International trade generally begins with inquiry and quotation. The export quotation mainly includes: quality of the products, specs, special packaging requirements, quantity, delivery date, shipping methods, material used, …etc.

Quotations in common use include : FOB (Free On Board), CNF (Cost & Freight), CIF (Cost, Insurance and Freight)…etc.

Buyer and seller will further confer on all the details in relation to the order in the wake of both have agreed the offer. The purchase contract will be literally signed follow up the negotiation. Both should achieve agreements on the contents of product name, specification and item, quantity, price, packing, origin, shipment period, payment, settlement method, claim, and arbitration during the contract signed. And all the agreements will be written in purchase contract, which means the export procedures officially begin. In most cases, the contract will be made and executed in duplicate by and between seller and buyer. One is held by the buyer and the other is held by the seller.

There are three most common payments in international trade: Letter of Credit(L/C), T.T., and direct debit.

1. Letter of Credit：There are two kinds of L/C: Clean Credit and Documentary Credit. Documentary Credit is the L/C with some documents such as B/L, Certificate of Insurance, and so on. Clean Credit, on the other hand, is the L/C without any documents. Briefly speaking, L/C is a binding document that the payment of goods will be transferred to the seller from buyer’s bank after delivery. However, it is important to notice that the shipment period should be within the L/C expiry date, and the L/C presentation period should be posed earlier than the L/C expiry date.
   L/C is th most-often-use payment in international trade. The date of issuance should be certain and precise. Several government-run commercial banks in China can open L/C such as Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, and etc. (The opening charge is 1.5% of the currency cooe amount among those major banks)
2. TT Payment：TT is a payment made on delivery via foreign exchange. A buyer should transfer the payment to the foreign exchange bank designated by the seller first, and then the amount should be transferred to buyer’s account within certain expiration.
3. Direct Debit：Direct debit is a payment method allowing seller’s bank to collect amounts of goods from buyer’s bank after delivery.

Stocking of merchandise plays a crucial role during the whole procedures. Every detail must be implemented thoroughly following the contract agreements. As following are the major checkups.

1. The quality and specification of goods：should be carefully checked according to the contract.
2. The quantity of goods：the quantify must meet the demand of contract or L/C.
3. The period of merchandise stocking：According to the L/C, the seller should arrange the shipping in order to successfully deliver goods within the expiration date.

The forms of packing would be picked by different material goods（carton, wooden case, fabric bag）. Each packing form requires different packing requests as well.

1. Regular export packing standards：Packed by the standards of the international trade practices.
2. Special export packing standards：Packed by client’s unique requests.
3. The packings and shipping marks of the goods：should be carefully double checked in order to meet the L/C clauses.

Customs clearance is extremely complicated but crucial. The trade might be cancelled once the customs clearance could not be through successfully.

1. Any legal testing exports should have export testing certificates.

   Sampling：Inspection authorities will appoint specialists to the storehouse for testing and examining the goods.

   Inspection：The samplings will be taken back to the laboratory, including quality, specification, packing, and so on will be seriously identified to examine if the goods totally match the descriptions of contact (or L/C). The inspection methods include sampling inspection, instrument analysis, physical testing, sensory testing, microbe testing, and etc.

   Certificate issuing：Every product listed in the export commodities must be tested qualifiedly in order to receive release document. (or being attended "release" to the application for export instead）

2. Customs Clearance should be filed by a custom agent. The following are the required documents for customs clearance: Packing List, Invoice, Letter of Attorney, Export Exchange Control Declaration, Export Contract Copy, and Exports Inspection Certificate.

   Packing List is a specification of encasement offered by exporters.

   Invoice is a certificate of origin offered by exports.

   Letter of Attorney is an mechanism document to entitle customs brokers, allowing them applying to the customes for companies or individuals that they are not able to do by themselves.

   Export exchange control declaration is a document issued by foreign exchange authorities, filed by exporters, to certify the exporters can refund export drawback.

   Exports inspection certificate is issued by export and import commodities inspection and quarantine authorities or other designated inspection originations, which is the general description of the certificate of various kinds of exports and imports, the inspection certificate, or other certificates. That is a valid certificate to deal with the responsibilities between buyer and seller, claim issues, arbitral award, and the proof of lawsuit. Meanwhile, it is also a required certificate when the party applies for customs clearance, tariff, and other preferential duties.

During loading, the methods of loading can be determined by the quantity or sizes of the articles, and to insure for the articles according to the requirements of the purchase contract.

1. Full Container Load (FCL)

   Container Specifications：The most common Dry Containers worldwide are:

   20 feet x 8 feet x 8.6 feet, called 20-foot Container;

   40 feet X 8 feet X 8.6 feet, called 40-foot Container;

   40 feet X 8 feet x 9.6 feet, which is often used in recent years, called 40-foot High Cube Container.

   name

   size

   20-foot Container

   Inner volume is 5.69 meters X 2.13 meters X 2.18 meters, and the gross weight is17.5 tons averagely. Volume is 24-26 steres.

