With the increasing population, food production demand also increases. Agricultural packaging helps farmers and the exporters to deliver food in the handiest approach without any loss.


Packaging prevents unnecessary waste post-harvest and during the processes of production, storage and transportation. It ensures short and long-term stability between the farmers and consumers.
<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a><ul><li>
Packaging for agricultural export business:
The packaging is rising an essential element for your export operation, impacting the safety, cost, communication and even marketing of your agricultural products. Agricultural packaging has gained immense popularity across the world. According to Statista, the global agricultural packaging market is expected to reach [$5.02 billion by the end of 2023](https://www.statista.com/statistics/916723/global-agricultural-packaging-market/). If you want your agricultural products to reach different horizons across the world, you should consider the features, importance and benefits of packaging.

- Safety of agricultural products
 
- Accurate handling instructions 
</li><li>
Importance of packaging in the export business:&nbsp;From the contractual point of view, you are responsible for the packaging of agricultural products such that it withstands the transportation process. If the packaging is damaged in the port of destination, then the handling of the cargo is not considered responsible.

Responsibility of seller: According to the new edition of [Incoterms 2010](https://iccwbo.org/resources-for-business/incoterms-rules/incoterms-rules-2010/), the seller will be responsible for any damage happened to the products during the journey. 
</li><li>
Security of goods: 
The primary purpose of the agricultural packaging is not limited to protecting the cargo during the international logistic process. The packaging is also an essential element of the product’s marketing, as it conveys a strong image of the company in front of the consumers. 
</li><li>
Cost saving:
Packing affects the cost of your products. The packaging must adapt to the cargo units deployed to optimize the use of trucks, containers and the other form of transportation. 
</li><li>
Storage and organization: 
Packages end up taking more space when not compatible with pallets and thus, waste up to 20% of the container’s space, adding 40% extra cost to in the price of your product.</li></ul><a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a><ul><li> 
Handling information: 
The packaging is also essential in terms of the instructions and other handling information. How the carrier, individual and the cargo handle the products will rely on the knowledge of the packaging. The information on the boxes, help the transporters to stack the boxes. The boxes could be stacked upside down, damaging the products when there is no instruction on the packaging. 
</li><li>
Packaging and labelling functions:

In accord with the importance of packaging, the packaging must have these functions to facilitate the transportation process without any hindrance:

- Protect your cargo during international logistics
 
- Communicate your brand with the consumers
 
- Your essential constitutional element of marketing
 
- Reflects your customer’s cultural value
 
- Instruct carriers how the package should be stacked or handled</li></ul>How does packaging boost your agricultural exports?

You should consider the below fundamentals to boost up their exports across the world.
1. Protection of goods:
For agricultural goods, protection of products is necessary, and as the exporter, you have to select the right packaging material to prevent damage. You can request samples to test the packing materials and packaging. The packaging should withstand the transportation process.

The means of transportation also plays a vital part in packaging as you have to select the material based on the transport used and the distance covered by the transportation company. It is necessary to use different kinds of material to target different markets.

2. Business communication:&nbsp;The packaging is something that communicates the product’s features to its buyers, making it the essential marketing tool for exporters. For agricultural products, you can instruct the consumers about the ingredient or can even warn them about the allergies.

Before initiating the export operation, preferences of the consumers in the target market should be assessed to ensure that the package meets the consumer’s expectations.

 3. Indicating the size of the package:&nbsp;The agricultural packaging and its material must be optimized to maximize the use of cargo units. The packaging should be designed in a way that a maximum number of packages fit in each box. The size of the boxes should be considered for pallet use.

EUR-Pallet is the most commonly used pallet across the world, which measures 1,200mm X 800mm X 144mm, which is approximate to 47.2inches X 31.5 inches X 5.7 inches. With these dimensions, the exporters can ensure maximum utilization of the space. It would help if you considered these calculations before packing your agricultural products.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 1.png" width="auto" style="width: auto; height: auto;"></a>
4. Information for handling:&nbsp;The package must indicate how it is handled. The agricultural exporter must mention how the product should be processed on the boxes. They can print indications along with the symbol like “this side up,” maximum stacking height,” handle with care” and many others.

