New Articles

HOW TO EXPORT TO THE UNITED STATES: 6 SIMPLE STEPS FOR SMEs

SMEs

HOW TO EXPORT TO THE UNITED STATES: 6 SIMPLE STEPS FOR SMEs

According to the Organization for Economic Cooperation and Development, International Trade Statistics 1, participation in exports remains largely led by large enterprises (250 or more employees) in industrialized countries. In developing countries, the story is the same, and only a small percentage of small and medium sized businesses export at all. The World Trade Organization (WTO) reports that SMEs in developing countries make up roughly 45%, on average, of a country’s Gross Domestic Product (WTO, 2016), but SMEs’ exports represent on average 7.6 per cent of total manufacturing sales, compared to 14.1 per cent in the case of large manufacturing firms (WTO, 2016).

If you want your small or medium-sized business to get a piece of the export pie, according to the OECD Trade Committee, there are a number of challenges to be overcome. These include everything from limited access to credit, insufficient use of technology, and lack of export experience, to border controls. The most significant challenge posed, remains learning the ins and outs of getting your product from your country to foreign markets in a cost effective manner. These tips can help your small business become better equipped to enter the exciting world of exports.

The first stage in export planning is to investigate the market and identify your reasons for exporting to customers.
First, determine demand. You need to know where in the U.S. your product is needed. If you sell bathing suits, better export to Florida and California than to Nebraska or Alaska.

Second, you’ll need access to buyers. Start with researching buyers on the Internet, use your local U.S. Chamber of Commerce as a first resource, followed by the Economic Officer in the U.S. Embassy or Consulate in your country. Then, watch for upcoming trade shows where your goods could be featured.

Next, either start selling directly on your own ecommerce platform (secure payment and delivery systems should be integrated), or build a relationship with an international trade agent, whom you trust to help you navigate state and city markets, regulations, and opportunities for you to sell your goods in the U.S. , either to wholesale distributors, or directly to retailers. Improved logistics channels, eCommerce, and free trade agreements make that possible.

Third, find out what, if any, tariffs or exemptions exist for your goods. If there are no trade agreements between your country and the U.S., exempting your goods from tariffs, you’ll need the help of a U.S. licensed Customs Broker. A U.S. Customs Broker will be familiar with the Harmonized Tariff Schedule of the United States (“HTSUS”), and help you classify your goods and determine the tariffs you’ll have to pay to the U.S. Customs and Border Patrol, before your goods can enter the United States.

The National Customs Brokers and Freight Forwarders Association of America can easily provide brokers in the state or region you’re targeting.

Fourth, once you’ve got a better understanding of your profit margin to determine how you’ll sell your goods in the export market, you may wish to consider how to potentially mitigate any risks that can occur while your goods are being shipped, or once your goods arrive at their destination and are with the buyer(s). There are payment risks, damage or destruction of goods risks, documentary risks with customs, and many others.

You may have access to a good trade and customs attorney in the originating country, but he or she may not be thoroughly familiar with U.S. trade compliance requirements. In that case, you may benefit from consulting with a U.S. international trade lawyer to learn how they can help you mitigate risks in exporting by intervening with customs on your behalf, managing disputes through a properly drafted contract, and putting you in touch with relevant agents for information on U.S. trade insurance and compliance with government regulations.

In the U.S., generally, a phone or email consultation with a reputable lawyer would be free. If they want you to pay to talk with them for a few minutes about your problem and find out if they can help you, then hang up and call another lawyer.

Fifth, you need to build a relationship with a reputable freight forwarder or consolidator, who will help you decide: whether to ship by air or by sea; what documents are required for the country you are exporting to; how to pack your products for shipment; label them, and insure them. Normally, the freight forwarder will take care of it all, for a premium, but beware of INCOTERMS (regulations that define the responsibilities of buyers and sellers involved in commercial trade).

You must have at least a basic understanding of them to comprehend the shipping documents your freight forwarder will have you sign, and to protect your rights and limit liability.

Sixth, yes exporting is exciting, but it’s also risky doing business across oceans and continents with buyers you don’t know and may never see. To that end, there are many export resources in the originating country that companies, small and large, can benefit from. Usually Chambers of Commerce are a good starting point. There are associations of American Chambers of Commerce in every region of the world; just check the American Chamber of Commerce online directory for the specific one in your region or country.

Your own government’s resources can usually also offer invaluable information and global networks, including relevant contacts in the U.S. This is particularly helpful if you have a problem that can be fixed by your government seeking the intervention of commercial or economic officers at the local U.S. embassy in your country (keep in mind though that the Embassy is meant to assist U.S. citizens and residents, not foreigners).

Further, your local manufacturers association(s) may have members who have exported in the past, and can share their expertise. Lastly, commercial banks and local Export-Import Banks can guide you on how to leverage export financing, and minimize your financial exposure, when transacting business with foreign buyers.

