: general additional insurance and special additional insurance.

Process 9: Bill of Lading

A bill of lading is a document signed by a Chinese shipping company for the importer to pick up and settle foreign exchange after the exporter completes export customs clearance procedures and customs clearance.

The signed bill of lading is issued in accordance with the number of copies required by the letter of credit, usually three copies. The exporter retains two copies for tax refund, and one copy is sent to the importer for pick-up and other procedures.

Process 10: Foreign Exchange Settlement

After the export goods are loaded on board, the import and export company shall correctly prepare the documents (packing list, invoice, bill of lading, export certificate of origin, export settlement) in accordance with the provisions of the letter of credit. Within the validity period of presentation specified in the letter of credit, submit the bank for negotiation and settlement of foreign exchange.