All these indications should be listed outside the packages so that the carrier can transport them without damaging the products. Besides, it would help if you also considered other indications which are mandatory in your company’s product include precautions regarding the exposure to sunlight, damp and extreme temperatures.

5. Reflects your customer’s cultural values:
The information on the packaging should reflect your customer’s cultural values. No matter where does your customer resides, you should consider the local language and other aspects of the information.

In Turkey and Austria, green is well-accepted colour, while in China, red and yellow is accepted because of the royalty in its culture. You should conduct proper cultural analysis before designing your package to ensure and enhance the cultural values of your potential customers.

## What does this ultimately mean?

A right package can not only protect your shipments but also foster sales and increase the perception of value among your customers. Thus, packaging an important aspect which cannot be ignored to boost up the agricultural export across the world.

How Packaging Can Boost Agricultural Exports

The B2B marketplace is perceived&nbsp;tech-&nbsp;phobic&nbsp;which means&nbsp;anything&nbsp;that&nbsp;smells&nbsp;automated to&nbsp;the user&nbsp;cannot be&nbsp;simple.&nbsp;The&nbsp;fight is on, to&nbsp;prove&nbsp;that it is&nbsp;but&nbsp;very&nbsp;simple. It&nbsp;just needs&nbsp;to be&nbsp;addressed, that’s&nbsp;all. Technology need&nbsp;not be feared, it does add only value.&nbsp;The buyer will save time and money and&nbsp;the seller will save on customer acquisition cost, where if a shipper wants rates and clearance, technology will give it all - value, in every service that is provided.&nbsp;How this new striker with a tech-enabled model can herald a movement is to make a statement and deliver a complete package in terms of the price discovery that can assure clarity, compliance to rules, speed, transparency, profitability and instantaneousness.&nbsp;A lot could be replaced by adding value through technology.Tech can be predictive, Tech can analyse.&nbsp;Said and done, pure tech play cannot change human nature. Herein lies the trick.&nbsp;Technology will need Humans.Solution: the tech driven model brings in the now-needed human touch.&nbsp;A hybrid platform which is not merely a portal, which can be an assisted process to transact the deal.&nbsp;Why hybrid?&nbsp;Because a full-fledged technologically sound platform may not quite be what the buyer may want to adopt immediately. Show the buyer a face, a voice that is capable of being the guide and give some comfort with the initial handholding- that is what technology will do...take it whole lot further.The idea is brilliant, so why wait till the concept gets tested?<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a>Watch this space for more…. Next: “The Limit(lessness) of Technology”&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Technology - The need for a human face to it

March was a busy month
at work. Financial year-ends usually are. Although I do try to keep abreast of
all important news and critical events in the industry, sometimes the schedule
doesn’t permit it. 



The news about the
fire on Maersk Honam is one such
missed incident. I came to know about the case whilst going through the industry
updates of the past month.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a>

As I understand from the media reports, it took almost 5 days to bring the fire under control. The
firefighting efforts are still in progress. This explosion resulted in the
death of 5 crew members, destroyed cargo worth millions, and caused heavy
damage to a new (2017 built) vessel. For the shippers who had cargo on board,
the nightmare has just begun. It may take months for them to get their cargo
back (if it has been salvaged) that too after paying a huge sum of money as the
Danish Liner has declared general average.


Why do we need to talk about this
incident?



Even though fire on
ships is not a frequent occurrence, it is a serious one. Thus, when such
incidents occur, we must not brush them away as accidents. They signal an anomaly
in the system or processes that are being followed.



Instead of stopping at mere reportage, these cases should be rigorously investigated for cause. And, we must collectively –
shipping lines, regulatory authorities, NVOCCs, and traders – work to
find solutions to mitigate such incidents. 



To spark off the discussion, I am sharing a
few questions that occurred to me as I read the media reports on the Maersk Honam Fire mishap.

