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Flashcards in Import/Export Deck (7)
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1

Export process

exporter does not want to take the risk from the whole export process. Therefore, the transactions often ends at port (importing or exporting countries)
- inscurance cost
- logistic cost

2

What are INCOTERMS

define how costs, risks and responsibilities are divided between the seller & buyer
- determine at which point the responsibilities are switching

what they dont do:
- determine when ownership is transferred
- not a contract
- only deal with tangible goods

3

Letters of credit

assures:
-Exporter of payment
-Importer of product

--> costs 5-8% of transaction cost
--> when trust is not earned using letters of credit is benefitial , after trust is earned you dont need them

4

Export Documents

Documents required for export to foreign countries/ Individuals:
- License needed or not (if not, proof that no license is needed)
- What product
- who is product being shiped
- which country and final receiver

5

Factors that can lead to price escalation for exporters

- tariffs
- packaging
-inscurance
- security (Export/Import compliance)
- transportation (depends on from where to where)

--> use of intermediaries (export agents etc.)

6

EXIM Bank

Export Import Bank:
- provides tools and aid to support american exports
- financing when private sector is unwilling to borrow money for american firms

7

Reasons why US ports are considered uncompetetive

1) more Imports than exports --> shipping of empty containers
2) Cannot handle large ships (shallow)
3) do not have sufficient infrastructure (lack of automation)