Weak yen boosts exports

The record low value of the yen continues, which is likely to be a boost for trade. Japanese products also remain very popular overseas.

According to the World Economic Outlook published by the IMF, the world economic growth rate for 2021 was 6.01 TP3T. The figures reflect hopes for the containment of COVID-19 infections, but this is the first time since 1980, which is the period back in the database released this time, that the world economic growth rate has reached the 6% range, and it is expected that the world economy will recover more rapidly than ever before.

In this situation, when you are considering exporting for the first time, it is important to understand how trade flows. Today, I would like to introduce the flow of exports.

Trade flows

The process of overseas export trade can be broadly divided into three steps: contract → transportation → payment. However, if broken down into more detail, there are five steps, and documents and procedures unique to overseas trade are required.

① Selection of products and trading partners (markets and trading companies)

Among the products we handle, we decide which ones have strengths that can be used in overseas markets, promote them overseas, and look for sales targets. We also consider whether to do business with companies that want to purchase our products. At the same time, we check whether the items are subject to approval or application in the other country, or whether legal inspections are required.

② Contract negotiations and conclusion

Transaction negotiations involve determining the terms of sale, such as product price, payment currency, payment method and timing, quality and quantity, transportation method and delivery timing, packaging conditions, inspection method and timing, after-sales service, handling of product liability, and how to respond in the event of a problem.
Unlike domestic transactions, long-distance transportation is required, so it is necessary to decide on the so-called trade terms, such as the allocation of responsibility in the event that goods are lost or there is a problem during transportation, that is, the delivery place of the goods, insurance, etc.

Once an agreement is reached on the above negotiated content, a contract is prepared. For international contracts, English contracts are the norm.

3) Securing transportation means and bringing goods into bonded areas (sea freight/customs brokers)

We secure transportation means, such as reserving shipping space, through a marine freight (customs broker). We also provide insurance in case of accidents during transportation. Once preparations are complete, we transport the cargo to a bonded area for customs clearance.

④Customs clearance procedures, loading and transportation of goods (sea freight, customs broker)

Although this may differ depending on the contract conditions, the exporter usually handles export customs clearance and loading procedures. After border transportation, the importer handles import customs clearance procedures. Applications related to customs clearance are increasingly being made online.

⑤Payment and product collection

The importer pays the fee and receives the goods. However, the timing of payment varies depending on the contract terms (advance payment, L/C payment, deferred payment, etc.).

There are many things to keep in mind when exporting overseas!

When considering overseas export, it is important to select overseas business partners, but it is also important to select domestic agents and intermediaries. This time, I explained the flow of overseas trade. It may seem like a complicated procedure at first glance, but it is a basic field of overseas export, so let's understand the main points and use it to develop trade.

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