Considering that the vessel was new, it
raises a question regarding the construction plan of the ship/quality of the
construction. One is compelled to ask if the ship’s construction plan was approved
by the American Bureau of Shipping? Or was safety compromised in anyway to
optimize design and reduce costs?<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" alt="" width="300px">



<ul><li>How did the ship’s document of
compliance allow such dangerous cargo to be loaded near the crew’s accommodation?
Did the stowage plan of the vessel comply with the document of compliance? Were
the rules and regulations mentioned in the SOLAS Convention followed? </li><li>Was the cargo correctly approved in
line with the International Maritime Dangerous Goods (IMDG) Code by the
shipping line that accepted it? Here, along with Maersk, the responsibility for the mishap&nbsp; lies
equally with its 2M Alliance Partner - MSC and slot sharing partner - HMM. Since,
the cargo manifest is not made available to the vessel operator, it is
important to know if the
Line that accepted the cargo carried out due diligence?</li><li>Finally, did the shipper correctly
declare the nature of the cargo? One of the major reasons for such incidents is
misleading/incorrect information provided by the shipper or his staff due to
unawareness of the rules or inexperience of dealing with such hazardous cargo. As
an industry, we must take measures to educate shippers of the rules and
regulations, processes to be followed when dealing with hazardous cargo.</li></ul>

In addition to finding answers
to the above questions, we also need to understand where we are lacking in our
efforts to ensure ship safety: 

<ul><li>Are we providing the latest equipment
on the ships to deal with such mishaps?&nbsp; </li><li>Is our crew equipped with the knowledge
and training to manage any operational issues or accidents or fires?&nbsp;Training of
the staff on board must be of top priority because if even one member of the
crew is slightly unsure of what to do in such a situation, we are putting the
life of 25-30 other people at risk.</li></ul>

While investigations will
reveal the cause of the blast on Maersk
Honam, till the time the report is released, we must engage in healthy
debate on how to curb such incidents. As an industry, we must also work on educating
ourselves, our teams, and our customers to make due diligence and safety first an
integral part of our work. We owe it to the 5 sailors who lost their lives in
the incident. Image Source:&nbsp;@IndiaCoastGuard

Maersk Honam Fire: Ignorance as Cause?

According to a press release dated July
5, 2018, French container shipping giant, CMA CGM is set to overhaul
its Asia-Middle East Services from the end of July 2018. Network optimization and improved service offering have been cited as the reasons for this change.<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 1.png" alt="" width="300px">

The press release from CMA CGM is appended below
for your reference and use:

CMA CGM is pleased to announce the reshuffling of its Middle East
services from the end of July 2018.



The Ocean Alliance Day Two
Product will offer in total 4 loops between Far East and Middle East ports with
competitive transit time. CIMEX 1 and CIMEX 3 will be merged into one loop
covering most of ports previously offered. 



The coverage includes the ports in China Mainland/Hong
Kong/Taiwan/Pusan/Southeast Asia and the major callings in Middle East region
such as Jebel Ali, Abu Dhabi, Dammam, Sohar, Hamad, Bahrain, Jubail, etc. 



The New CIMEX 1 rotation
becomes: 

Tianjin - Busan - Qingdao - Shanghai - Shekou - Singapore - Sohar -
Jebel Ali – Hamad – Dammam - Jubail - Singapore - Tianjin &nbsp;<img src="https://prod-cogoport.s3.ap-south-1.amazonaws.com/09887e45a0720e9d89dc713600effb0d/CIMEX%20LOOP%201%20WEB.gif" alt="New CIMEX 1 Service Loop" class="center" width=""> 

 With this reshuffle, CMA CGM will be able to optimize the network and
enhance the reliability of products to our customers. 

