Hello again.
I'm Jeff Coppersmith.
Last time we talked
about the pro forma invoice--
the document that
summarizes all the costs
of getting your product
from your back door to your buyer.
If your buyer places a formal order
based on this pro forma invoice,
while you celebrate,
your buyer in Finland goes to their bank
and opens a letter of credit promising
to deposit payment into your bank.
If you are a new exporter
or if this is a new customer,
we highly recommend
that you use a letter of credit
rather than shipping your goods
and hoping to get paid.
An irrevocable letter of credit
helps ensure
that if you comply with the terms of sale,
you will be paid.
Once you receive
the letter of credit,
send a copy of it
to your freight forwarder.
There are very specific requirements
in a letter of credit
that must be met
in order for you to get paid.
Sending a copy to your freight forwarder
before shipping your goods
will give the freight forwarder
time to check it out
and to ensure that you can meet
the shipping requirements.
The freight forwarder will also ask you
to send them the original letter of credit,
commercial invoice,
and perhaps a packing list.
It is important that you provide
this information promptly
to ensure that your product
gets to the buyer
by the agreed arrival time.
The freight forwarder will arrange
for a trucker to pick up your product,
pack it if needed,
fumigate the wooden
packing materials if necessary,
deliver to the ocean pier
or the air carrier,
file the AES documentation
in a timely manner
at least 24 hours prior to sailing,
and then process your bill of lading
with the carrier--
all in accordance with
the letter of credit instructions.
Once the goods have shipped,
the freight forwarder processes
all the required documents
that may include a certificate of origin,
insurance certificate, and notarization.
The freight forwarder
prepares all the documents
in compliance with the terms
of the letter of credit
and then presents those documents
to the U.S. bank.
That bank will examine
the documents,
and once approved,
will send you a check.
What could be easier?
You know your product
and how to sell it.
Your freight forwarder knows
how to export it economically, safely
and, most importantly, in compliance
with U.S. export laws.
You're not required to use a freight forwarder
to make international sales,
but it sure helps.
There are many ways to find
a licensed international freight forwarder
including logistics trade associations,
local chambers of commerce,
and even other exporters
you may know.
Get to know your freight forwarder;
they are an important part
of your international sales team.
Thanks for watching, and remember,
the world is open for business--
yours.