Against this backdrop, you can reduce the external challenges SMEs face in trading, and better manage the uncertainty inherent in doing business internationally, all while making a healthy profit and expanding to new markets.

Magda Theodate is an international trade attorney and Director of Global Executive Trade Consulting Ltd. She works as a senior consultant for international development agencies in lower and middle income countries, resolving project execution challenges affecting trade, procurement and governance. To learn more, please visit: www.globalexecutivetrade.com

textile bag

U.S. Textile Bag And Canvas Market – China’s Imports Bounces Back after Two Years of Decline

IndexBox has just published a new report: ‘U.S. Textile Bag And Canvas Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

The revenue of the textile bag and canvas market in the U.S. amounted to $7B in 2018, increasing by 7.8% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +6.4% over the period from 2013 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed throughout the analyzed period. The pace of growth was the most pronounced in 2014 with an increase of 18% against the previous year. Over the period under review, the textile bag and canvas market attained its maximum level in 2018 and is expected to retain its growth in the near future.

Production of Textile Bags And Canvases in the U.S.

In value terms, textile bag and canvas production amounted to $4B in 2018. The total output value increased at an average annual rate of +8.3% from 2013 to 2018; the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2014 when production volume increased by 20% against the previous year. Textile bag and canvas production peaked in 2018 and is expected to retain its growth in the immediate term.

Exports from the U.S.

In 2018, the amount of textile bags and canvases exported from the U.S. stood at 6.5K tonnes, growing by 51% against the previous year. Over the period under review, textile bag and canvas exports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2018 with an increase of 51% y-o-y. Over the period under review, textile bag and canvas exports reached their peak figure at 7K tonnes in 2014; however, from 2015 to 2018, exports stood at a somewhat lower figure.

In value terms, textile bag and canvas exports totaled $47M (IndexBox estimates) in 2018. Overall, textile bag and canvas exports, however, continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2017 when exports increased by 36% against the previous year. Exports peaked at $59M in 2014; however, from 2015 to 2018, exports failed to regain their momentum.

Exports by Country

Thailand (578 tonnes), Australia (567 tonnes) and Trinidad and Tobago (464 tonnes) were the main destinations of textile bag and canvas exports from the U.S., with a combined 25% share of total exports. These countries were followed by Viet Nam, Poland, China, India, Russia, Malaysia, Nicaragua, the Dominican Republic and Costa Rica, which together accounted for a further 46%.

From 2013 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Viet Nam (+1,030.1% per year), while the other leaders experienced more modest paces of growth.

In value terms, the largest markets for textile bag and canvas exported from the U.S. were Poland ($7.6M), Australia ($6.7M) and the Dominican Republic ($4.4M), with a combined 40% share of total exports. Costa Rica, China, Trinidad and Tobago, India, Nicaragua, Viet Nam, Thailand, Malaysia and Russia lagged somewhat behind, together comprising a further 18%.

In terms of the main countries of destination, Viet Nam (+393.6% per year) recorded the highest rates of growth with regard to exports, over the last five years, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The average textile bag and canvas export price stood at $7,219 per tonne in 2018, waning by -45.8% against the previous year. Overall, the export price indicated a slight increase from 2013 to 2018: its price increased at an average annual rate of +1.3% over the last five years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. The growth pace was the most rapid in 2017 when the average export price increased by 52% against the previous year. In that year, the average export prices for textile bags and canvases reached their peak level of $13,329 per tonne, and then declined slightly in the following year.

There were significant differences in the average prices for the major foreign markets. In 2018, the country with the highest price was Poland ($17,736 per tonne), while the average price for exports to Russia ($272 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to the Dominican Republic (+55.6% per year), while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, the textile bag and canvas imports into the U.S. totaled 351K tonnes, rising by 8% against the previous year. The total import volume increased at an average annual rate of +2.1% over the period from 2013 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations in certain years. The most prominent rate of growth was recorded in 2018 with an increase of 8% against the previous year. Over the period under review, textile bag and canvas imports attained their maximum at 360K tonnes in 2015; however, from 2016 to 2018, imports remained at a lower figure.

In value terms, textile bag and canvas imports totaled $1.5B (IndexBox estimates) in 2018. Overall, textile bag and canvas imports continue to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2018 with an increase of 8.9% against the previous year. Imports peaked at $1.6B in 2015; however, from 2016 to 2018, imports failed to regain their momentum.

Imports by Country

In 2018, China (197K tonnes) constituted the largest supplier of textile bag and canvas to the U.S., with a 56% share of total imports. Moreover, textile bag and canvas imports from China exceeded the figures recorded by the second-largest supplier, India (83K tonnes), twofold. The third position in this ranking was occupied by Bangladesh (25K tonnes), with a 7.1% share.