   40-foot Container

   Inner volume is 11.8 meters X 2.13 meters X 2.18 meters, and the gross weight is 22 tons averagely. Volume is 54 steres.

   40-foot High Cube Container

   Inner volume is 11.8 meters X 2.13 meters X 2.72 meters, and the gross weight is 22 tons averagely. Volume is 68 steres.

   45-foot High Cube Container

   Inner volume is 13.58 meters X 2.34 meters X 2.71 meters, and the gross weight is 29 tons averagely. Volume is 86 steres.

   20-foot Open Top Container (or Top Loading Container)

   Inner volume is 5.89 meters X 2.32 meters X 2.32 meters, and the gross weight is 20 tons averagely. Volume is 31.5 steres.

   40-foot Open Top Container (or Top Loading Container)

   Inner volume is 12.01 meters X 2.33 meters X 2.15 meters, and the gross weight is 30.4 tons averagely. Volume is 65 steres.

   20-foot Flat Bed Container

   Inner volume is 5.85 meters X 2.23 meters X 2.15 meters, and the gross weight is 23 tons averagely. Volume is 28 steres.

   40-foot Flat Bed Container

   Inner volume is 12.05 meters X 2.12 meters X 1.96 meters, and the gross weight is 36 tons averagely. Volume is 50 steres.

   
   

   By the material of control box：Aluminum Alloy Container, Steel Sheet Container, Fiberboard Container, Fiber Glass-Reinforced Plastic Container.

   By purpose：Dry Cargo Container, Reefer Container, Dress Hanger Container, Open Top Container, Flat Rack Container, Tank Container.

2. Groupage Container：Charge by the exports volume weight in general.

As market practices, the relevant details should have been reached agreements about insurance when both sides signed the purchase contract. The most common insurances include Ocean Marine Cargo Insurance, Overland and Air Transportation Post Insurance. Among all, the Ocean Marine Cargo Insurance Clause covers two kinds insurances : insurance covers basic risks only, and insurance covers additional risks.

1. Insurance covers basic risks only includes Free from Particular Average-F.P.A, With Average or With Particular Average- W.A or W.P.A, and All Risk-A.R. The coverages of F.P.A are：goods are all breakage caused by natural disasters in the ocean; goods are damage or breakage during the process of loading, uploading, or transshipping; general average sacrifice, contribution and expenditure; goods are all or partially damage caused by the cargo ship is upon the rocks, stranding, sinking, collision, fire, or explosion. The W.A is a basic insurance of Ocean Marine Cargo Insurance. Besides the risks of the F.P.A, the W.A. also covers the risks from natural disasters, including harsh climate, thunder and lightning, tsunami, and flood, according to the insurance clauses of the People’s Insurance Company of China (P.I.C.C.). The A.R. fully covers W.A. and additional risk.
2. Additional RiskAdditional Risk includes General Additional Risk and Special Additional Risk. General Additional Risk covers theft, pilferage and non-delivery , rain fresh water damage, risk of shortage, risk of leakage, risk of clash and breakage, hook damage, risk of contamination, loss and/or damage caused by breakage of packing, risk of mould, damage caused by sweated and/or heating, risk of odor, and so on. Special Additional Risk covers war risk, strike risk, and so on.

Bill of Lading（B/L）is a document signed and issued by shipping company, allowing importers to take delivery goods and to sell foreign exchange settlement, in the wake of the every required procedure of customs clearance had been carried out by exporters.

The copies of B/L, signed and issued as the requirement of L/C, generally is made in triplicate. Two are held by exporters for filing export drawback. One is sent to importers to apply for taking delivery goods.

For taking delivery goods shipped by sea transportation, importers should have to show the original of B/L, Packing List, and Invoice, which are provided by exporters.

For taking delivery goods shipped by air transportation, importers only need to show the fax copies of B/L, packing list, and invoice.

Export-import company should produce documents（Packing List, Invoice, B/L, Certificate of Origin, Certificate of Export Foreign Exchange Settlement, and so on.）exactly following the clauses of L/C, after the delivery. And also the company can settle foreign exchange with those documents within the expiry date of L/C.

Besides L/C, Telegraphic Transfer (T/T), Demand Draft (D/D), and Mail Transfer (M/T) are also the methods of foreign exchange settlement. T/T becomes the most commonly used because of the rapid development of electroniclization (Enterprises in China enjoy export drawback of preference.)

1. Draft

   Bill of Exchange is a binding written order, allowing one having the draft unconditionally to request a fixed sum of payment from another at a certain future date.

   In international trade, mostly requests the documentary draft, which is a draft with B/L or other shipping documents.

   As follows are some issues should be noticed while making a draft.

