Exp Order 1

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Processing the export order

Processing the export order
The export cycle
Export
Opportunitie
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1. Setting up the deal

Once you have established your sales contract, by either being
National
in possession of an international purchase order or a
Exporter
Development documentary credit stating you as the beneficiary, you are
Programme
now in a position to process the order. There are a few steps
(NEDP)
you should go through when processing an export order.
However, you must first wait until the deal has been properly
established before committing your resources to the order.
Case Study:
As you can see, John Motsa has received an international
purchase order from Bill Jones and has been advised by his
bank of the documentary credit made available to him by
Bill's bank in London. John has checked the documentary
credit (L/C) according to the checklist and has accepted the
credit without amendment.
2. Shipping the goods

Once the deal has been set up, you should take the following
steps:
Read the purchase order/documentary credit very

carefully and take note of the requirements of the
buyer. If there are any pre-shipment actions that must
occur, these activities must take place before you book
the freight and load the container. Pre-shipment
activities could include pre-shipment inspections,
health inspections or product analyses, all of which
must be carried out before the goods have been packed
for shipping. If any of these inspections are required,
make arrangements with the appropriate service
providers and obtain the necessary certification before
shipping the goods.
You are now in a position to complete your F178 and
have it attested with the bank. As an F178 declaration
is a commitment by you to the Reserve Bank that
funds will be brought into the country in exchange for
goods, you should not make this declaration until you
are sure the deal is going to happen.
You are now ready to pack and label the goods. At this
point, you can contact your freight forwarder to make
a booking on the next available carrier, or on the
carrier offering the service you require. You will
furnish your forwarder with a freight forwarders
instruction and an attested F178, and request him to
arrange for customs clearance and transport. He can
also arrange for marine insurance if required. You will,
at this point, arrange for him to collect the goods or
deliver the goods to his warehouse yourself.
Your freight forwarder will deliver the goods to the
carrier and obtain a transport document as proof of
receipt. He is now in a position to arrange for customs
clearance, which will require the submission of a
customs bill of entry DA 550, an attested F178 and a
transport document (in the case of air, road and rail
exports). He will then hand over the transport and
insurance documents to you.
You are now in a position to issue your commercial
documents, namely, the commercial invoice and
packing list and can assemble you export
documentation. This will include your commercial
documents, transport document, insurance document,
as well asthe verification documents issued by third
parties.
Case Study:
Based on the L/C, John completed his F178 and had it attested
at his bank. He then applied to the Directorate: Plant
Protection and Quality Control for the issue of a phytosanitary
certificate. Based on his declaration, the certificate was issued.
He then went to the Johannesburg Chamber of Commerce and
arranged for the issue and authentication of a certificate of
origin. John was now in a position to ship the goods. He
contacted his forwarder, made a booking on the next available
flight to London and sent the forwarder a freight forwarder's
instruction, along with his original attested F 178. At the same
time, he arranged for his assistant to deliver the honey to the
forwarder's premises at Johannesburg International Airport.
The forwarder handed the cargo over to South African
Airways and was issued an Air waybill. A DA 550 was
completed and submitted, along with the F178 and Air waybill
to Johannesburg International Airport Customs. Customs
clearance was obtained and the forwarder issued an insurance
certificate according to the information in the freight
forwarder's instruction. The forwarder then handed over the
Air waybill, insurance certificate, F 178 and DA 550 to John.
John was now in a position to issue his packing list and
commercial invoice. He now had all the documents required
by the L/C.
3. Getting Paid
Once all documents are ready and completed in accordance
with the documentary credit, (or if not using a documentary
credit, in accordance with the purchase order), you are now in
a position to present the documents for payment. In the case of
documentary credits, you will submit the documents to the
negotiating bank, (usually your bank), which will check the

documents, ensuring that they are in accordance with the L/C,
and make payment to you. Of course, if selling on an
acceptance L/C, the bank will accept your drafts, and you will
receive payment at maturity of the draft.
Case Study:
John carefully checked all his documents against the L/C and
was satisfied that everything was in order. He noted that he
only had two days after shipment within which to present his
documents to the bank. He went to the bank and presented his
documents to a bank official, who checked them against the
L/C. Everything was in order and the documents were
accepted. John then signed a Form E, which cancelled his
F178 obligation, and allowed the bank to buy his US dollars.
The bank deposited the rands into his account two days later.
John had just completed his first export order.
The bank sent the documents to the issuing bank in London,
which in turn has handed them over to Bill Jones. Bill, in the
meantime, has taken receipt of the honey, based on an airway
release issued by his bank, as the documents have taken
longer than the goods to get to London. Bill now has the
honey in his warehouse and John has been paid.
4. Follow-up and service: The key to future success
The most important part of your export market development
process has now arrived. It is sometimes more difficult to
secure a follow-up order than it is to achieve the first order. It
is vital, at this point, to get feedback from the buyer as to
whether you have met his needs. It might be necessary, to plan
a follow-up visit to secure your position with the buyer and

check to see whether his needs have changed. The chances are
that one of your competitors has taken action against your
entrance by possibly offering the buyer better terms of
payment. It is vital that you develop your market intelligence
in order to take whatever action is necessary to keep your
market and increase your market share.
Case Study:
John has received enquiries from Germany which look
promising and has just arranged another visit to Europe. He
has made arrangements with Bill Jones to attend the launch of
his honey at one of the main retailers in London.
The following set of documentation will assist you with
completing the required documents for processing your export
order:
Speeches
Trade Statistics
Modeling
Media Statements
Exchange control declaration

Phytosanitary certificate
Certificate of origin
Forwarder's instruction
Air waybill
Certificate of Insurance
Bill of entry/export
Commercial invoice
Packing list

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Home

Processing the export order

1. Setting up the deal

2. Shipping the goods

Read the purchase order/documentary credit very

negotiating bank, (usually your bank), which will check the

a follow-up visit to secure your position with the buyer and

Exchange control declaration

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