Project: Export Business Strategies

Completed another successful interim assignment with a telecommunications infrastructure manufacturer. Conducted an audit of the Client’s business operations, completed a comprehensive international business plan to assist with anticipated future export goals and identified business strategies for entering and expanding into new export markets.

The Client

The Client provides telecommunications infrastructure and cyber security services.

Project Scope

• Provide an urgent solution for supplying products on Delivered Duty Paid (DDP) terms, as the Client has no legal entities in the new export markets. 

• Provide guidance to the Client concerning export licencing, customs, tax, insurance, government regulations and export / import requirements for the new proposed export supply chain solutions. 

• Highlight possible new requirements for the Client, if the UK leaves the EU without preferential trade agreements in place with the new export markets.

The Solution

Conducted a detailed audit of the company to determine how these new export requirements would impact their business operations. Documented the management challenges for exporting to their new export markets using DDP terms, the approaches required for exporting, the effective international distribution channels, the necessary export documentation and other important considerations that may impact their current business operations. 

Issued a request for shipping quotations (RFQ) to various freight forwarders specifying the individual legs of the shipments and the shipment details, including dimensions, chargeable weight and a description of the goods. The quotations received were documented within the landed cost calculations, allowing the Client to ascertain whether or not they would be able to make a profit on their products or even if their business model was sustainable.

The Results 

Identified a business strategy for entering and expanding into the new export markets. Highlighting the legal requirements, documentation requirements, product registration / conformity obligations and tax regulations. The strategy embraced alternative processes to complete customs declarations and pay taxes / duties without registering their company within the export countries.

Completed a comprehensive international business plan to assist with anticipated future export goals, assembled facts and identified constraints.

Created a detailed Export Operational Manual, which set forth specific requirements, documentation processes and end-to-end procedures for supplying the new export markets.

Recommendation

Selling on DDP sales terms may work with domestic transactions or with only some transactions within the European Union, but for other international trade it can be particularly problematic. Under the terms DDP, the Client is responsible for door to door delivery, the payment of import duties and any applicable taxes. Within the eleven Incoterm rules, DDP terms impose the maximum level of obligation on the Client. If the Client’s overseas customers still require delivered terms moving forward, it would be a good business strategy to trade under different Incoterms® Rules. Using either Delivered at Place (DAP) or Delivered at Pace Unloaded (DPU) would allow the Client to deliver the goods and ensure that their customer would always be the Importer of Record. 

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ICS Global Services Limited