By Joe Robinson

It is now easier than ever for companies to reach potential export customers. By doing nothing more than hosting a web page and attending a few trade shows, even the smallest companies are reaching nearly as many potential international customers as only large multinational corporations could once afford to reach.

Even though it may be easier to locate potential international customers, that doesn’t automatically translate into a profitable, growing export business. You wouldn’t just hop in a car in a strange town and expect to find your destination without directions. Likewise, a company will quickly get lost in the world of exporting if it doesn’t know where it’s going and how to get there.

Companies need to create a MAP—a Marketing Action Plan—to ensure they are moving down the road to increased sales and profitability. Fortunately, creating an export MAP doesn’t have to be difficult or expensive. A company can ask and answer some simple questions to create their export MAP.

Where are you now in your export program?
For first-time exporters as well as seasoned export pros who want to enter a new market, this question asks you to look at the infrastructure of your company that you can utilize to conduct business overseas.

You can leverage these resources within the company by utilizing outside support such as professional contacts, banks, consultants, CPA firms, and government organizations such as the U.S. Department of Commerce, state economic development agencies, and the U.S. Small Business Administration. The time you spend contacting these support organizations is definitely time well spent.

What are your short and long-term export targets? 
To effectively target export markets, you need to locate markets that will generate the most return for your export efforts. In other words, you should subordinate those industry sectors and countries that require high maintenance and little return to those locations and activities that generate the most revenue for the company.

You can ascertain the best markets by doing a search in the National Trade Data Bank (NTDB), a relatively inexpensive subscription provided by the U.S. Department of Commerce. The NTDB has 90,000 documents, including Country Commercial Guides, Industry Sector Analysis, and “Best Prospects.”

The consolidated export figures found in the PIERS (Port Import Export Reporting Service) reports are another good source for determining the best markets for your exports. The PIERS reports are somewhat expensive; however, a careful extrapolation of these figures can reveal a lot about where you should be focusing your export activities.

What difficulties do you anticipate in achieving your export goals?
By defining the difficulties that need to be overcome, you will be able to concentrate your efforts where they are needed the most. For example, if the best way to sell your product in a target-rich country is through representation, then you need to carefully find, appoint and motivate a local rep or agent.

If your company doesn’t have someone knowledgeable about export regulations and documentation, then you should provide training for your staff. There are good workshops available as well as export shipping software that can make this job accurate and efficient for even the smallest of companies as well as multinational global exporters.

What resources do you require to meet your export targets?
Does your company have adequate production capacity to meet export demands? Does your product require engineering modification for overseas applications? Do you have to provide metric dimensions on your products? Does your product require literature, instruction manuals or labeling in a foreign language? Is your company willing to train overseas representatives to effectively promote and use your products?

Be sure to consider not only the resource needs of your export department, but also other supporting departments in the company such as production, engineering, accounting, and advertising. Answers and information generated from these types of questions will produce an outline that clearly indicates where a company should spend its efforts and resources to grow exports.

By asking these questions, you can help lead your company down the path toward success in growing your global business.

Mr. Robinson's bio.

Understanding U.S. Principal 
Party in Interest (Part 2)

By Catherine J. Petersen

This is the second of four articles that will discuss the definition and use of the U.S. Principal Party in Interest (USPPI) and provide real-life case studies (with the names changed) of which firm is legally the USPPI.

As I discussed in my first article in this series, one of the biggest changes to the Shipper’s Export Declaration (SED) required on April 1, 2001, involves the change from “exporter” to “USPPI.”

Rather than wanting the name of the exporter on the new SED, the U.S. Census Bureau wants to know which person in the U.S. receives the primary benefits, monetary or otherwise, of the export transactions. Generally that person is the U.S. seller, manufacturer, order party or foreign entity.

Even if your company doesn’t sell directly to any international customers, you may have domestic clients who do turn around and export your goods. If you know that your product(s) will eventually be shipped internationally—or even if you just suspect that they might—you have certain responsibilities.

First, you may have a discussion with your domestic customer’s freight forwarder about who is the USPPI in a transaction. In the case study below, while the supplier is part of the international transaction, they are not the USPPI and will not be listed on the SED.

Second, even if you are not the USPPI, you can be held legally liable if your goods wind up in a country or in the hands of a company or individual that the U.S. government has banned from conducting business with a U.S. company. To protect your interests, you should check the Federal Register listings of parties with whom you are not to conduct business—either directly or indirectly.

1. Denied Persons List
2. Entity List
3. Specially Designated Nationals and Specially Designated Terrorists
4. Debarred Parties
5. General Orders in Supplement No. 1 to part 736, Export Administration Regulations

Case Study

Seller: Monterrey Fish Supply & Trading Co.
            14555 Monterrey Bay Road
            Monterrey, CA 98888

Supplier: John's Fishing Co.
                Rural Route 5
                Brainerd, MN 55555

John's Fishing Co. sold 30 Metric Tons of frozen fish to Monterrey Fish Supply & Trading Co. ExW Brainerd, MN. Monterrey Fish arranged with the ocean carrier to delivery an empty 40-foot refrigerated container to John's warehouse in Minnesota. All transportation charges were "collect" for the account of Monterrey.

Monterrey will be the shipper on the international ocean bill of lading and they will issue the international commercial invoice.

USPPI in this transaction: Monterrey Fish Supply & Trading Co. Monterrey Fish Supply & Trading Co. will be the USPPI and the exporter, because Monterrey Fish Supply made the international sale and is getting the most benefit from the sale.

Exporter in this transaction: Monterrey Fish Supply & Trading Co. Monterrey Fish Supply & Trading Co. will be the exporter because it arranged and paid for all the transportation with the ocean carrier; it is in control of the export.

Although John’s Fishing Co. is not on the Shipper’s Export Declaration, they are a party to an international transaction.

Ms. Petersen's bio.

Census putting wraps on AES requirements for controlled exports

Updated 11:00 a.m. ET, Thu Feb 21, 2002

BY R.G. EDMONSON
JoC ONLINE

The Census Bureau is preparing to publish for comment rules that would require companies to use the Automated Export System (AES) for exporting munitions or technologically- sensitive items.

The proposed rules will be finished within a month, according to C. Harvey Monk, chief of the Census foreign trade division.

He said the rules will coincide with the effective date of a new law that requires exporters to use AES for items on the State Department munitions list, and Commerce Department list of controlled items. A congressional oversight committee certified AES' security and successful implementation last July, which started a 270-day countdown the law going into effect.

Monk also said the agency is seeking comments on changes to AES data collection before a Feb. 28 deadline. If approved by the Office of Management and Budget, the new data elements would be used to certify military shipments.

The new data collection also would require paper Shippers Export Declarations to include the company's tax identification number. AES users already supply the tax number.

Despite the bureau's efforts to get exporters to use AES, Monk said 15% to 17% of the export data that Census receive each month are in paper form. He said the bureau recently provided software for paper users that allows them to process exports off-line, then file them in batches to AES through the system's Internet portal.

"It's still a challenge," Monk said. Export volume was down last year, but overall export filings were up, he said. "We're getting better reporting."

Republished from the February 21, 2002, issue of the Journal of Commerce Online.