There are no second chances when you ship materials to a meeting, convention, or trade show. If materials arrive late--or not at all--you've blown it. The window of opportunity is slammed shut and your options are pretty limited when this happens. How do you avoid such disasters? By using qualified, experienced suppliers, of course. But remember that the suppliers act as the agents of the person shipping the materials. You are ultimately responsible for complying with the regulations, and will have to pay any penalties for noncompliance--whether those penalties are in the form of duties and taxes, or delayed materials. Therefore all shippers--meeting executives, show organizers, and exhibitors--need to be aware of the requirements.
It's especially important for a meeting executive who is organizing a show or pavilion to discuss shipping procedures and schedules, packing requirements, and documentation with the freight forwarder early on, so that all this information can be included in the exhibitor manual.
Customs Documents * The ATA Carnet.This is a "merchandise passport" issued by the USCIB in New York City (212/354-4480; www.uscib.org). The ATA Carnet demonstrates to customs officials that you are bringing in the merchandise only temporarily; if you do not re-export the merchandise, you will be subject to penalties. ATA Carnets may be used for most business-related items, including commercial samples, professional equipment, and goods for exhibitions (consumer shows) and fairs (trade shows).
The ATA Carnet is currently accepted in nearly 75 countries; the most recent addition is the People's Republic of China.
A Carnet is not required, but there are several advantages to using it whenever possible:
* 1. It is valid for a year, and can be used for unlimited entries and re-entries.
* 2. It eliminates temporary import duties and such taxes as value-added taxes (VAT). In China, for example, using the ATA Carnet eliminates the VAT (17 percent), consumption tax (10 to 50 percent), and various duties.
* 3. It is far less expensive than Temporary Importation Under Bond (see below), which can reach 150 percent of the value of the shipment.
* 4. It simplifies customs procedures and re-entry into the United States.
Carnet costs include a processing fee, which ranges from $120 to $250, depending on the value of the shipment; and a security deposit of 40 percent of the value of the shipment (100 percent in Israel and Korea). The deposit can be paid by check or by surety bond. If it is paid by surety bond, there is an additional charge of one percent of the deposit ($10 for each $1,000). That additional charge should be weighed against the interest lost if the deposit is paid by check.
Example: If the merchandise total on the General List is $20,000, the security deposit is 40 percent of that amount, or $8,000. And the charge for the surety bond is one percent of that, or $80.
* Temporary Importation Under Bond (TIB). If you do not use a Carnet, you must post a bond to guarantee that the merchandise will be re-exported. A bond must be obtained for each foreign country, on arrival in that country. That is obviously far more complicated than using a single ATA Carnet, which is obtained before leaving the United States.
* Certificate of Origin. This document, required by some countries, states where the items in the shipment were manufactured. Be alert to the pitfalls here, cautions William A. Maron, director of ocean exports for A.N. Deringer, Inc., a freight forwarder and customs broker based in Valley Stream, N.Y. Maron tells of a shipper who listed "U.S." as the country of origin of sewing machines that were purchased here, but manufactured in Japan: the machines were detained by customs officials for six months. The freight forwarder completes the Certificate of Origin, and should know which countries require it.
* Temporary Export License. This is a specialized license required by the U.S. Government for the export of products that could affect national security, including aircraft parts, firearms, and some computers. Licenses are issued by either the Department of Commerce or the Department of State, depending on the commodity. For further information, contact the Department of Commerce (800/USA-TRADE) or the Department of State (703/875-6644).
An experienced international freight forwarder can tell shippers which of these documents they will need. Some documents are always required, some vary by country or commodity, and some are at the discretion of the shipper.
For specific customs information for your shipment, you can also contact the nearest U.S. Customs office. Check your phone book under "Treasury Department" in the U.S. Government listings.
What Freight Forwarders Do An international freight forwarder will transport your shipment from one of its consolidation points in the United States to the airport or seaport (some forwarders will also transfer shipments from your warehouse to the consolidation point), and will help with documentation.
But if you ship exhibit booths and exhibit materials, such as products for display, it's preferable to select an international exhibit freight forwarder. This specialized forwarder is more expensive, but provides additional services, including delivering the freight to the stand (as booths are known outside the United States), unpacking, storing empty crates during the show--and reversing the procedure at the end of the show. In other words, the international exhibit freight forwarder usually handles drayage, which in the United States is the responsibility of a separate contractor. (Caution: It's usually done this way, but not always. Be sure to ask the freight forwarder if he or she handles drayage.)
What Customs Brokers Do You'll also need a customs broker, who receives goods at the destination, declares the value of the shipment, processes the paperwork, and handles the payment of any fees required to clear the goods.
Although you can contract separately with a freight forwarder and a customs broker, it ultimately makes more sense to select a forwarder who is also a licensed customs broker. There's one less supplier to deal with, and you're more likely to receive seamless service.
Other Shipping Options Why not deal directly with the airline? Because an airline is strictly a carrier. Thus it usually cannot arrange to ship merchandise to the air terminal, prepare the documentation, and help clear customs.
What about using air couriers? For anything more than catalogues, it's not a good idea. If any problems arise at the port of entry, there will be no one to act as your agent, to take responsibility for the shipment and post a bond if necessary.
