FindItMore | In today’s globalized and modernized world, wherein we enjoy liberated trade policies and faster modes of transportation,the importance of the import and export business has undoubtedly become more evident.It now affects the daily lives of every individual, the profitability of every business, and the success of every economy around the world because a country can’t produce everything that it needs on its own due to labor, equipment, climate, and resource factors. Thus,what one country lacks, others who have plenty can fulfill,giving rise to global economic interdependence and bigger trade markets.
According to the World’s Top Exports, the top product categories include electrical machinery and equipment, computers, mineral fuels and oil, vehicles, gems, and precious metals, plastics, optical and medical apparatus, pharmaceuticals, organic chemicals, iron, and steel among others.
It means that from the chair you’re seating on, to the computer you’re using to read this infographic, and the table it is placed on, the terms import, and export are relevant because it is probably made up of components from multiple countries.In fact, according to Materials Today, your computer is likely manufactured using different materials that are imported from more or less sixteen countries.
While locally, as of 2016, the Observatory of Economic Complexity (OEC) declared the Philippine export economy as the 38th largest and most competitive export economies worldwide. Moreover, according to the Philippine Statistics Authority, as of May 2018, the total Philippine export reached $15.22 billion while the imports reached $9.46 billion.
Not to mention, the Philippine Export Development Plan (PEDP) 2018-2022 strategies and programs are already being implemented by eighteen government agencies(led by the Department of Trade and Industry) to boost the performance of the Philippine export economy and reach the $122-$130 billion target by the end of year 2022.
Given these digits and data, no wonder why many businessmen aspire to venture into the lucrative industry— even newbies who barely know the twists and turns of the business and risks like committing mistakes that could cost them a fortune.
An example is non-compliance with trade regulations may result to surcharges, fines and forfeitures under the Republic Act No. 1937, also known as the Tariff and Customs Laws of the Philippines.
Although to ‘err is human’, learning from the past mistakes of others is still best. You don’t need to make your own mistakes just to get it right the second time around.
Having that said, here are the key takeaways of the infographic from Excelsior Worldwide Freight Logistics Corporation that details the common mistakes in the import and export business:
- Lack of knowledge in import and export regulation
- Hiring an incompetent or unexperienced customs broker
- Not declaring the correct value in customs
- Unfamiliarity of Incoterms
- Failing to properly insure goods
- Not verifying the legitimacy of the supplier or buyer of the product
To learn more about the common mistakes in the import and export business, check out the infographic below.