Source:&nbsp;CMA CGM

Ocean Alliance – CMA CGM to Reshuffle Routes

Another busy week in Rotterdam. Looking at my full schedule I was thinking about how digitalising my life has helped me save so much time. I order my groceries online and they get delivered right to my kitchen, which saves a hours a week. Same goes for getting somebody a present (not for Christmas yet). My favorite e-tailer has an app for that. A few clicks and everything is arranged. And at work I’m trying to do the same for importers and exporters all over Europe. Letting them book container shipments with just a few clicks.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a>Talking about saving time: let’s go straight to the logistics news highlights for this week<h3>Sustainability</h3>The attention for sustainability issues is still on the rise, which is a good thing. We only have one planet, so we should use it wisely. Both ports and shipping companies have their eye on the green ball, but not all measures taken are favorable for shippers. I do however fully agree with the first concrete action of the World Ports Climate Action Program mentioned in the first article below. Increasing the efficiency of using digital tools is just what we are doing here at Cogoport.“It is important to note that Los Angeles/Long Beach joined six other international ocean cargo gateways in the initiative called the World Ports Climate Action Program. This represents the creation of In their release today, the seven ports have agreed to focus on five concrete actions: 1. Increase efficiency of supply chains using digital tools. 2. …”→<a href="https://www.supplychain247.com/article/international_ports_inspiring_deeper_commitment_in_support_of_the_paris_agr">International ports inspiring deeper commitment in support of the Paris Agreement</a>“The International Maritime Organization, the United Nations agency that regulates global shipping, will require that ships in international waters emit no more than 0.5% sulfur by 2020.The mandate is poised to disrupt the maritime industry, which has long relied on cheap high-sulfur bunker fuel with sulfur content around 3.5%. The major lines are now facing hard decisions on how to meet the mandate.”→<a href="https://www.freightwaves.com/news/k-line-msc-2020">Major shipping companies outline plans for meeting the IMO's 2020 low-sulfur mandate</a>This does have an effect on shippers, as carriers are adjusting fuel surcharge, for example<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" width="auto" style="width: auto; height: auto;"></a><h3>Carrier Rates and Surcharges</h3>“Carriers impose [fuel surcharges] unilaterally without any negotiation with shippers and ignore a market approach to the global problem.The future of higher-cost low-sulphur is a multi-billion, complex issue in international maritime transport and it can only be addressed and understood by shippers if carriers provide cost transparency on their fuel spend and the cost impact of the new IMO low-sulphur regulation”→<a href="https://www.supplychain247.com/article/new_ocean_cargo_carrier_surcharges_in_january_have_supply_chain_managers_co">New ocean cargo carrier surcharges in January have supply chain managers concerned</a>“The containership industry may finally end a lost decade of investment returns as demand accelerates and ocean carriers keep a lid on supply, according to one market expert.&nbsp;With the exception of 2010, operating profit margins have averaged between 3% and 4% over that period. But the benchmark is an operating margin of 10%, which is closer to the industry’s capital cost... The spread between what liner operators earned and what it cost them to deploy ships accrued to the customers who received a service at a rate below what it cost to provide...”→<a href="https://www.freightwaves.com/news/containership-rates-outlook">Customers to pay up as container lines seek better returns, warns shipping expert</a><img src="https://app.cogoport.com/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" alt="" width="300px"><a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a><h3>Christmas is Coming</h3>Preparations for Christmas are in full swing though for a lot of people working in logistics. One of the two articles I read about the upcoming holiday period talks about how major logistics providers have started hiring additional staff already. It also gives tips on how companies can prepare their supply chains for the holiday season. Most of these can be solved right on the Cogoport platform: “Give customers visibility to their orders” and “Prepare to use the spot market to make up for excess demand not covered by carriers” and “Get more rates by connecting with more carriers”. Just saying… ;-)“The time for holiday hiring has arrived, with three of the biggest households in the freight transportation and logistics sectors-UPS, FedEx, and XPO Logistics, each making announcements to that effect over the last few days.”→<a href="https://www.supplychain247.com/article/its_almost_october_and_holiday_hiring_has_arrived">It’s Almost October and the Holiday Hiring Has Arrived for the Transportation &amp; Logistics Sector</a>“A container supply chain would commonly require around a week for a box to be moved from arrival port to an inland distribution centre where it is unstuffed and the goods forwarded. Given the four-to-five week sailing time from Asia to North Europe, the last boat from China is effectively the end of October.”→When should importers start shopping for Christmas shopping?<h3>Seagulls</h3>Last week I wrote about&nbsp;<a href="https://www.cogoport.com/blogs/ocean-freight-roundup">autonomous container ships</a>, and the article below made me think of that immediately. I’m guessing there is a good chance autonomous ships are designed with seagulls in mind…“Birds, too, can confound computers. In Boston, NuTonomy had to reprogram its cars to disperse stubborn seagulls. ”For the local breed of unflappable seagulls—which can stop autonomous cars by simply standing on the street, unbothered by NuTonomy’s quiet electric cars—engineers programmed the machines to creep forward slightly to startle the birds,” reports Bloomberg.”→<a href="https://qz.com/1397504/all-the-things-that-still-baffle-self-driving-cars-starting-with-seagulls">All the things that still baffle self-driving cars, starting with seagul</a>l

