This article will focus on activities that are indicated by the sonorous phrase "outsourcing (from the English phrase outsourcing - outer-source-using -" use of an external source / resource ") of external economic activity." We will explain in detail what it is and what companies are involved in this.
What is FEA outsourcing?
Outsourcing of foreign economic activity refers to the transfer of non-core functions or certain business processes to the organization of another company that specializes in relevant areas of business. This service has recently appeared on the market and includes a wide range of services. Signing an outsourcing contract for foreign economic activity can be very profitable.
These may be services: searching for suppliers, drawing up and concluding international contracts regarding the purchase of foreign currency and making payments under contracts, freight forwarding services, customs clearance of goods, delivery of goods to customer warehouses, as well as the transfer of established documentation.
Security guarantees
The company provides full foreign trade outsourcing with appropriate paperwork, drafting and signing of a foreign economic contract, and also provides security guarantees for support throughout the transaction from the start to the final stage. Such a distribution of business tasks allows customers to focus on core industries of the company and to promote the main product on the market in order to ensure higher competitiveness.
Today, outsourcing services are considered the most popular in the field of foreign economic activity. Enterprises whose activities are associated with the wholesale and retail sales of goods produced abroad, or using foreign materials and raw materials, can optimize their costs radically. What is a customs broker? About it further.
Main difficulties
It often happens that employees of a certain company do not have sufficient experience in the field of foreign economic activity and encounter many nuances when issuing permits for imported goods. Documents can have different design, as it depends on the group to which the goods belong. It can be: certificates of origin, quality certificates, invoices confirming the shipment of goods (the so-called bill of lading), export declarations, price lists, pricing documents.
Quarantine certificate
The presence of a quarantine certificate is necessary as confirmation that the product (of plant or animal origin) is not infected with pathogenic microflora. Each country has its own licensing system designed to protect the interests of state carriers. A special permit is required to cross the borders of a country. Companies that offer their services in this direction are involved in the regulation of such issues.
Outsourcing of foreign economic activity is now very popular.
What is included in transaction support?
To begin with, it is necessary to designate all participants in the process of tracking the cargo. The chain begins with the manufacturer, then the seller, the forwarder. Then the goods are transferred to the carrier, the services of an insurance company are required, and only then there is contact with the customs authorities in the countries of export and import of goods. Further, the goods fall into the warehouse for the storage of goods and are certified.Depending on the choice of the company, these processes will be carried out by the company itself or by an outsourcing organization or a customs broker.
When independently servicing the supply chain, the company uses its own resources, hiring at certain stages of the relevant specialists, for example, a customs representative, but at the same time, all the features of the passage of customs procedures and transportation of goods, the organization’s specialists must clearly understand and understand what they consist of. Accordingly, it is important to make a competent choice of a contractor for the successful completion of all processes.
Operations for the delivery of goods
Briefly consider the operations that occur during the delivery of goods:
· The selection of goods and suppliers;
· Reaching agreement on the terms of the transaction and concluding a contract;
· Establishing routes and conditions for the delivery of goods;
· Signing a contract for freight forwarding;
· Search for reliable warehouses with an adequate pricing policy;
· Determination of the place of registration of customs documents and the location of the customs representative;
· Transaction insurance and transportation of goods;
· Registration of permits;
· At the time of shipment of the goods it is necessary: to carry out qualitative and quantitative control of the characteristics of the goods; check the correctness of filling in the accompanying documents; control the passage of customs clearance;
· Pay for the goods in the currency determined by the contract;
· Customs clearance;
· Posting of goods.
The chain is quite long and requires certain knowledge and skills in various areas of foreign economic activity. To determine the optimal transportation route, it is necessary to take into account many factors, as well as the specific features of the customs of different countries, seaports, railways and customs terminals. A third-party company solves these problems on behalf of the customer.
Outsourcing FEA services are very diverse.
This may be the support of the entire supply chain, as well as the implementation of individual operations. Such services provided under an agency agreement suggest that the goods remain the property of the customer during the entire transaction. There is no risk of losing the goods, even if the agent shows dishonesty. This approach to the separation of business processes allows the customer company to focus on the main tasks in the business, and transfer all foreign trade operations to the company to the outsourcer, whose specialization includes foreign economic activity.
What is the activity based on?
Joint activity in this situation is based on an agreement that sets out all the conditions: preparation of the necessary documentation for the signing of the contract at the expense of the customer, purchase and insurance of cargo, international transportation, certification, customs clearance and delivery of goods to the customer’s warehouses. The transfer of goods is carried out accompanied by documents that confirm the volume of the goods and other significant characteristics. For outsourcing services in support of foreign economic activity in accordance with the contract, a commission is calculated, calculated as a percentage of the price of the accompanied cargo.
The cost of outsourcing FEA
The size of the commission depends directly on how labor-intensive a particular transaction will be, what the frequency of deliveries will be, what kind of warehouse work is supposed to be carried out, what is the invoice value of the goods and other circumstances. The size of the commission is negotiated upon signing the contract. Here it must be said that with long-term and regular contacts with customs services the same organization is easier and faster to pass customs control. In this regard, the advantages of cooperation with regular partners are quite obvious.This makes it possible for the customer to engage in core activities, increasing the profitability of his enterprise and not to worry about organizing transportation of goods or raw materials. At the same time, the customer is able to use outsourcing from stable companies to allow himself to reduce the cost of goods and accelerate capital turnover.
Outsourcing of foreign economic activity in Russia has been used not so long ago.
The organization of import traffic is possible in two ways: importing goods, in which customs clearance is carried out on the customer or as an importer acts as an outsourcer.
What exactly is doing?
As a rule, the services of companies engaged in outsourcing of foreign economic activity include:
- full outsourcing of the customer company;
- the possibility of representing the interests of the customer at national and international exhibitions;
- selection of foreign partners;
- Negotiating and negotiating supply terms;
- the possibility of concluding foreign economic contracts;
- calculation of the preliminary cost of goods;
- delivery of goods to certain countries;
- customs clearance;
- services for the delivery of goods to the customer’s warehouse;
- execution of accompanying documents;
- advising individuals and legal entities on issues of foreign economic activity;
- resolution of conflict situations regarding complaints in case of short deliveries, marriage, reassortment, return of funds to customers.
We examined what outsourcing of foreign economic activity means.