E-commerce boosts trade potential

Business Reporter
WITH the growth of e-commerce and the increasing ease of conducting business electronically globally, it is not surprising that more businesses are choosing to trade across borders to take advantage of the revenue-generating potential that export and import of goods offers.
While there are numerous exciting business opportunities as international markets continue to express interest in local African products or services and vice versa, international trade remains a complex process, which if not managed correctly, can create unfavourable situations for businesses and their partners, particularly small to medium enterprises trying to take advantage of the global market.

This is according to Mr Oliver Facey, vice-president of operations at DHL Express Sub-Saharan Africa, who says it was important for businesses to be aware of the diverse trade regulations, and implications of these, when moving shipments across the various borders in Africa and abroad.

Mr Facey points to the latest World Bank Doing Business 2013 report which revealed that Sub-Saharan Africa boasts the largest improvement in the rankings from last year, as business regulatory practices in various countries converge and they narrow the gap with their European counter-parts.

However, the region is still the worst performing, highlighting the challenges that local businesses face in terms of understanding 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 their profits and expected transportation service levels.

Mr Facey offers a few pointers to local businesses to assist with a smooth shipment process.
“First and foremost, customs usually require the importer or exporter to register as an importer or exporter before transacting internationally,” says Mr Facey.

“Following this, businesses need to ensure they have the correct paperwork. Typical documents that are required include 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 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, financial and service implications if these details do not correspond.”

Mr Facey says 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 or exports and restrictions”, he says.

“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 products which require a phytosanitary certificate or medicine and scheduled substances which usually need a medical control council certificate.”

He adds 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 by supplying extra data or forms.”

The speed of delivery 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, cost, speed and complexity of the shipment.”

And due to the complexities of the procedures and processes, Mr Facey points out it is advisable to seek assistance from appropriate 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 customers through some time very difficult procedures.

“By fully understanding the processes and terminology involved with entering the different markets, African businesses can build a long-term foundation for even more successful international trade.”