Locating Suppliers If you are planning a meeting or organizing a trade show outside the United States, your best bet is to select a U.S.-based company as the official freight forwarder. There will be no language problem, which is especially important when you're dealing with so many technical terms. And time zone differences will be minimal, perhaps nonexistent.
If you are organizing a pavilion (a group exhibit within a trade show), the show organizer will name an official freight forwarder based in the country where the show is being held. That forwarder then appoints agents in all the countries participating in the show. In this situation, you still are almost always better off selecting your own forwarder rather than using the official supplier. The exception: Some countries or areas require a special customs bond and give only the official freight forwarder permission to offer that bond. Such bonds are required, for example, in Mexico and Latin America.
For companies that exhibit independently in a show produced by an offshore organizer, it's preferable to use the official forwarder. If there are any problems, you'll have more clout with the organizer than if you selected your own supplier.
There are very few U.S.-based international exhibit freight forwarders, perhaps a dozen or so. To identify them, check the directories issued by the International Association for Exposition Management, the Trade Show Exhibitors Association, and the Center for Exhibition Industry Research. A more comprehensive listing of international freight forwarders, not just those that specialize in exhibits, is the directory of the National Customs Brokers & Forwarders Association of America, Inc. (See Resource Guide, page 56, for listings for these directories.) U.S. Customs offices might also be able to recommend customs brokers and freight forwarders.
Evaluating Suppliers Because the international freight forwarder plays such a crucial role in the success of a meeting or trade show, it is very important to evaluate the candidates rigorously. Be sure to consider the following:
* Experience. How long has the freight forwarder been in business? If you have exhibitors who will be shipping special equipment, is the forwarder experienced in handling such equipment?
* Reputation. Always ask for current references. For exhibit freight forwarders, be sure to ask for names of show organizers and, if practical, managers at foreign facilities.
* Affiliation. Does the forwarder belong to industry associations? Affiliation with industry groups isn't a must, but it is a good indicator of professionalism.
* Services. Request a detailed list of the services that the forwarder can provide. Will he or she pick up materials at your place of business, or must you deliver to the consolidation point? Who handles the paperwork? Who handles customs clearance? Is the forwarder a licensed customs broker? If the forwarder is an exhibit freight forwarder, he or she should be able to provide door-to-booth and booth-to-door services. If you are organizing a pavilion, be sure to ask whether the freight forwarder will contract with the show organizer on your behalf, or will you need to do that yourself?
* Staffing. If materials are being shipped to a trade show, will there be an on-site contact during the show? Will that person be in the exhibitor service center during the show, for maximum availability? Will that person speak both English and the language of the country where the exhibition is held?
* Rates. The components of shipping costs are the number of pieces, the size and weight of the pieces, the value of the shipment, and the type of commodity. Give the forwarder an example of something that is likely to be shipped and request a quote. The forwarder should provide a very close estimate, which will give you a clearer basis for comparing the price/value ratios of the forwarders you are considering.
* The commercial invoice is a list of all items being shipped (including exhibit booths) with their dimensions, weight, and value. For items that will be displayed and then re-exported, not sold, list the cost of manufacture, not the selling price.
* The packing list indicates which of those items is in which package. It must be totally accurate and specific. "Exhibit materials" or "meeting room supplies" won't do it. There is no official form for either the commercial invoice or the packing list. Therefore, you may develop your own forms, and you may even combine the commercial invoice and packing list into a single form. It's advisable to prepare these forms in both English and the language of the country where the show is being held. The commercial invoice/packing list is almost always required. The exception: If an ATA Carnet (see below) is used, the General List that is part of the Carnet paperwork replaces the commercial invoice/packing list.
* The Shipper's Export Declaration is required by the Department of Commerce for all shipments valued over $2,500. It is completed by the freight forwarder, not by the shipper. If you use an ATA Carnet, the U.S. Council for International Business (USCIB), which issues the Carnet, can provide the SED forms.
People often assume that you ship by air if you want to save time, and by sea if you want to save money. It's not that simple. There are other factors that must be taken into consideration as well.
* Time. Air freight is faster, of course, but ocean freight isn't always prohibitively slow. And it can yield savings of up to 30 percent.
* Money. Ocean freight isn't always less expensive. There is a minimum charge. Thus sending a very small shipment by ocean freight will actually be more expensive than sending it by air freight.
* Size and weight. If you use ocean freight, you can ship larger or heavier pieces. Air freight is often limited to items with maximum exterior dimensions of 20 feet by 8 feet by 8 feet. Note that size and weight can offset each other. An item that is very light in weight will incur a relatively high rate if it is large. And a small but heavy piece will also incur a high rate.
* Sensitivity. Items that are sensitive to motion or to dampness--computers and instruments, for example--should be shipped by air. But any item sent by ocean freight must be packed more carefully because of exposure to the elements.
TIP:There can be cultural, political, and economic restrictions on the importation of products or materials. For example, you would not be allowed to ship a video that shows a woman with bare arms to a Muslim country, or a video that presents the Chinese in a negative way to China.
TIP:Be aware that some countries automatically impose certain standards and conditions, which may not appear in your hotel or convention center contract.