Guest Editorial
Minimizing your export risk

by Diane Lewis

Diane Lewis is vice president of market access and regulatory affairs, U.S. Dairy Export council. She contributes this column exclusively for Cheese Market News®.

One cool, rainy morning in July, a container-ship sat idling in the North Sea, in a port outside Rotterdam. The cargo on this ship included more than a dozen containers of a U.S. dairy product — close to a million pounds and worth well over $1 million — waiting to be offloaded.

A customs official appraised the paperwork, examined a few of the crates, and noticed something amiss. It was a tiny detail, to be sure, but one that gave him pause. The packages lacked an identification mark, a labeling requirement that shows the European Union-approved plant number and the country of origin. Without this mark, the consignment had to be detained, denied entry into an overseas market for which a sale had already been made.

Other companies have had similar experiences.

On July 3, a U.S. exporter put three containers of dairy ingredients on the water, heading south for Colombia. Three days later, after the Independence Day holiday, the company secured an AMS Sanitary Certificate for the shipment. And a week after that, the exporter received its import permit from Colombian authorities.

Unfortunately, these steps occurred in the wrong order. Colombia requires an import permit to be issued before the shipment leaves the United States. When the ship reached its destination, the customs agent immediately recognized the mistake, and the consignment was rejected. This error could not be rectified. The sale was lost.

This year, U.S. exporters have suffered more detained shipments due to paperwork issues than ever before. And it isn’t just novice exporters that are getting tripped up. Even experienced exporting companies are running into snags.

Export sales rely upon paperwork, much of it quite technical. Every sale must be accompanied with copious documentation, with all the t’s crossed and the i’s dotted correctly. Regulations change constantly, and exporters have to be vigilant to keep up.

But the two stories above have one thing in common: In both cases the problems were entirely preventable.

The best tool for navigating the technical aspects of export is the U.S. Dairy Export Council’s U.S. Dairy Export Guide, an up-to-date, online encyclopedia of market access and regulatory requirements for nearly 70 markets. Besides spelling out the particulars on documentation, the Export Guide also includes a broad range of technical requirements, such as microbial limits, permitted additives and compositional standards.

In both scenarios described above, the correct export requirements were clearly identified and easily accessible in the Guide. While USDEC can and has successfully assisted exporters in resolving entry problems, companies can avert a lot of aggravation, expense and wasted time by consulting the Export Guide before sending off every shipment.

(USDEC members have access to the U.S. Dairy Export Guide for free; it’s a valuable benefit of their membership. Non-members can sample the Guide through an online demonstration at www.usdec.org.)

Note that it’s not enough for the CEO or the vice president of sales to be aware of the Export Guide. It’s also critical that the people on the front lines — the ones handling the transactional documentation — regularly consult the Guide for the latest updates. When consignments are sent out without the proper documentation, shipments get waylaid, staff spends its time scrambling to recover and sales can get discounted or lost completely.

The wrong lesson learned is that export sales are too risky and should be avoided, when a little attention to detail, painlessly provided by someone else, can result in profitable, repeat business.

Sometimes the Guide can even help resolve unforeseen trade constraints. Earlier this year, a shipment of U.S. demineralized whey powder was detained by Chinese custom officials due to the trace presence of coliform bacteria. Using the Guide as a reference, USDEC staff and the exporter properly interpreted the regulation and worked with Chinese officials to demonstrate that the consignment did, in fact, meet their requirements. The shipment was released, and the sale was completed.

As the U.S. dairy industry’s primary resource for exporters, one of USDEC’s objectives is to lower the risk associated with export sales. The U.S. Dairy Export Guide allows exporters to focus less time on regulatory matters and more time on all the other aspects of an export sale: customer relations, pricing, quality, product differentiation and service.

Documentation can be part of the transaction risk, but it should not be a barrier to sales. It can be challenging to keep up with, but an easy solution is available.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.