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Import initials order

1:30 so let's go ahead and get started welcome to our webinar today on import 101 training this is a basic training on import I'm Kim Taylor I'm the marketing director for Scarborough and this is Kevin Eckstrom our vice president of sales and marketing kevin is a licensed customs broker and a certified custom specialist and he will be giving our training today for those of you that have been joining us in the past year thank you we've enjoyed putting on monthly webinars in relation to global trade for the past 14 months or so in addition to our global trade webinars this year we introduced an active chat series where we focus on North American trade foreign policy and regulation changes shipment processes between Canada USA and Mexico among other things we've got a lot of special guests lined up so I hope that you stay tuned for those another thing to know about our webinars is that they're interactive so we encourage you to submit your questions via the Q&A button at the top of your screen if we can't get to all the questions today someone at Scarborough will be reaching out to you to answer your questions directly in the next few days you can start submitting your questions now if you'd like and you can also submit them anonymously if you'd like to so I'm going to tell you a little bit about Scarborough the Scarborough firs of companies acts as a global logistics partner to our clients all over the world we've been in business since 1984 and we're headquartered in the heart of Kansas part of America Kansas City Missouri we have local offices in Chicago st. Louis Des Moines Dallas New York Laredo Nuevo Laredo Mexico and Shanghai China we also have close partners that act as an extension of our team and every major port in the world we are one of the top US customs broker in the Midwest and we offer international freight forwarding domestic truck brokerage local trucking on our own asset based trucks warehousing and distribution NVOCC services which is our consolidation division large equipment and oversized cargo move NAFTA services and one of the things were most known for is our trade compliance consulting and training services so if you're interested in learning more about us don't hesitate to call call one of us or contact stressing in the next few months as I mentioned we'll have a lot of speakers coming up some of the speakers we've got joining us include our own Mexico USA borders operations manager American shipper the US Department of Transportation our Canadian Texas broker partner the import the export-import Bank of the United States among some other exports or experts in Cairo so anyway a station for more webinars and I'm going to turn it over to you Kevin all right Thank You Kim it's great to be back with everybody imports is a is is my passion so many of you that know me know I can talk about different aspects of importation all day long and here we're going to try to do it in one hour and get to all of your questions so I'm going to kind of go through this because we're we're putting this at a high level 101 these are some of the basics that folks need to know many of you asked me a great question some great questions some of them were very very specific very very specific to specific commodities trade lanes those kinds of things we will try to get to those but as Kim said if we can't then we will get in touch with you on a one-to-one basis that we have been you know past webinars for those types of questions there talk to you specifically get the details and get you the advice that you need in order to proceed so today's webinar is import 101 and we're going to kind of look at this from an import process standpoint so what I've got showing here is really an import a very vanilla import process starting with the issuance of the purchase order to your vendor overseas I'm good being manufactured by the manufacturer because then gets shipped down to the port get loaded on board a vessel a plane a train truck whatever it might be depending on the mode of transportation they leave the factory heading for the United States and then along the way we're going to talk about some of the import compliance related issues and things that you need to be thinking about along so again this is the process we're going to kind of follow and talk about some things that happen during this now we may or may lean a little bit looking at the group of people that are attending today we've got a lot of Roshan importers here so we may may lean a little bit that way for today's purposes anyways this applies to almond those that we will mention all modes of transportation today so let's start out with the issuance of a purchase order this is something that you do on a daily basis many of you are doing this multiple times a day to your overseas sender but what are you thinking about when you issue that purchase order not just the number of pieces you want and when you need them to be here for your just-in-time manufacturing or you're just in time on distribution services but things that you need to be thinking about or or one what incoterm and I am I going to use and we're going to focus a little bit about Incoterms on here in a second but Incoterms is a is a presentation that we could give all on his own and because of the intricacies I know I get training all over the country to our clients to the purchasing both the accounting both etc as it relates to Incoterms and what Incoterms are and we've got to be thinking of what mode of transportation am I going to use to get the goods from origin vendor to to the United States here along with the pricing just to accommodate that that meets that final destination goal as far as the winners are going to get here so the key in that is again communicating that and as we talk through