5 Ways How The Exporter Can Jeopardize Your Import

The company wishes to invest in new machinery to modernize its industrial plant and we

found an exporter in Germany able to provide what we wanted.


While the engineering department was analyzing the technical information, I prepared the

import feasibility study, raising all logistical and tax costs, as well as getting on the same page

with the customs broker and the tax sector to see what customs benefits we could apply.


The information presented to the board of directors concluded that the import is feasible.

After successfully negotiating the purchase, we got ready to start it.


1. Not delivering on time.


As Mr. Klaus didn’t reply my e-mail from yesterday, I decide to call him:


- Good morning, Mr. Klaus! Here is Jonas from 'Keep Calm & Keep Importing LTDA.', how are you my friend?

- Good Morning.

- So... I asked you yesterday which day in the next week I can send the container to load the machine.

- Readiness only in 4 weeks.

- But we have agreed next week, what’s happened?

- (Mix of german and english impossible to know whether he was explaining or cursing me), and when are you going to pay me?

- What payment?" Next installment is only after boarding.

- Readiness in 2 weeks.


As a result of this unforeseen delay (especially when it comes to Germany), I must again quote the international freight and hope that the new costs ​aren’t higher or that the carriers don’t apply the dreaded GRI (General Rate Increase) on the freight. Besides, we also have to estimate the import costs again as we try to predict exchange rates. For a country in which the dollar rises with State’s evidence turns, twitter posts and audio leaks, it’s easy peasy.


2. Create information conflict between importer and freight forwarder.


Two weeks later, as we purchased the machine on an Ex Works (EXW) modality, the freight forwarder and I try to schedule with Mr. Klaus the pick up of the goods at his factory. However, while my German friend informs me they are going to pick it up on Tuesday, the forwarder's follow-up says:


Kindly note that the exporter informed us to load the cargo on Thursday.


If the exporter tells me that they can only make the goods available in the morning, the agent (forwarder) says:


Please note the exporter advised they do not make machinery available on Thursday.


If Klaus says it has been put off to Friday, my agent says:


Please note that Friday is holiday in Germany, the loading is going to happen on Monday.



And with this trickery (and also because I trusted an exporter with whom I've never worked before), the German managed to delay the goods availability in one more week, quite likely on purpose. I start to believe the German isn’t that trustworthy.


3. Lack of infrastructure to ship goods.

To my surprise, it's Monday, and who calls me is Klaus along with his coldness (which is the only stereotype that this German should not follow):


- Jonas, you sent me a Dry container, I need an Open Top one.

- The cargo in the crate and palletized is 1.8m high, why does it need to be an Open Top?

- I cannot get it in through the front door, only hoisting it with my crane.

- Don’t you have a forklift?

- No, just the crane.


Although I was stunned by Klaus' company infrastructure and that it makes sense to quote the freight using a dry container based on the size and weight of the machine, the problem would have been avoided had we informed the exporter in advance.


If you don’t work in the field, Dry is the common container and the Open Top one has no roof and can be covered with canvas.  



Caso não seja da área, o Dry é o container comum e o Open Top não possui teto e pode ser fechado com lona.

I ask the freight forwarder what the current price of the Open Top container is and I discard the possibility as soon as they tell me. Besides multiplying the freight value, it consequently would increase the cost of taxes, insurance and storage, not to mention the cost of swapping the containers and probably missing the shipping cut-off date (which would increase the delay by one more week).


Faced with the unfavorable scenario, I agreed with Klaus to share the costs to hire a forklift and we continued the operation without delays and with a little extra cost.



4. Incorrect information on customs clearance documents.


With the arrival of the container at the port of final destination, we started the import customs clearance and waited for Siscomex (Brazilian customs system) to inform on which channel it had been parameterized (an analysis done by the system to select if goods have the “green light to go or should be verified by documentation or inspection like “red light” or, red channel). But the music I heard that morning left a skeptic like me quite worried (a song that talks about the red color, joking about the parameterization of the cargo under the red channel).



I could hear the singer's laughter as the customs broker informs me that it had fallen under the red channel.

Before the inspector arrived for the physical inspection, the broker and I checked the goods (which had the frontal part of the pallet broken – remember that). We also located on the product where the serial number was, since it is the type of information that is always conferred in machinery goods by the Internal Revenue Service and for the inspection to be completed as soon as possible.

And, for my fourth (but not last) surprise:

"The number on the machine was different from the Commercial Invoice."

In short, a 1% fine over the Customs Value of the import (Minimum BRL 500), plus the extra storage to correct this document issue and obtain the clearance of the goods. Because it was Klaus's fault who reported the incorrect number, now we have to seek him to:


- Prove the documentation error; - Explain about fines in the Brazilian customs clearance processes; - Prove the payment of these extra costs; - Charge the exporter for the reimbursement.

Easy! It should all be sorted out by Oktoberfest.

 

"To learn more about Customs Clearance, read Practical Explanation of Import Parameterization Channels. ''  


5. Lack of proper packaging.

Goods are cleared and finally delivered to our site. Have we come to an end? How many times I have made this mistake. All I had to do was to breath in relief to be reminded that the import does not end with the arrival of the goods. The telephone rings:

- Jonas, the machine panel doesn’t turn on, the board inside the machine is cracked.


We had to urgently import a new board because the cracked one had no fix, and we had to pay for it! Because Klaus wasn’t going to send it under warranty without the insurance report. Yeah, a born salesman, I couldn’t wait to import more from him.


The insurance report claimed the expected, remember the broken pallet? It wasn’t suitable to support the weight of the machine and broke right on the side where the panel was, causing the crack due to the impact.

No insurance company covers damage caused by improper packaging, as this negligence increases the risk of accidents occurring and insurance companies covers only unforeseen circumstances. Therefore, I also had to charge for reimbursing the purchase of the new board – at least it would be easier to explain this to Klaus than the reimbursement for the fine.


***


As I have never worked in an office built under a cursed ancient cemetery, these difficulties have never occurred to me in the same import, but they do happen, and even if we try to foresee such problems, exporters can repeat them in a variety of ways.  

"I like the lack of routine that the work in import offers, but the cause of it is mostly from problems, you have to like solving them in this profession."

 

And you, reader?


Has it ever happened to you? Does any other problem happen more often? I wish these five issues were the only ones that happened... Would you like to share a solution for one of them? Let's enrich the topic in the comments.




Writen by por Jonas Vieira

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