Sustainability, Carrier Rates, and Seagulls

In
the two years since opening the <a href="https://www.cogoport.com/en-IN/blogs/direct-port-delivery">DPD</a> import clearance process at JNPT port for
all registered members of Custom’s ACP program, the share of DPD has shown an
increasing trend. According to the update on the port’s website, in February’18 37.15% import containers were cleared via DPD at JNPort and 38.25% at JNPCT.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a>



In
order to further increase adaptability of the model and smoothen the
process, port authorities have been trying to streamline the DPD clearance
process. A notification (Public Notice - 38/2018)“Operationalization
of “one time default intimation” to Shipping Lines by DPD importers at JNCH –Reg”
published on 9th March, 2018,
seems to be a step in that direction. 



In
the later part of the month, Customs released the process that the
importers are to follow for “one time default intimation”. The notification for
the same is cited below for your use and reference.<pclass="msonormal">OFFICE OF
THE COMMISSIONER OF CUSTOMS, NS-III</pclass="msonormal">MUMBAI CUSTOMS ZONE-IIJAWAHARLAL NEHRU CUSTOM
HOUSE, NHAVA SHEVA,TAL:- URAN, DIST : RAIGAD.
PIN – 400 707.F. No.
S/22-Gen-402/2017-18/AM (I)/JNCH

Dated 26.03.2018Subject:&nbsp;Procedure
to be followed for “one time default intimation” to Shipping Lines by DPD
importers at JNCH – Reg.<pclass="msonormal" style="line-height:10.2pt;mso-line-height-rule:exactly">PUBLIC
NOTICE NO. 49/2018&nbsp; Attention
of the Importers, Exporters, General Trade, Port Terminal Operator, Shipping
Lines / Shipping Agents, CFSs coming under the jurisdiction of Jawaharlal Nehru
Customs House (JNCH), Nhava Sheva and all other stakeholders is invited to the
Public Notice No 36/2018 dated 09.03.2018 regarding operationalization of “one
time default intimation” to Shipping Lines by DPD importers at JNCH. </pclass="msonormal">2. 
In order to relax the norms for advance
intimation for “DPD imports” it was decided that instead of requirement to
submit such intimation each time before arrival of the vessel, “one time default intimation” may be obtained from DPD importers and
submitted to shipping&nbsp;lines through
CSLA [csla@bombaychamber.com] so that default stacking code indicated in the
said “intimation” can be treated as default stacking code by shipping lines.
Accordingly, all the DPD importers of JNCH are advised to submit “one time default intimation” in the
format as annexed to the Public Notice No. 36/2018 in the manner as prescribed
in the format itself.<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" alt="" width="300px">3. 
As per the said Public Notice it was
required to endorse a copy of such “one time intimation” to DPD Cell at&nbsp;dpd.amijnch@gmail.com. However, it is being noticed that in
pursuance of Public Notice 36/2018 dated 09.03.2018, importers are either
sending hard copies of such intimation to CSLA/DPD Cell or sending e-mail
intimation only to CSLA without endorsing e-mail copy to DPD Cell.4.It is being reiterated that DPD importers are required to send “one time default intimation” tocsla@bombaychamber.com&nbsp;endorsing&nbsp;a copy to DPD Cell atdpd.amijnch@gmail.com.&nbsp;It is again
being informed that such “one time
default intimation”submitted
either with incomplete information or submitted without following the procedure
as provided under Public Notice No 36/2018 dated 09.03.2018 will not be approved
by Customs.5. On
receipt of the copy of such “one-time default intimation” by DPD Cell, should
check whether the requisite details are furnished and if found to be in order,
will communicate to CSLA (with copy sent to importer / Customs Broker to the
same email address) for compliance. Immediately on receipt of such
communication from Customs, CSLA will inform to all the shipping lines to take
action as provided under Public Notice No 36/2018 dated 09.03.2018 .6. 
In case of any difficulty, the specific
issue may be brought to the notice of Additional Commissioner in charge of ‘DPD
Cell’, NS-III (email address: dpd.amijnch@gmail.com).Sd/- (SUBHASH
AGRAWAL)Commissioner of Customs (NS-III)