some of this be thinking about your purchase order and does your purchase order provide your vendor with all the information that they need in order to make a successful implication for it for you at the end so let's talk quickly about Incoterms i've got on on up here of the equal terms 2010 these are terms roughly change about every ten years or so eclis the first book covers the previous book was in 2000 the platform in 2010 and eco terms tell us two things and two things in life they tell us one where does who pays for what and the second is where does risk of loss transfer that's all okay so anybody that tells you that Incoterms might say rumors out there are things that are false is a rumor or is that equal terms tell me who has to be the importer of record nope doesn't tell you who has to be the importer of record it tells you how to do has to pay for that and it tells you where risk of loss transfer happen okay so when I look at Incoterms and my recommendation on the importation side is it is always an element that equal terms don't necessarily tell us but it's control it who controls the merchandise you as the importer of record I always recommend that you take full control and that the terms that I use or that are all the F Trump so f ba FA F F will be those are the terms that I recommend utilizing or for you the importer of record because they give you maximum control they allow you to pick which freight forwarder you're going to use and they allow you to control the call because if you're if your vendor is utilizing if you just use your vendors freight forwarder odds are pricing changes your your vendor especially if it goes down your vendor is then going to make money and/or utilizes B Freight as a as a revenue string for that and that's why we recommend that you go with a freight forwarder you trust you utilize an S term and you take control of that at origin so anyways these terms legal terms are divided up as you can clearly see on here one any mode of transportation or to see an inland waterway transportation and if you look at the ll be right there for sea and waterway transportation those of you on your coat on this call that are sitting behind the cubicle nobody else can see you but I want you to raise your hand if you use difficulty for a truck shipment or an air shipment or even a domestic shipments come on raise your hand you've done it right by looking at this at this chart I would say that you're wrong and doing that sob is for sea and inland waterway transportation only because it's free on for free on board a vessel of some sort p.m. so so anyways look at some of those any transportation mode so if you wanted to use FL B maybe you probably should have used FDA instead preterit but they represent virtually the same thing is just that these Engel terms often get utilized incorrectly but that's the first place to start and you're interested in presenting ego terms to your buyer building training internally and we both know we're happy to coordinated and schedule some of that fortieth living with ego terms is number one it determines where cost transfers and and where risk of loss transfers meaning that if something bad happens to the shipment say it's an ocean shipment and the container falls off the ship whoo-hoo guys that rest and that's what the Incoterms tell you and this chart is a great guide and get my recommendation here for the nature of moving through this presentation is fov on the import side on the export side i would recommend are the sea journey so second is mode of transportation what mode of transportation am i going to select okay if I'm in Canada Mexico I'm looking probably a trust or air freight depending on when I need to get the goods to get here um if I'm shipping anywhere else around the world I'm probably I also may be looking at rail from Canada or Mexico especially for long haul bulky products really great option for that as well and if not I'm looking at ocean freight so here we're looking at a full container less than container load for ocean freight again transit time is going to be a little longer with ocean if you need to get it here quickly then you would go with the air freight but again those are the kinds of things that you need to determine at the time you issue the purchase orders when do I need to get it here because the slower it goes the less the cost because the slower goes the less it cost for them for the most part but look at those options of trucks ocean error and we all those are the four modes of transportation so next step okay resistors are purchase order what happens after that one good start to become manufactured by your vendor overseas is manufacturing the goods that is going to be shipping to you what happens after that determine again if you're using an f OB term they're contacting with with our partner overseas at the partner of the freight forwarder overseas to schedule the to schedule the shipment to be booked on board a vessel onboard plane if it's an oversea Sherman and or on trust if it's I came to our Mexico but essentially like said well what happens at that time documents are generated then there's going to generate a commercial invoice packing list certificate of origin potentially Bill of Lading these are all required entry documents as well so at the time that they're producing these documents we always recommend that they send these documents to us to to us to Scarborough to the freight forwarder to the customs broker as well when I look at one of the documents the bill of lading there's typically three types of those of lading there especially ocean freight primarily I'm talking because bill of lading is title to the goods and a person that possesses the original bills of lading actually has title to those goods there's one is the original meaning just that you have the original bill I