From 2013 to 2018, the average annual growth rate of volume from China amounted to -2.2%. The remaining supplying countries recorded the following average annual rates of imports growth: India (+13.0% per year) and Bangladesh (+7.4% per year).

In value terms, China ($905M) constituted the largest supplier of textile bag and canvas to the U.S., comprising 62% of total textile bag and canvas imports. The second position in the ranking was occupied by India ($218M), with a 15% share of total imports. It was followed by Bangladesh, with a 8.4% share.

From 2013 to 2018, the average annual rate of growth in terms of value from China stood at -3.0%. The remaining supplying countries recorded the following average annual rates of imports growth: India (+11.5% per year) and Bangladesh (+5.9% per year).

After two years of decline, Chinese imports of textile bag and canvas into the U.S. rebounded in 2018, with an increase of 8.5% y-o-y.

Import Prices by Country

In 2018, the average textile bag and canvas import price amounted to $4,139 per tonne, standing approx. at the previous year. In general, the textile bag and canvas import price, however, continues to indicate a temperate descent. The growth pace was the most rapid in 2018 an increase of 0.8% against the previous year. Over the period under review, the average import prices for textile bags and canvases attained their maximum at $4,572 per tonne in 2013; however, from 2014 to 2018, import prices remained at a lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Bangladesh ($4,877 per tonne), while the price for India ($2,627 per tonne) was amongst the lowest.

From 2013 to 2018, the most notable rate of growth in terms of prices was attained by Indonesia, while the prices for the other major suppliers experienced a decline.

Companies Mentioned in the Report

Dhs Systems, Rainier Industries, Covercraft Industries, Duluth Trading Company, North Sails Group, J & M Industries, Anchor Industries, Thomas Sign and Awning Company, Holland Awning, Outdoor Research, Hdt Expeditionary Systems, Veada Industries, C. R. Daniels, Bestop, Starr Aircraft Products, ADM Corporation, Kenneth Fox Supply Company, Polytex Fibers, Adco Products, Marine Accessories Corporation, Gleason Corporation, Webasto-Edscha Cabrio USA, Outdoor Venture Corporation, Magna Car Top Systems of America, Mpc Group, Ajr Enterprises, Targus Group International, Bluewater Defense, Mondi Bags Usa

Source: IndexBox AI Platform

U.S. Export Volume Expected to Climb in 2015

Baltimore, MD –   U.S. exports are expected to grow by $88 billion or 5 percent, in 2015, despite tepid global GDP growth, according to a research report just released by trade credit insurance provider, Euler Hermes.

According to the company’s latest Economic Insight report, the U.S.’s biggest export gains in 2015 will come from Canada, China and Mexico.

The report also projects strong export increases to smaller countries in Asia, Latin America and the Middle East, “reflecting recent rapid growth in these emerging markets, while also providing the U.S. with more diversification in its export composition.”

Export gains will primarily come from the agrifood, chemicals, energy and mechanical sectors. Textiles and ferrous metals show the smallest increases as the U.S. has become a much smaller player globally within these industries.

As U.S. energy companies are expected to start exporting natural gas globally by the end of 2015, revenues from this sector could be significant, growing from $16 billion in 2012 to $42 billion in 2040 or nearly 1 percent of GDP.

The planned 2016 expansion of the Panama Canal, which may double its capacity, “will also boost U.S. trade by allowing larger ships to carry exports from the U.S. through the canal, significantly reducing costs and making those exports more competitive.”

The U.S.’s largest trade deficit is with China, but several factors could shrink it, especially as China pivots toward a more domestically driven economy, and as the U.S. natural gas boon and favorable labor conditions have reduced China’s competitive wage advantage to the point that a growing number of companies are opting to ‘in-source’ their manufacturing.

In the coming year, the value of the U.S. dollar is expected to rise in 2015 making U.S. exports more expensive and less competitive with export financing faces several challenges, including tight lending conditions and risk-averse bankers.

Rising rates in 2015, the report says, “may make financing more costly and/or harder to obtain, especially given fragile global growth and geopolitical uncertainty.”

In addition, global business insolvencies “are expected to fall 3 percent, a much slower rate than 2014’s decrease of 12 percent.”

At the same time, insolvencies still remain 12 percent above 2007’s pre-crisis levels, meaning that exporters will need to continue stringently evaluating their partners for insolvency risk.

To further promote U.S. exports, two major trade agreements – the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership – are currently being negotiated.

Both agreements  are being structured to reduce the burden of Customs, regulations, tariffs and taxes, lower barriers to trade, and allow increased access to new markets.

“Demand for U.S. exports is, of course, dependent on the strength of the global economy,” said Dan North, senior economist for Euler Hermes Americas.

“While the global economy is set to enter its fourth straight year of lackluster growth, the U.S. economy continues to grow and many of our industrial sectors are showing strength both at home and abroad.”

12/11/2014