American companies are increasing their export markets and adding new countries to their lists of destination. Traditional export markets of Western Europe have now grown to include the newly formed CIS countries, Latin America, the Middle East and Asia. The information superhighway cannot keep up with the rapid growth and the need to develop information and capabilities to service the needs of all U.S. Exporters and to assure them successful and profit- able international transactions.

     The American exporter must be more disciplined when entering a new market in order to reduce the risks and maximize trade profits. The following are five guidelines.

• Establish A Network of Resources
• Carefully Manage the Terms of Sale and Payment
• Execute Pre-planned Logistics
• Know the Document Requirements
• Watch the Insurance Issues

     The exporter needs to integrate all of these areas because one area can be directly affected by the others. Care should be taken before acting on any one matter. The information that one would require to profile the world is not available in any one source. The exporter must rely on a vast network of contacts and sources of timely data and intelligence.

Establish A Network of Resources
      One of the best places from which to start when entering a new market is the Department of Commerce in Washington, DC They provide timely commercial data on most countries in the world.

     The Department of Commerce provides various means of support. They have country desk officers, who maintain daily communication with the US Department of State, US Embassies around the world, Foreign Consulate offices here and abroad and many commercial contacts worldwide Individuals, within the department are experts on specific countries, call, 202-377-4767.

     State and local governments, freight forwarders, bankers, international marketing consultants, accountants, marine insurance companies, local world trade associations and port authorities can be important networking sources for local market and country information.

Some Networking Telephone Numbers:
      Eximbank--(202)566-2117; Foreign Credit Insurance Association-(212) 306-5000;National Customs Brokers & Forwarders association-(212) 432-0050; American Institute of Marine Underwriter (212)233-0550; US Small Business Administration (202) 205-6720; US Department of State-(202) 647-1942; The National Institute for World Trade- (516)582-9102.

Major companies involved in inter- national support services such as AT&T, Sprint, Federal Express and Chemical Bank, to name a few, are also sources for international trade data in various countries. They often have direct experience or they know someone who does or can readily provided the required information.

Carefully Manage the Terms of Sales and Payments
     Banks, freight forwarders and friendly competitors are often excellent assistants on terms of sales. A new market can present a significant exposure here, as each country will have an entirely different set of laws, regulations and practices that have different meanings for terms of sale. INCO Terms, the book published by ICC Publishing, NYC (212) 354-4480, outlines what countries subscribe to these standards and for the terms of sale, which offer common and agreed meanings for the exporter and importer.

     If a country does not subscribe, then, local laws and practice must be obtained and understood in the event a dispute arises. New emerging markets as of Eastern Europe and Latin America should be very carefully watched and surveyed before closing an international transaction and finalizing the terms of sale.

     The key in making a transaction successful in a new market is getting paid, which makes the terms of payment critical. A new market does not necessarily require prior trading experience. Banks may provide sources for customer credit worthiness through their local branch networks. International credit agencies such as D&B (201) 605-6455 and Graydon America (908) 709-9499, are good alternatives at a price.

     Initially, selling on more secured payment terms, such as Letters of Credit and Payment in Advance may be viable options before selling on more relaxed terms. Should competitive pressures force you to sell on an open account, purchasing Export Credit Insurance may give you risk transfer to a third party.

     The US Government, through Eximbank, will provide options, as well as commercial insurance to companies such as the FCIA, Continental and the American International Group(AIG).

     Keep in mind that once the goods are shipped, you will have little influence on the exposures affecting the shipment which makes the wording of terms of sale and payment critical to finalizing the transaction and obtaining all your dues.

Execute Pre-planned Logistics.
      New markets will challenge the best of logistics professionals. New markets will present a different geography, a different physical profile and an infrastructure which may not be matured. Your prior modus operandi of shipping 40" ocean containers may not work in certain countries where [he roads are small and narrow. They may only accept 20" containers or LCL freight only. This change in container size may increase unit costs and hamper your competitive edge.

     Some landlocked countries may best be reached by air and truck only. Some emerging markets such as Mexico arc undergoing a major internal enhancement of their transportation infrastructure. This makes long term planning obsolete. The Packaging, labeling and unionization become critical factors. Materials handling methods in certain countries may be inadequate for handling large unitized pallet loads, forcing the exporter to ship several smaller units that can be handled manually by human labor.

     Warehousing and distribution systems could be lacking, causing the US Exporter to reconsider issues such as packaging, unionization, timing of the shipments and protecting the freight for longer inventory cycles in exposed areas.

     The US Exporter must review and scrutinize the entire distribution chain from point of packaging & shipping to the time it is received by the consignee.

Know The Documentation Requirements      The responsible exporter understands that the document requirements for countries around the world vary greatly. The freight forwarders or shipping agents are typically the best sources for this information.

     Another great source is your customer's clearance agent in the importing country. You should always obtain the names and fax numbers for your customers.

      The typical documents required will be an invoice, a packing list, a bill of lading and a certificate of origin. Other documents include import/export license, insurance certificates, inspection certificates(SGS), NAFTA certificates, consolidation bills and health and sanitary certificates.

     Poor document handling is the chief cause of customs delay and late deliveries to customers. Exporters must know what their needs are before shipping and execute the paperwork or have their freight forwarders handle it on their behalf.

Watch the Insurance Issues
     The marine insurance policy, which would typically provide an "All Risk," "Warehouse to Warehouse," coverage should be controlled by the exporter,

     In some foreign countries, such as Venezuela and Nigeria, this coverage must be purchased in the local markets. There maybe another 20 to 30 countries which have similar provisions. Your local insurance brokers and marine underwriters can advise on the local requirements and assist in arranging the coverage.

     In the local purchase situations, or when the importer is controlling the coverage, contingent insurance should be secured in case the other policies fail.

     The US exporter has vast marketing potentials in new and emerging markets. The opportunities are endless but they pose an array of exposure problems...
      When entering a new market coverage in the following areas should be extended or started.

     Life & Health, Disability, Workers Compensation, Property & Inventory, Inland Transit, General Liability, Automobile.

     Many times the policies written in the United States will give extension privileges for writing coverage's abroad. The insurance companies can assist in providing coverage in host countries.

     Many times, all types of insurance claims for which no coverage exists occur. Review the coverage before the claims occur.

     The US exporter has vast marketing potentials in new and emerging markets. The opportunities are endless but they pose an array of exposure problems. By following the guidelines outlined in this article, the exporter can minimize the exposures and be a successful international trader.

Thomas A. Cook is managing director of FSI Global Logistics/American River International headquarters in Melville NY and an associate editor for the EXPORTER. He can he reached at 516-396-6800..