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Chapter 15
Processing the export
order

Topics covered in this chapter
• Contract of affreightment – terms of delivery – Inco terms
2000
• Factors determining choice and description of inco terms
• Receipt of export order
• Processing the export order
• Presentation of documents to the bank – check list
• Computerised export department and software

Introduction
This chapter examines a key element in international trade – the task
of processing the export order from its placement to its execution. It is
often a computer driven export/logistics office. A particular area on
which to focus by the international entrepreneur to fully understand the
range – 13 – of the inco terms is available, and the merits of each and
the situation in which each is best adopted in the export contract.

Contract of affreightment – terms of delivery – inco terms
2000
The basis of a price quotation depends on the correct
interpretation of the delivery trade terms which is examined closely
in this chapter. Study figure 15.1 which provides an analysis of
each of the thirteen terms, and note the seller and buyer
responsibilities key points summarized on page 399. Shippers are
encouraged to obtain from the local chamber of commerce ICC
inco terms booklet no 560.

Factors determining choice and description of inco terms 2000
Essential to understand the six key factors determining the choice of
inco terms and also the salient features 15.2. A very comprehensive
description is given in the text. Focus particularly on the long
established FOB, CFR, CIF and EXW and additionally on the growing
popularity of the combined transport inco terms identified in the text
and increasingly used in logistics transits.

Receipt of export order
Six areas are examined which require special attention on receipt of
the export order together with the nine check points listed. A further
key factor key factor is the eleven areas to examine prior to order
acceptance. A strategic focus must be followed reflecting the
companies export policy.
Processing the export consignment
A comprehensive order processing sequence embracing 37 stages
has been examined in depth. Important to understand each stage and
why it arises.

Presentation of documents to the bank – check list
An in depth analysis which must be understood to lessen payment
problems. Note the three check lists – documents preparation – 21, sea
transport consignment – 10 and export handling letters of credit – 16.
Comprehend the twelve reasons for delays in delivery or dispatch.
Obtain ICC – UCP publication no 500 or UCP no 600[2007]
Computerised export department
Most export/logistic departments are computerised – note the nineteen
benefits listed. Study closely the comprehensive software case study of
Exportmaster System Ltd and note figures 15.3 to 15.8. Visit their
website.

Key points
Ensure you understand the following:
• Contract of affreigtment – terms of delivery – inco terms 2000 –
Important to fully understand.
• Factors determining choice and description of inco terms 2000 – a
key area to comprehend in order to devise an effective strategy on
a company/product/country basis.
• Receipt of export order – essential to focus on each area to devise
an efficient and cost effective logistic supply chain management
system.

• Processing the export consignment – again comprehend
each element of the processing.
• Presentation of documents to the bank – check list –
Particularly important to focus on areas resulting in payment
delay and measure to remedy them.
• Computerised export department – especially cost effective
area examined and extensive range of software.

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Ch15

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