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How can we help you?
The international market is wide enough for every manufacturer, distributor, and technology provider to find new customers and multiply their revenue. But exporting to international markets can be challenging in myriad ways.
In this article, Blackthorne discusses the seven common challenges exporters face in international trade and how to overcome them.
Let’s dive in!
Here are the seven most common challenges you may face as an exporter and the best practices to overcome them:
Every category of goods must meet specific export requirements before leaving the country of origin. The most critical requirements to comply with include:
Dual-use goods and restricted products often require licences, approvals, or permits before shipping. The licences prove compliance with national laws, safety standards, and international trade laws, allowing you to ship the goods across borders legally.
Before applying for a licence, you must understand:
Some licences expire after a specific period, or once a certain volume of products is attained. That means you must track expiry dates and renew accordingly.
Technical requirements are rarely published in a centrally accessible location. And you may discover that a product requires additional certifications, labelling, testing, or registration before import approval, just when you thought it was ready for shipping.
Also, different products require different licences, and the same product may need multiple approvals, based on the destination country’s import laws.
Have a checklist of all licensing requirements and ensure you meet all of them before shipping.
And if you lack visibility into the status of your licence application, contacting the licensing authorities may help plan your delivery.
Calculating the landed cost for your shipment has never been easy. Duty rates vary by destination and product categories. Preferential trade agreements may apply, and in the event of classification errors, you must reassess the total cost.
You must agree on who pays duties and taxes (buyer or seller) and factor that when developing pricing and contractual terms. Otherwise, your export transaction would be cost-ineffective.
HS codes are specific. Similar products may fall under different codes, attracting different duty rates, licensing requirements, and customs controls.
As an exporter, you can only classify goods based on commercial descriptions rather than customs definitions.
The customs authorities at the destination country may interpret the classification differently, leaving no room for correction without additional costs.
You may want to learn more about HS codes, including how to classify equipment and classification best practices from the customs classification codes article.
You want goods to reach the customer safely, on time, and at a reasonable cost. But you have limited control over various parts of the transportation process.
Freight forwarders, carriers, ports, warehouses, and local delivery providers influence logistics efficiency.
The common logistics management challenges include:
Factors such as fuel prices, route availability, carrier capacity, and geopolitical tension influence freight rates. As a result, the shipping cost factored in your quotation may vary from the actual transportation cost.
And if you are running long-term contracts, absorbing the difference may thin your profit margins.
The most common causes of delayed delivery include:
Delays may be out of your control. But if the logistics provider fails to communicate or communicates late, you may be unable to update your customers or adjust internal operations accordingly.
In such cases, delayed shipments can lead to:
Modern supply chains are interconnected, which means a disruption at any point of the supply chain can be costly across multiple countries and industries.
Major supply chain disruptions occur as a result of:
A good example is the recent disruption of major shipping routes in the Red Sea and surrounding waterways. Security concerns have forced many carriers to reroute vessels around the Cape of Good Hope instead of the shorter Suez Canal route.
Such detours have raised fuel consumption, increased transit times, and contributed to higher freight rates across the global supply chain.
Since you have minimal control over logistics management, focus on selecting a first-class logistics provider, especially one with experience in your industry.
A profitable export transaction relies heavily on accurate cost estimation, cash flow management, and sticking within your budget. But it can be challenging to predict expenses and effectively manage them.
These financial planning uncertainties stem from:
Also, some payment methods take several days for funds to reflect. Such challenges make it difficult to predict your profitability.
Investing in cost-tracking tools helps predict and plan for major expenses in your export transaction. Also, partnering with a financially accredited international trade expert can help in maximising your profits.
Different countries have different governing legal systems, which can be hard to navigate. Beyond the licensing and approval requirements, you need to understand how the importing country interprets and judges trade issues.
That raises uncertainties in three main areas:
Since non-compliance is the leading trigger for legal action, it’s essential to meet all export and import requirements for a hassle-free customs clearance.
You can check out this guideline on the customs clearance process for compliance best practices at every step.
While some countries encourage imports, others impose restrictive regulations to protect local manufacturers and limit unfair competition.
So, before you choose a specific foreign market, you must understand how accessible it is. This involves analysing the tariff and non-tariff barriers:
Trade barriers make a market costly and commercially unviable.
Hence, conducting a feasibility analysis to understand the demand and market entry requirements for your products is critical.
Note: If you are seeking to export data centre equipment, we analysed and ranked the top five IOR-friendly countries to consider when scaling internationally.
Local regulations vary from one country to another. That means when exporting the same product to different countries, you must refer to the customs clearance instructions for every country.
Some countries would require the customs documentation in their local language. That means you may need a customs broker in the importing country (conversant with the local language) to handle administrative procedures.
Multiple service providers, including freight forwarders, carriers, and warehouse managers, handle your shipment. While you are indirectly involved in the shipping process, you are accountable for the shipment.
You don’t want to be unsettled from the time your shipment leaves for the destination country till it arrives.
So before you partner with a freight forwarder or logistics provider, you need to understand how they handle the following risks:
International trade can be as challenging as we have discussed. However, it offers luxurious benefits you can’t afford to overlook.
And when it gets a little heavy for you to handle, delegation lightens the burden.
We have talked about freight forwarders, carriers, customs brokers, and customs authorities. All these are professionals that come in handy when handling administrative procedures and logistics operations.
With them, you (seller) or the buyer must act as the importer of record and be responsible for import compliance in the destination country.
But what if you or the buyer wanted little to no involvement when shipping your products internationally? Because sometimes you are unavailable to carry out all the seller responsibilities, or are unwilling to act as the importer of record.
And sometimes, you are exporting a product whose requirements are too complex for you to meet. Then you wonder how you can meet all the requirements without risking noncompliance and unnecessary expenses.
In the above-mentioned cases, engaging a third-party importer of record (IOR) such as Blackthorne IT is essential.
Every export transaction requires an importer of record at the destination country to account for the importation of your products.
And if you are yet to establish a local presence in the destination country, you can partner with an established third-party IOR to act on your behalf.
By acting on your behalf, the third-party IOR is responsible for:
All you need to do is be available to provide any information that your IOR service provider might need, and your shipment will be delivered to your customers.
Note: Third-party IOR services differ from one entity to another. Hence, it is important to understand the scope of services when partnering with an IOR for accountability.
The complexities of exporting IT equipment require a dedicated compliance expert who understands import and export licensing in depth.
Also, with sensitive technology like data centre equipment, the last challenge you want to face is navigating last-mile delivery in a foreign country.
At Blackthorne IT, we have spent years crafting a solution that solves IOR, EOR, freight forwarding, and export licensing challenges in international trade.
This solution is precisely for technology exporters seeking convenience, safety, compliance, and on-time delivery of IT equipment. That’s regardless of your import destination, as we have established our local presence in over 225 import destinations.
Three main reasons you don’t need to look any further:
And once your equipment is on-site, our IT specialists are available virtually and physically to install and provide ongoing maintenance and support.
If that sounds like the kind of solution you are looking for, why not hit that call button or email us at sales@blackthorneit.com?
We are always happy to support your expansion to the global market.
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