DPD Update: Intimation Method for JNCH Importers

Trade finance can make or break the success of your business. What can you do to prevent finance risks affecting your export business? Our upcoming webinars look at some of the answers.&nbsp;
Trade finance can make or break the success of your business. What can you do to prevent finance risks affecting your export business? Our upcoming webinar looks at some of the answers.&nbsp;
As the world becomes more and more connected, and with advances in technology, trading around the world has become easier. From the biggest corporations to the smallest firms exporting and importing can be managed simply at the click of a mouse.
Platforms like Cogoport&rsquo;s marketplace community help ease the logistical challenges of doing business globally.&nbsp;
&nbsp;However, many businesses face several challenges, including managing trade finance. Getting it wrong can be costly to your business.&nbsp;
<h3>So what risks do exporters have to bear in mind when thinking about their trade?</h3>
<h3>1. The trading environment</h3>
Not everywhere may be as stable as your home market. Consignments can get lost or held up, payments can be delayed or complicated or communications difficult. Before taking on a transaction overseas, an exporter does well to think about and plan for: the ease of doing business due to the efficiency of local systems covering customs, banking and transportation communications reliability in terms of telecoms and shared understanding the stability and transparency of the regulatory environment whether any major players control aspects of the market already.
Solution: As well as conducting due diligence, consider working with an agent or partner who understands the market which you are entering.&nbsp;
<h3>2. Fluctuating finance risks</h3>
Currency volatility has always been a concern for exporters, especially when consignments have to travel a long way or run the risk of delays in port or customs. With high-value shipments, variations of just a few percentage points can represent a significant risk to an exporter.
Solution: Investigate a hedging strategy with your bank or finance partner. You can also attempt to negotiate terms with your consignees that share some of the exposure.
<h3>3. Borrowing Risks</h3>
Borrowing risks, also known as credit risks, are derived from the possibility of financial loss. This is due to failure to repay borrowed funds or meeting contractual obligations. Even if you do eventually get paid, the delay in your cash flow can be a nightmare when you have staff and suppliers to pay!
Solution: Have a solid understanding of whom you are dealing with and their ability to pay on time. Assess their creditworthiness, gather informal intelligence among your contacts to see what reputation your consignee has and price your goods accordingly. Our webinar will also touch on strategies to manage these risks.&nbsp;
Assessing trade finance risks is essential for successful business growth and development. Want to know more in detail about international trade finance and its risks to protect your export business? Join our webinar to get the best information from experts in the market!
<a href="https://cogoport.com/signup" target="_blank" rel="noopener"><img style="width: 968px; height: 563px;" src="https://prod-cogoport.s3.ap-south-1.amazonaws.com/2713a36d511fb707b332ec011bdef06c/cogo-trade-finance-1.jpg" alt="cogo-trade-finance-1.jpg"></a>

