With the growth of the e-commerce industry and the increasing ease of conducting business electronically, it isn’t surprising that more businesses are choosing to trade across borders to take advantage of the revenue-generating potential that export and import activity offers.
While there are numerous exciting business opportunities – as international markets continue to express interest in local products / services and vice versa – international trade remains a complex process, which if not managed correctly, can create unfavourable situations for businesses.
This is according to Norman George, Operations Director at DHL Express South Africa, who says that it is important for businesses to be aware of the diverse trade regulations, and implications of these, when moving shipments across the various borders.
George points to the latest World Bank Doing Business 2013 report which revealed that South Africa is currently ranked 115 out of 185 economics with regards to the ease of trading across borders. While this is an increase from last year’s ranking of 145, it still highlights the challenge local businesses face in terms of document requirements and customs procedures.
As a result, businesses need to have an understanding of customs requirements applicable to their product’s origin and destination, in order to minimise any delay and extra costs at border clearance which could adversely affect a business’ profits.
George offers a few pointers to local businesses to assist with a smooth shipment process.
“First and foremost, Customs require the importer or exporter to register as an importer/exporter before transacting internationally. Following this, businesses need to ensure they have the correct paperwork.”
“Typical documents that are required included certificates stating the proof of the products origin as some goods could attract preferred rates of duty depending on their country of origin. There are also goods that require inspection and release by other government agencies, such as The Health Department, so it is imperative to enquire whether the goods being shipped from specific countries require additional permits.”
Invoices also need to be provided and these need to be in a specific format and include the suitable content, which includes the purpose for the product (commercial or non-commercial) and the proof of their values. “Customs reserves the right to stop, detain and physically inspect any shipment entering or exiting the country. During this phase, they subject the clearance of the product to various checks, such as valuation, to determine whether the value paid to the supplier is in fact the value declared for Customs purposes. There are legal implications if these details do not correspond,” says George.
Commodities are coded by means of a tariff number and as a result, a Harmonised Tariff code will be assigned to the product, which is a code that determines the rate of duty payable on that specific commodity.
Another aspect to consider is whether there are any special requirements for the specific country the product is being shipped to, such as temporary imports / exports and restrictions, says George. “There are prohibited and restricted goods that can only be shipped in and out of the country under a permit or license, such as plant or plant products which require a phytosanitary certificate or medicine / scheduled substances which require a medical control council certificate.”
George says that to further guarantee a smooth shipment process, for both the business and customer, it is vital for companies to ensure traceability and transparency in the transportation process.
“Not only will this help keep the customer informed, but it will also assist the company prevent delays should there by a stoppage in the process. With the knowledge of a particular stoppage, a business can then help resolve the issue quickly and efficiently, as in some instances, the delay is likely solved with the provision of extra data or forms.”
The speed needed for the shipment also needs to be considered when assessing the company’s transportation needs.
“Businesses must match the transport need to the needs of the customer, which can be categorised into the size, urgency, costs, speed and complexity of shipment,” says George.
Due to the complexities of the procedures and processes, it is advisable to seek assistance from service providers that can support and advise according to a business’ individual needs.
“This enables good local knowledge and the assistance with the clearance process and procedures. They will also ensure that all requirements are met and understood before shipping, as well as manage expectations and navigate through some time very difficult procedures.”
“By fully understanding the processes and terminology involved with entering the different markets, local businesses can build a long-term foundation for successful international trade,” concludes George.