1st Edition

Mastering the Business of Global Trade Negotiating Competitive Advantage Contractual Best Practices, Incoterms, and Leveraging Supply Chain Options

By Thomas A. Cook Copyright 2014
    405 Pages 102 B/W Illustrations
    by CRC Press

    Much of your company’s success in global trade will be determined by how well you manage contracts and agreements for sale or purchase. Mastering the Business of Global Trade: Negotiating Competitive Advantage Contractual Best Practices, Incoterms, and Leveraging Supply Chain Options explains the key elements any international business person must know, but more importantly, it also describes how to use negotiation skills, leveraged options, and Incoterms to extract the maximum benefits from your supply chain.

    At the end of the day, landed costs determine pricing and profits. As such, the book clearly explains how landed cost modeling works and how you can use these business models to leverage supply chain options. Illustrating how Inco terms impact compliance and risk, it details options to help you reduce your exposure to risk as well as best practices to help you steer clear of compliance issues that can cause costly delays.

    Managing global supply chains is about constantly striving for efficiency, driving down costs, and increasing profits. With this book, you will not only learn how to negotiate better contracts, but you will also learn how to manage relationships with freight forwarders and customhouse brokers in a manner that will help you get the most value from your service agreements.

    The book establishes a very simple, yet comprehensive, roadmap that both the neophyte and the more experienced global supply chain executive can easily follow and master. By following the time-proven advice and roadmap detailed in these pages, you will learn that it is possible to engage in more deals and increase your returns, while reducing your overall risk exposure.

    This book is part of  The Global Warrior series.

    The Role of Contracts in Global Trade
    Contracts in Global Trade
    Case Study: When Contracts (or Lack of) Fail
         Transparency of What Both Parties Are Trying to Accomplish
    Trust
    Capabilities that Can Be Delivered
    Responsible Structure
    Managing International Contracts: Best Practices and Necessary Deliverables
    Third-Party Options
         Consultants
         Law Firms

    Freight, Logistics, and the Global Supply Chain
    Freight, Logistics, and the Global Supply Chain
    Managing Incoterm Options with Freight Forwarders, Customhouse Brokers, and Transportation Intermediaries
         Advanced Knowledge of Incoterms
         Global Reach through Office or Agency Network for Local Incoterms Knowledge and Applications
         Global Resources to Execute Various Incoterms Options

    Incoterms: Foundation of Global Trade
    Functional Definition and Use
         Terms of Sale
         Terms of Payment
         How Freight Is Handled
         How Insurance and Risk Are Managed
         When and How Title or Ownership Is Transferred
         How and When Revenue Gets Recognized
         Who Is Responsible for Trade Compliance Issues
         Legal Jurisdiction
         How Disputes Are Settled
         How Company Tax Issues (IRS or Equivalent) Are Mitigated
         Packaging, Marking, and Labeling
         Intellectual Property Rights
    What We Need to Know about Incoterms to Obtain Better Commercial Advantages
         Background and History
    Incoterm Member Countries
         The UN Convention on Contracts for the International Sale of Goods
         Issues in World Governance
         Governmental Profiles
              World Customs Organization (WCO)
              Organization for the Prohibition of Chemical Weapons (OPCW)
              Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES)
              Montreal Protocol
              Organisation for Economic Co-operation and Development (OECD)
              Wassenaar Arrangement
    The Lacey Act
    Nuclear Non-Proliferation Treaty (NPT)
    Australian Quarantine and Inspection Service (AQIS) Laws
         Items You Must Declare When Importing or Traveling or Shipping to Australia
    Global Governance Guidelines for Incoterms
    What We Need to Know about Incoterms 2010
    Rules for Any Modes of Transport
    Rules for Sea and Inland Waterway Transport
    2000 versus 2010
         Placing the Book into Two Sections
         FOB On-Board
         Domestic Use
         Security-Related Clearances and Information Are Addressed
         Terminal Handling Charges Responsibility Clearly Defined
         "Goods Sold in Transit" Transactions Addressed
         Ocean Freight and FOB Responsibilities of Seller and Buyer Redefined
         Cargo Insurance Better Defined
         Specific Incoterms Nuance Changes
    Best Practices: Making the Right Choices
         10 Action Steps
         Engage Senior Management
         Establish a Point Person and a Team Approach
         Learn Incoterms and Establish an Incoterms Guru!
         Integrate Incoterms in Every Corner of the Organization
         Partner with Providers
         Plan the Best Options and Leverage Sales and Purchases
         Foreign Inland Freight Can Be a Nondutiable Charge
         Educate Suppliers, Customers, and Vendors
         Do Not Operate in a Vacuum
         Develop and Use Technology Options
         Develop Competitor-Friendly Options; Network
         Networking
         Develop Resources
              Key U.S. and Globally Based Associations
              Global Examples
              Key Periodicals
    Senior Management: Executing a Best Practice Strategy
         Incoterms Management
              Develop ITM into Your Business Processes
              Learn the Basics of Incoterms
              Develop Resources for Incoterms Expertise
              Understand How Incoterms Decisions Impact the Global Supply Chain and Break Down Fiefdoms
              Create Integration Management into Incoterms Decision-Making
              Learn Leverage Options in General, and Then Apply to the Specific Scenarios in Your Global Supply Chain Metrics
              Establish Service Provider, Supplier, Vendor, and Other Business Relationship Communications and Standard Operating Procedures
              Integrate Technology into the Incoterms Management Process
              Create Policy Guidelines for Incoterms Options and Trade Compliance Management. For Public Companies, SOX Incoterms Management Is Critical
              Engage Incoterms Lobbying to Increase and Enhance Change to Your Company’s Benefit
    Government Security Programs
         C-TPAT and AEO
         United States: C-TPAT
         Europe: AEO
              The AEO Guidelines
         Japan
         Canada Partners in Protection

