In our tough economic times, exporting your goods can help ensure that your company survives, and even thrives. However, exporting is fraught with complexities.
In this story, our highly experienced operations manager Thinus Ferreira gives you some key tips for jumping over the hurdles. All the methods he describes have been tried and tested over time in Dolphin Bay’s own exporting and importing processes.
Planning is everything, and would-be-exporters need to do substantial preparation, says Thinus. “How long will it take? What documentation will the other country need? What is the best port to receive your goods? You need to know all of this.”
The first mistake is to assume that other counties have similar processes to those in South Africa. “This is not the case,” Thinus says. “In South Africa, goods might be delayed by two or three days at the ports of Durban or Port Elizabeth, if the weather is bad. If some African countries, the delay might be up to 20 days, due to inefficiency. This needs to be taken into consideration.
“Delays are the biggest challenge and some, such as delays due to bad weather, are inevitable. Again, the answer is planning.”
It is crucial to choose the right freight forwarder. This is the company that will deal with almost every aspect of transporting your goods internationally, from clearing them through South African customs to their delivery to the port of destination and, finally, to your customer. “Make sure your freight forward is on the ball, innovative, and know the international trends,” says Thinus. “And make sure they understand your needs. At Dolphin Bay, we invest considerable time and effort in building long-term relationships with all our service providers, including the freight-forwarding company we’re dealing with, as they need to understand our business pressures.
“Investigate the freight-forwarding company’s reputation, their rates and their infrastructure, from their warehousing to whether they do their own trucking or not. Some exporters outsource the transport of goods once they are within the country of destination. If so, make sure they’re connecting with reputable, experienced partners on the other side.”
Before you export, make sure you understand the “Imco” terms that govern the process world-wide. These terms specify, for example, which party pays for each portion of the voyage, and who pays insurance for each portion. You should also know the international rules and regulations governing exports and imports. These include “tariff headings”, the international codes for different types of goods, which determine the duties and tax payable, and the restrictions. “You also need to know all your shipping terms, such as the bill of lading - like the waybill used by courier companies, but in this case for sea freight. Your customer needs the original bill of lading, to clear the cargo.”
A good freight forwarder can advise you on all the applicable rules and regulations, both internationally and in each country, as well as how international trends might slow the exporting down. Such trends include the Chinese New Year, which results in little transportation of goods in and out of China during this time, and the international high season for exports, which is more expensive.
Dolphin Bay uses our own third parties, rather than our own freight forwarder, for border crossings by road. “Don’t do this unless you have built up considerable experience first,” advises Thinus.
To minimise risk in exporting your goods, play by the rules and follow the right steps. Like Dolphin Bay has done, ensure that your part of the insurance is done by a highly reputable insurance house in your country. “The biggest risk is not being paid by your customer,” says Thinus. “Spend time getting to know your customer very well, before exporting to them.
Thinus’s final tip is to integration your sales, operations and finance departments when planning and managing exports and imports. “If our sales people know that our sales will increase, our operations team must plan for this, and the supply team needs to ensure you have the materials in time. All of this affects the company’s finance.”
Thinus is a “fantastic asset to our business”, concludes Bertus. “His considerable experience and capability make him well able to manage our operations – an extremely challenging job - very smoothly.
“A final word from me is to make sure that you hire the right person to manage your operations, exports included.”