can't into that original bill to face border and steamship company and in the take possession of my goods and typically that original bill of lading is incense to the via to you the importer until you've met your financial responsibilities or obligation from meaning that you've paid them and or you're on credit terms with them et cetera et cetera next is a telex release and @lx release that's telephoto blading the overseas vendor for you will receive an original bill of lading they will endorse the bill of lading and surrender it back to the pre forwarder overseas what that does is then that freight forwarder overseas will notify someone like myself or the corresponding agent here in the United States but the shipment has been released so what that does is it takes a little time it saves them from having us in the end extent from Finnegan on a courier over to us here in the United States of the u contender to the deck original bill of lading here the next is a way bill or a Nespresso lady typically this happens with vendors and and companies that are on terms credit time meaning that no original bill is required the minute this shipment the fill awaiting is generated the idea the person here in the united states can take possession of it so if you've got a great relationship with your vendors overseas we recommend trying to get them to at the issue label or expressible writing so that there is no original that has to have to be sent from one person one party to the next that's me in the rest to your district and if we're a new importer and it's possible for us to request a certain technical waiting what type of elevating do you recommend that we request an original or if I like the home we first come to importer first money we're a couple in a year well again you're for that kind of inquiry you're probably not going to be on terms with your credit terms with your factory or your manufacturer overseas so they're probably going to want to issue an original bill of lading if again they don't want you to just to they don't want you to just have possession of this without payment and so probably the original will be will be the way to go so in that instance they can feel the good because can be moving but you can't get the fish until you tender that original bill of lading so that's probably the situation that it would be in especially if you're a first time importer and or you don't import a lot physically so anyways that was a great question so the next what happens is again goods are loaded they leave the factory again because the notion shouldn't overseas or even in their air shipment so kids are going to look closer than a truck and they're going to get taken to the floor to go to the airport or to the Seaport to be loaded onto a container if it's less than container and or loading up leaving the factory it should have been loaded inside a full container at that point it's going to arrive at the origin point support overseas and at that point a couple things happen one is on the manifest form of a forwarding company is typically being surrendered u.s. customs here meaning we're going to transmit what was manifest information is and second is is the importer security firing on deadline is starting and that deadlines for the importer security Kagamine is 24 hours prior to the loading of the vessel my law a good one is can a supplier change importing terms prior to a new shipment with alcohol sailors permission or knowledge you know there's yeah there's nothing in customs regulations that that's really the contractual obligation between you the buyer and your seller overseas and there's nothing regulated on regulated on the custom side of things that that can prevent that and/or that that allows that so it's really outside of the purview of customs in general I wouldn't think that you would want them to again my recommendation is you as a buyer take control of the Eco turn by on an F term on the ocean by F will be use that F Prime even that me turn X work X work is a good turn to use on especially on the import side the only thing with X works is that it requires that you pay forward in the export formalities in the country now that's not bad in Europe because they don't have those types as well but that many conflicting terms and X works is very common meaning I'm going to play for the trust to pick it up at the dock deliver to the port and ship it out very common in Europe but that can be really complex in some countries and in some Latin American countries it can be very complex in in Asia as well because the cost to get the big require export declarations and export customs clearance and is you're subject to paying those fees and sometimes that inland sea and in Asia can be really expensive if that manufacturer or supplier is it's a way inland or alpha river or whatever it might be so that's where we recommend letting them handle what's on their side and enough will be let them take care of paying for scheduling on the the the shipment and paying for their there their charges at the organ location and you take it from there that's why we reppin in the F term that E is not bad just have to be very very particular with what we pick rocks the reason I don't like the term as it relates to equal terms is because we're using their freight forwarder and you as the importer who is responsible for the security violence might not know the shipment as being ten because you don't have prayer communication they're afraid forward especially itself out of Asia where they chase change freight forwarder is very very often in order to maximize their their return and for recording a profit on it on a freight piece so anyways that's why don't I commence deterrence is is you lose control you lose visibility and then you're at risk of a potential violation for the import securities finally not being on fine