    Landed Cost Modeling
    Definition of Landed Costs
    Cost to Export from the Originating Country: $$$
    Inland Freight from Origin to Outbound Gateway: $$
    Foreign Freight from Gateway to Gateway: $$$$
    Marine Cargo Insurance: $
    Warehousing: $
    Inland Freight from Inbound Gateway to the Final Destination: $$$
    Customs Clearance: $$
         Required Documents in Mexico
    Import Licenses, Permits, and Registrations: $$
    Bottom of Form
         Preshipment Inspection
    Ancillary Freight Charges, Demurrage, Etc.: $
    Duties, Taxes, VAT, or GST, Etc., … $$$$
    Government Inspection Requirements $
    Handling and Related Services … $$
    Case Studies
         Landed Duty Paid: Import Case Study #1
         Landed Cost CIF: Case Study #2
         Reducing Costs: Case Study #3
         Small U.S. Exporter, Changing the Incoterms Choice: Case Study #4
         Chinese Exports to the United States: Case Study #5
         Trade Compliance Issue: Case Study #6
         German Optics Company, the DDP Advantage: Case Study #7

    Global Regulation and Compliance Management
    Overview
    Trade Compliance and Regulation Impact Incoterm Options
         Exports
              U.S. Government Resources for AES
         North American Free Trade Agreement (NAFTA)
              Pedimento Form
    United States Foreign Trade Regulations
         Foreign Trade Regulations 15 CFR Part 30, Incoterms, and Routed Transactions
    Asia Reviewed
         Importing into China
              General Documents
              Specific Documentary Requirements
    Australia
    Korea
    Europe
         France
    Examples of Value-Added Taxes
         Canada, United Kingdom, Australia, New Zealand, Europe
         Canada
         United Kingdom
         Australia
         New Zealand
         Europe
    German Export Control
         Objectives of Export Control
         International Export Control Bodies
         Licensing Procedure
    Developing Nation: Importing into Nigeria
         Import Guidelines
    Latin America
         Brazil
         Mexico
         Argentina
    Imports
         Importing into the United States
              Basic Guidelines for Importing into the United States
              Arrival of Goods
              Entry of Goods
              Other Types of Entry
         Customs (CBP) Examination of Goods
    Importer’s Security Filing and Incoterms in the United States
    Powers of Attorney and Incoterms
         Customs Powers of Attorney
         Revocation of a Power of Attorney
    Customs Bonds
         Types of Bonds
         Amount of Bond
         Breach of Bond
    Managing INCO Trade Compliance Issues: USPPI and Ultimate Consignee
         USPPI: United States Principal Party In Interest
         Exporter of Record Replaced by U.S. Principal in Interest (USPPI)
         Responsibility of USPPI and Forwarding Agent in a Normal Export Transaction
         Responsibility of USPPI and Forwarding Agent in a Routed Export Transaction
         Ultimate Consignee
    Best Practices: Making the Right Choices
         Ten Action Steps
         Senior Management Engaged and Executive Best Practices in Incoterms
         Establish a Point Person and a Team Approach
         Learn Incoterms and Establish an Incoterms Guru
         Integrate Incoterms in Every Corner of the Organization
         Partner with Providers
         Plan the Best Options and Leverage Sales and Purchases
         Foreign Inland Freight Can Be a Non-Dutiable Charge
         Educate Suppliers, Customers, and Vendors!
         Do not operate in a vacuum!
         Develop and Utilize Technology Options!
         Develop competitor friendly options … Network!
         Networking
         Develop Resources
              Key U.S. and Globally Based Associations
              Global Examples
              Key Periodicals

    Education, Training, and Skill Set Development
    Internal Training Options: Connectivity in Your Company
    Senior Management Overview
         Middle Management Oversight
         Operational Level Functionality
         Training Skill Set Agenda

