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Sample Process Flow of Export

Sample Process Flow of Export:

Many newbies in the International Trade arena want to know about Export. In this article, we will discuss a sample process flow of Export for them. It will help new professionals, including new bankers working with commercial issues, understand the basic Export process.

 

Let us discuss first what Export is?

Export is the process of selling goods to other nation or country. Selling within the country is also considered as an Export. However, we call this process a “Deem export” or “Local export”. Local export is much an easier process than foreign Export or Final Export.

We will cover here a sample process of “Final export” or “Export”. One thing you should keep in mind that this sample process is a Basic process. So, there may be some differences in a real-life scenario.

Don’t be disheartened. We will also focus on Local Export in a later section of this article.

 

Parties Involved in Export:

The actual process of the Final Export is more complex than this one. However, this model will give some insight for beginners or newbies in the foreign exchange and international business. In this model, we will discuss the process involving the following six parties.

Freight Forwarder

Exporter

Exporter's bank

Customs Broker

Importer

Importer's Bank

 

Items involved:

All export involves sell of goods, services or performance. In this model of final export, we have considered sea shipment of goods and termed those goods as Ocean Merchandise. Including those Ocean Merchandise, three items are involved in a final export.

Ocean Merchandise

Documents

Money

 

Steps in the Export Process Flow:

A basic foreign export or final export will involve the following ten steps. Look at the flow chart of this process and follow the step numbers marked there for clear understanding.


1. Exporter fills out forms at his bank

2. Exporter sends goods and documents to a freight forwarder

3. Freight forwarder sends merchandise and gets bill of lading signed by carrier

4. Freight forwarder sends documents to the exporter with Bill of Export from Customs

5. Exporter sends documents to his bank

6. Bank sends them to importer's bank

7. Importer pays or accepts; gets documents

8. Importer gives documents to the carrier; gets merchandise

9. Importer's bank transmits funds

10. Exporter's bank credits the exporter’s accounts.



Sample Process Flow of Local Export:

We already have said that the process of Local Export is much easier. Now that you have seen and understood the process flow of Export or final Export, you will find the process of Local Export simpler.


Parties Involved in Local Export:

The number of parties involved in a Local export is less than the final export. Only four parties are involved in a local export. Those parties are -

Exporter

Exporter's bank

Importer

Importer's Bank

 

Items involved:

Items involved in a Local export are just the same as the final export. Here we will call the goods and services under the export as only “Merchandise”. The items involved in a local export process are as follows.

Merchandise

Documents

Money

 

Steps in the Local export Process Flow:

More or less, all the steps are also very similar to the final export process. This process does not involve a forwarder and customs authority. Steps in a basic process of local export may be as follows.


1. Exporter Manufactures/Processes/Procure merchandise and prepare documents

2. Exporter sends goods/merchandise and Bill of Exchange and Delivery Challan to the importer

3. Importer accepts the Bill of Exchange and Delivery Challan and sends it back to the exporter

4. Exporter sends documents including Bill of Exchange and Delivery Challan to his bank

5. Bank sends them to importer's bank

6. Importer pays or accepts; gets documents

7. Importer's bank transmits funds

8. Exporter's bank credits the exporter’s accounts.



Introduction of the terms used in this article:


Who is a Freight Forwarder?

A freight forwarder is a party or organization that takes responsibility for the transportation of goods between one destination and another. 

Freight forwarding companies work as intermediaries between the shipper (exporter) and the shipping lines or carriers, or transport service providers. They are experts in arranging the complete process of shipment for shippers/exporters. Freight forwarders maintain liaisons with various shipping lines or carriers. They negotiate the cost of transportation and decide the fastest route, cheap but reliable transport for the exporter.

 

Who is an Exporter?

An exporter is a person or organization who sells goods or services to the buyer of another nation or country. Seller to goods or services within the country, also sometimes called exporter but with a prefix “local” or “deem”.

 

Who is a Customs Broker?

Customs Broker is the person or organization which takes responsibility for completing the customs (with revenue department of government at the port) formalities for Export or import.

 

Who is an Importer?

An importer is a person or organization who buys goods or services from another nation or country. Sometimes, the buyer of goods or services within the country is called a local importer or deem importer.

 

What is meant by Documents?

Documents mean all the papers and documents relating to export. Those documents are necessary for releasing the imported goods or are important for importers for further business purposes. The most common export-import documents are as follows.


  • Bill of Exchange 
  • Export L/C
  • Commercial Invoice
  • Bill of Lading/Truck Receipt/Airway Bill
  • Packing List
  • Insurance Cover Note
  • Certificate of Origin
  • All other documents/papers that are specified in the Export L/C 


What is meant by Exporter's bank?

Exporter’s bank is the bank that acts on behalf of the exporter. These banks are usually AD (Authorized Dealer) banks. Usually, the exporter’s bank is situated in the country of the exporter.

 

What is meant by Importer's Bank?

Importer’s bank is a bank branch in the country of the importer that acts on behalf of the importer. Importer’s Bank usually is an Authorized Dealer bank.


Happy learning!


If you are new in this sector and enthusiast to learn about Foreign Exchange and International Business, you may like our page ForeignExchange for Beginners.

Read more on foreign exchange and international business on fahmidrj.blogspot.com.

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