3 Trade Finance Risks Exporters Should Beware of

The Trump tariffs have shaken the international trade industry for the worse. But there is more to the story of the current unimpressive global economy.&nbsp;Following decades of globalisation-led growth, the tide has turned. The World Trade Organization (WTO) reports global GDP growth down from 2.9 per cent in 2019 to 2.6 per cent in 2019 and 2020.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a>The ongoing trade war between China and the USA, the two world’s largest national economies, clearly causes pain for exporters. Tariffs and other trade barriers push import costs up, and exporters struggle to find buyers as their products become uncompetitive. Retaliatory actions between the two economic giants have escalated tensions in the past couple of years and contributed to a worldwide slowing of trade.The USA is at its most protectionist in a century, imposing almost 25 per cent tariffs on most of what it imports from China.But reduced export activity is not all because of President Trump’s trade strategy. Other factors have also had an impact on export activity.&nbsp;<h3>It's Not All Tariffs</h3>The Chinese economy is increasingly driven by domestic consumption as its middle class continues to grow and becomes more affluent. China can meet more of its needs from within and become less dependent on imports. And, as Chinese growth has slowed to its lowest for almost 30 years according to <a href="https://www.npr.org/2019/07/15/741735791/chinas-economy-falters-slowest-growth-in-nearly-3-decades" target="_blank" style="color: rgb(74, 110, 224); background-color: transparent;">reports</a>, its demand for input materials and capital goods has reduced.&nbsp;<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" width="auto" style="width: auto; height: auto;"></a>Rising nationalism, often fuelled by concerns in developed markets over globalisation, tends to make some markets more insular. Uncertainty hurts trade, so the unknowns around the UK’s expected no-deal departure from the European Union are adding to the slow down.&nbsp;&nbsp;&nbsp;Global trends can be amplified by local tensions too. For example, shipments to Hong Kong, a key Chinese destination, were <a href="https://www.business-standard.com/article/markets/hong-kong-unrest-is-worrying-india-s-jewellers-shipment-down-6-6-119090400867_1.html" target="_blank" style="color: rgb(74, 110, 224); background-color: transparent;">reported</a> to be down by an additional 6 per cent year-on-year in September 2019 because of the pro-democracy demonstrations in the city.&nbsp;Other trends have a bearing too. Globally, the threat of climate change has focused many people’s minds on the distance their food (and other products) travel. A ‘conscious consumption’ movement sometimes described as ‘locavore’ has emerged and gained traction. It boosts the local production of foodstuffs and reduces imports. Food exporters are hit by the sentiment of an increasingly progressive consumer population.&nbsp;<h3>Localisation and in-country investment offer an alternative</h3>As rising wages in China have forced multinational companies to look elsewhere for lower costs, India, Vietnam, Bangladesh and the Philippines have all been winners. And, as these countries experience growth, their citizens join the ranks of the consuming middle classes. Market entry specialists are thriving by offering a bouquet of services - market research and company registrations, tax planning and legal advisory - to foreign investors.Around the world specific forces are having an impact:<ul><li>In India, the Make in India program encourages companies to establish manufacturing in the country.In the European Union, France and Germany are actively encouraging Foreign Direct Investment with policies that make it easier for overseas companies to set up.</li><li>In Africa, Kenya is positioning itself as the strategic gateway to East Africa and hunting foreign investments.</li><li>Mexico is seeking to reduce its dependency on the USA as an export market. The government of Andrés Manuel López Obrador is inviting foreign investment into the country as a staging post to Latin America.</li></ul>Across the world, the terms of trade and investment are morphing.<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a>Establishing bases in target markets offers a range of benefits. Manufacturers are exempt from import tariffs and may attract tax and other incentives. In-market production brings manufacturers closer to their customers and reduces logistics and other administrative costs.&nbsp;<h3>New Markets Offer New Opportunities</h3>Of course, there are alternative strategic responses to protectionist policies.&nbsp;If they look carefully, exporters may find that there are other demand hotspots, which they’ve traditionally not explored. Rising incomes in so-called emerging markets mean there are millions of affluent consumers driving demand for a host of goods and services. And for new consumers for whom choice has been limited, imported goods—from fridges and fashion to whisky and wines—often hold great appeal as a symbol of their newly-minted status.&nbsp;Across Eurasia, the Belt and Road Initiative (BRI), the largest infrastructure plan on the planet, is rapidly opening up new trade routes by sea and overland. Some are long-lost connections that formed part of the ancient silk route. Others are new networks that form a part of what author Peter Frankopan has dubbed The New Silk Roads.Exploring new markets may offer a hedge against current uncertainty without requiring a fundamental shift in the business model. Other approaches require a greater pivot.As a growth strategy, it requires a different type of business model from the traditional activities of import/export. But, for brave and ambitious exporters who find barriers to trade appearing where in the past none existed, local establishments could be the answer to their prayers.