    Risk Management and Insurance Controls
    Risk Management in the Global Supply Chain: A 10-Step Primer
         Overview
         Ensure Senior Management Commitment
         Establish a Risk Management Focus
         Complete a Global Risk Management Assessment and Benchmarking
         Identify the Three Key Risk Providers
         Profile the Major Areas of Risk and Establish Risk Strategies
         Decide Risk Retentions and Transference Policies
         Identify the Benefits of Loss Control Management
         Establish Trade Compliance Protocols
         Use Technology in Risk Mitigation
         Training Is a Work-in-Process
    Risk Management Case Study
         Terms of Sale versus Terms of Payment
         Marine Cargo Insurance and Incoterms
    Transfer of Title and Revenue Recognition
         Transfer of Title or Ownership
         Revenue Recognition
              Evidence of Arrangement
              Delivery or Services Rendered
              Price Is Fixed or Determinable
              Collectability Is Reasonably Assured
              Sale of Goods
    Incoterms and Sarbanes–Oxley
         Tax Considerations
         Additional Tax Issues
         Ad Valorem
              Value-added (2)
         Supplemental Taxes
         Summary
    IPR, Trademarks, Patents, and Other Intellectual Property Rights
         Carnets and Incoterms
         Carnet Use

    Bonded Warehouses and Foreign Trade Zones
    Bonded Warehouses
         General Provisions in Vietnam for Bonded Warehouses
         India
         United Kingdom
              Definition of a Customs Warehouse
         United States
              What Is a U.S. Customs Bonded Warehouse?
              What Are Its Advantages?
         Mexico
    Packing, Marking, and Labeling

    Global Supply Chain: Best Practices
    Senior Management: Executing a Best Practice Strategy
         Incoterms Management
              Develop ITM into Your Business Processes
              Learn the Basics of Incoterms
              Develop Resources for Incoterms Expertise
              Understand How Incoterms Decisions Impact the Global Supply Chain and Break Down Fiefdoms
              Create Integration Management into Incoterms Decision-Making
              Learn Leverage Options in General, and Then Apply to the Specific Scenarios in Your Global Supply Chain Metrics
              Establish Service Provider, Supplier, Vendor, and Other Business Relationship Communications and Standard Operating Procedures
              Integrate Technology into the Incoterms Management Process
              Create Policy Guidelines for Incoterms Options and Trade Compliance Management. For Public Companies, SOX Incoterms Management Is Critical
              Engage Incoterms Lobbying to Increase and Enhance Change to Your Company’s Benefit
    Government Security Programs
         C-TPAT and AEO
         United States: C-TPAT
         Europe: AEO
              The AEO Guidelines
         Japan
         Canada Partners in Protection

    Summary
    Appendix
         Copyright and Trademark Policy
         Trademarks
         Copyright
         Glossary
         U.S. Trade Terms
         U.S. Free Trade Agreements
              Why Should You Care About Free Trade Agreements (FTAs)?
              What is An FTA Negotiated by the United States?
              What Types of Behaviors Are Addressed in a U.S. FTA?
              With Which Countries Does the United States Have An FTA?
              U.S. FTA Partner Countries
              How Can U.S. Companies Identify Tariffs On Exports to FTA Partner Countries?
         Ultimate Consignee Verification
         Overview
         Objective
         Definition
         Verification Questions as Affirmation of Ultimate Consignee Designation
         U.S. Customs and Border Protection Office of Strategic Trade Regulatory Audit Division Treatment of Ultimate Consignee Transactions in a Focused Assessment
         Introduction
         Background
         Procedures
              Consolidated Entries with Multiple Ultimate Consignees
              Unsolicited Merchandise on Entries Listing a Company as UC
              Entries Initiated by the UC but Another Entity is IOR
         Routed Freight Transactions
              Routed and Non-Routed Export Transactions
         Tax Rates
              EU Countries
              Non-EU Countries
              VAT Registered
    Index

    Biography

    Thomas A. Cook is a seasoned logistics, international trade and supply chain executive. Tom is the author of more than 300 articles and 12 published books on global trade and related subjects. Tom’s reach into global corporations is deep, with extensive experience in guiding companies on supply chain management and Incoterms. Tom's work is internationally recognized with a global reach spanning six continents.

    Tom is Managing Director of Blue Tiger International in New York, a prominent and exclusive management consulting firm specializing in customized supply chain and management solutions. (www.bluetigerintl.com).

    Tom’s bestseller, Managing Global Supply Chains (Auerbach2008) … is considered by many to be one of the most comprehensive guides to best practices in global supply chain management in both the academic and commercial world. It’s focus on trade compliance, security and dealing with Terrorism, became the ‘go to’ reference guide for trade practitioners, following the Events of 9/11. Tom is available for inquiries at [email protected] or [email protected].