   1. Identify the origin of draft: A draft should clearly indicate its origin, the issuing bank, and the opening date of L/C, if the payment is by L/C.

   2. Following the clauses of L/C to fill in payer if the payment is by L/C. A draft by collection, its payer and the exporter should be the same.

   3. The payee of a draft and the negotiation bank usually are the same if the payment is by L/C. A draft by collection, the payee and collecting bank should be the same.

   4. In practice, a draft should be made and executed in duplicate, both are equivalences. If One of two is paid, the other is automatically prescribed.

2. Bill of Landing,B/L

   B/L is a certificate and given to consignee, signed and issued by ship company or its operator agent, to certify the certain goods had been received and will be delivered to the designated destination. Among all documents offered by buyer to seller, B/L is the most important one of all, and it also the certificate of title to the goods. Therefore every item in B/L must be tally with L/C (ex. Types of B/L, consignee, port of destination, number of original B(s)/L, freight and charges, No of Pkgs or units, goods description, and so on ) while making B/L.

   In practice, foreign buyers always require “Clean and Shipped B/L, and Blank B/L.” As requested, it is important to be careful of loading. “Breakage” or “unsuitable packing” will be shown on the B/L, if the original receipt had already remarked it. This is so-called “Unclean B/L”, which most likely will be rejected by banks. B/L is made in duplicate in general, but it could be made in triplicate or more if carriers require. Both copy B(s)/L and original B/L are equivalences, but the rest of B(s)/L will be automatically prescribed as long as one of them had been used to take delivery goods. Please note that Back Date B/L and Advanced B/L both are falsified B(s)/L made and colluded by carriers and shippers. This acts will cause serious consequences once been exposed. No one is allowed to act this way in international trade.

3. Insurance policy and insruance certificate

   Insurance Policy and Insurance Certificate are the contracts agreed between insurer and insured. Insured can file a claim with them when the insured goods covered by the insurance are damage.

   Insurance Policy is a formal contracted document issued by insurance companies. As follows are the must-remarked details in the policy, which are the title of insured, and the descriptions of insured goods including items, quantity or weight, marks and numbers, shipping method, coverage, place of receipt and delivery, insured amount, duration of insurance, the full clause of the coverage, responsibilities and rights of insurer and insured.

   Insurance Certificate is a simplified contracted document issued by insurance companies. Except the full clause of the coverage, responsibilities and rights of insurer and insured will not be marked down; other contents of the certificate are the same with those of the policy. Both are equivalence. Even so, insurance companies practically would issue insurance policy rather than insurance certificate.

4. Commercial invoice

   Commercial Invoice or Invoice is a payment note sent by exporters to request payment from buyer. It is also the certificate for both buyer and seller to deliver/receive goods, to keep account, to collect on the bill or pay the bill, to declare at the customs, and to file the tax. An invoice is a document without fixed form, but typically might list the invoice’s number, issuance date, export contract number, the number of L/C, the title and address of consignee, marks, the descriptions of item,specification, quantity, packing, unit price, total amount, place of receipt and destination, and so on. The contents of an invoice should be listed by the purchase contract, or should be listed rigidly by the clauses of L/C when the payment is by L/C. Furthermore, it will be an invalid invoice without consignor's signature.

5. Certificate of origin

   It is a document to certify the place of origin or production of the goods. It also aims to provide import customs for identifying the origins, which the customs can tax them by different rates. Some countries are restricted to import goods from other certain countries; in such cases the certificate of origin is necessary to identify the origin of goods. In practice, certificate of origin is often signed and issued by public surveyors in exporting country, or industrial and commercial organizations. In China, it is signed and issued by China Quality Certification Centre forImport and Export Commodities or China Council for the Promotion of International Trade.

6. Certificate of inspection

   Different kinds of inspection certificates are to certify the quality, quantity, weight, sanitary of the goods. In China, certificates of inspection generally signed and issued by China Quality Certification Centre forImport and Export Commodities. It is also allowed to signed and issued by export-import companies or production factories when there is no compulsory requirements in the contract or L/C. No matter which organizations produce the certificate, the required titles and the inspection results must correspond to the clauses of the contract or L/C.

7. Packing list and weight memo

   Both Packing List and Weight Memo are the additional documents of the invoice. Packing List is elaborately listed the full descriptions of the item, patterns, specification of every package for importers and their customs to check the delivery goods. Weight Memo is mainly designed for primary product, making prices by its weight, to remark the weight of every article.

8. Generalized System of Preferences，G．S．P.

   Generalized System of Preferences (G.S.P) is a tariff preference, given to products especially industrial products and semi-products from developing countries. At present, including Japan, Canada, Australia, New Zealand, the EU members, and so on, totally 19 countries provide China for G.S.P. GSP Certificate of Origin is required to apply for tariff preference while we export to above countries.