Global Economy Meltdown - More Than Just Tariffs

The way to economy’s heart is through the stomachs of consumers. Opportunities in agricultural trade exist for both the EU and India.Clove, cinnamon, and pepper once propelled global trade. These were as valuable as gold, so trade in spices was brisk, and it had great cultural and economic significance. New maritime trade routes and partnerships were forged and regional eating habits evolved. European demand was the animating force for commodities trading, and, as the world’s second-largest economy, the European Union (EU) still is.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a>India’s role has been historically important. It was the largest producer of spices, and the trade routes that emerged from the 14th to 17th centuries still exist. It is still a developing economy, but one of the world’s fastest-growing and as it searches for international trade partnerships to sustain its rapid GDP growth, it sees agriproducts as a way to achieve its ambitions.Modern day India-EU food trade presents a huge opportunity for both parties, albeit that the EU market is fiercely competitive and highly regulated – particularly on food products – and India’s is complicated and less rule-bound.<h3>All Eyes on Asia</h3>Globalisation has brought the world closer, and even our palates have benefitted. Foods that were once treasured in a specific region are now being shared with the world. Avocados, Himalayan pink salt, quinoa, cashews and kale are current examples. A wave of Instagram food enthusiasts has given the taste for new foods and added stimulus as their influence spreads across continents.<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a>When it comes to exotic foods demand, Asia is a huge potential market. It is home to more than half the world’s population. Rising disposable incomes and growing food demand have made it a lucrative market for the EU’s food producers. India is at the forefront.The question then is to find the right opportunities.India is still largely an agricultural country. Almost half of its labour force is involved in farming, while the corresponding number in the EU is relatively tiny. The amount of arable land in Europe is declining. This will inflate its demand for food imports – an excellent opportunity for Indian exports, which include rice, jute, lentils, onions, and potatoes. Meanwhile, the EU produces an abundance of wine, barley, grapes and olive oil. Globally, demand for olive oil, a European staple, is set to increase, as awareness of its health benefits grows. While both the production and consumption of wine are expected to stabilise within the EU, appetite for it in developing countries, including India, continues to rise.Other factors contribute. Thanks to the organic food movement, India predicts growing global demand for its spices and lentils. Environmental consciousness will raise awareness of jute as an alternative fabric. The crown jewel of Indian food grains - basmati rice will be sought after as more people switch to gluten-free diets.Trade-in agriproducts between India and the EU are like pieces of a jigsaw puzzle - ready to take shape.<h3>Regional Trade Set to Boom</h3>Exporters from India who have traditionally looked at western markets realise export business opportunities with their regional counterparts. Given the proximity and blooming economies, the countries within South Asia could be trading among themselves at three times the current levels according to a recent report by the World Bank. It seems the EU is by no means the only game in town.<img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" alt="" width="300px">India is already taking advantage of specific export opportunities in five markets which include – rice to Egypt, onions to Dubai, lily bulbs to Taiwan, sesame to Turkey, and turmeric to Japan. It is also assessing regional markets for organic products such as grapes, mangoes, pineapple, litchi, ginger, and okra. The country seeks to liberalise trade in farm products and amplify international commerce.India’s export volumes will grow even if regional focus may shift. It’s also clear that there will be a definite increase in demand for imported European goods. Indian consumers will have agriproducts such as fine wine, olive oil, and other native European produce on their shopping lists. These commodities, once considered luxuries for most Indians, are becoming more prevalent.Opportunities exist for both the EU, the largest trade bloc in the world, and India, the nation that is set to be the most populous by 2024.Spice traders were paid handsomely in past centuries. Tastes may have changed the items in the shopping baskets of consumers, but for importers and exporters of food products, there is still a thriving business to be done.&nbsp;

Aprenda e descubra com a Cogoport

Últimas postagens