EXPORT SHIPPING
Export shipping is a subject about which the average American house knows but little, and herein appears to lie the cause of the loss of much foreign trade. This is especially true of trade with other than English-speaking countries. But the real fault lies farther back than in the shipping department.
The trouble starts in the sales department. Export business is undertaken without special preparation, and an attempt is made to apply the methods used in handling domestic trade. Special instructions in regard to packing, for instance, are ignored because the American thinks he knows more than his customer in a foreign land.
Before export business is even attempted, the sales department should become thoroughly familiar with conditions in the country with which it wishes to do business. Some man in the department should study the customs regulations, the descriptions necessary, the kind of packing needed, and the size of package best adapted to the country. Above all, he must study the desires of the trade, and conform to them, if he expects to make and hold customers.
Special importance is attached to the question of packing and describing the goods. No matter how unreasonable the request of the customer or the foreign salesman may seem, it should be complied with, for it is made for some good reason. A request of a merchant in Omaha, ordering dry goods from Chicago, that goods ordinarily packed in a large case be packed in small oblong boxes, might very properly be ignored; but not so if the customer is located in a South American republic. There, if the goods are to go to the interior, they must be transported over the mountains on the backs of pack mules.
Besides making the packages of suitable size, goods for export must be packed to withstand hard usage, and must be well protected against the elements. Goods must be fully and accurately described in order that they may pass the custom house. The dimensions of each package must be shown on the shipping bills, for freight rates are based on the space occupied in the hold of the ship, rather than on weight.
In a recent address on trade conditions in the Latin-American countries, Wm. Harley Porter, Deputy Captain of the Port of Cienfuegos, during the occupation of Cuba by the United States government, made some very pertinent suggestions on these questions, some of which are published by permission—as follows:
To secure South American trade, we must first train salesmen. They must make an exhaustive study of the different South American tariffs and at least know Spanish. They must be willing to accept instructions as to shipping, and be powerful enough to insist that they be carried out literally. And it would be a good thing for them to take a kindergarten course in carpentry and blacksmithing, so that they would not continue the stupid, expensive blunders of American houses in the packing of goods.
I don't know how to drive that last statement home hard enough. Our consuls plead with our exporters, and our Government distributes volumes freely on the subject, yet there is no apparent improvement.
I confess that until I had some first-hand experience, I supposed that the packing evil was a convenient sort of filler, with which Consuls padded their reports for want of better material.
In order to fit out the custom house of Cienfuegos, Cuba, with new office furniture, we placed an order amounting to nearly one thousand dollars with a Chicago house that brazenly advertised that it made a specialty of export business. Their booklet was encouraging, and the prices really low. So we ordered roll-top and flat-top desks, cashier's desks, office chairs, tables and card cabinets, and then worried, for fear that the goods would not arrive before the end of the fiscal year, then rapidly approaching, in which event, our furniture appropriation would revert to the island treasury.
Six weeks from the day the order reached Chicago, the goods left New York—time enough to have had them come from Hawaii. With the goods came a single invoice. The vouchers in triplicate, which must be filled properly before the account can be paid by a governmental department, had been thrown aside as of no use. To protect the exporter, a voucher was drawn, for the ship reached port on June 30, the last day of the fiscal year. Several dollars were wasted in cable messages to expedite the return of new invoices, and the goods were unpacked.
Not one piece of furniture, save a few chairs, was found whole. No American, in the States, would have accepted the goods. We had paid for them. A letter of remonstrance brought back a churlish answer, written in a cocky American spirit of superiority, to the effect that possibly some one outside could tell that house something about packing their own goods, but they would be greatly surprised to meet such a person.
The trouble lay in the thinness of the packing cases. Goods are loaded into a ship by casting a rope sling about their middle, by which they are hoisted up and let down, often with a run, into the hold. Our desks, without sufficient outer protection and not being built on the principle of a truss bridge, naturally collapsed. The cases were none too good for a railway journey, and were certain to be damaged at any Central or South American port because, in nearly every case, unloading is done from the ship to a lighter, and from the lighter, by main strength and awkwardness, to a wharf.
I cannot recall one instance in which American houses carried out instructions literally. I believe that there is a great future for an American exporter who will let the man on the ground do his own thinking, and take it for granted that he knows what he wants and how he wants it. The exasperation of a man who is weeks or months away from the markets, and who finds that substitution has been practiced, or his goods so packed that destruction was plainly invited, cannot be adequately described by a man on my income.
We bought a typewriter in New York, one time, for two reasons: We could get the liberal discount, allowed the government if we bought direct from the maker, and we could evade a 25% duty if we received it through our custom house and not through another. Also there was a line of steamers from New York to our wharf.
Some five weeks after placing the order, we were notified by an express company in Havana that it had accepted for our account a typewriter, and that when the duty, plus accrued express and forwarding charges, amounting to $45.O3, were paid, it would be dispatched in our direction.
We were out $40.03 because some fool shipping clerk had insisted on trying to do our heavy thinking. We had given him the name of the steamer by which the machine was to be shipped, but he had discovered, in some way, that steamships will not make a bill for less than a metric ton. That, he doubtless learned, would cost us $5.00. The package only weighed about 30 lbs., so he started it off by express. His brain did not carry far enough for him to learn that only one American express company crossed the Florida Strait and naturally chance took it to another company. Two changes were made in express companies before the box reached the coast and the package sauntered about in our beautiful Southland for more than a month before it landed in Havana.
Had any Spanish merchant been subjected to the invariable annoyance which fell to our lot when we endeavored to patronize American houses, he would have given up in despair and remembered the adage of the burnt child, forever.
And, unfortunately, the carelessness of American shippers often costs the foreign merchants good, hard dollars. Tariffs in Latin-American republics are fearfully and wonderfully made, and there is nothing that a pin-headed government employe enjoys more than inflicting a fine for a slip in complying with a little red tape.
Here is a case in point. A large house in Mexico City bought a carload of chairs over here, and with the order sent the shipping forms prescribed by the Mexican government. A very explicit letter was sent also, saying that consular invoices would be provided by their custom house broker in Laredo, who would receive the goods at the border, but that the shipping forms must be filled out, each package numbered with a serial number on the forms. Full description involved, of course, a statement as to the kind of wood used, so that the duty might be easily adjusted.
The goods, however, were simply consigned as so many bundles of chairs, weight so much. The shipping lists were ignored. The innocent receiver of those goods was fined both because they had not been properly described and because the weight was grossly understated. It cost the Mexican house $800 and when the American was asked to settle the charges caused by carelessness, or pig-headedness, he merely answered that he was not going to settle any bills with the Mexican government.
The Mexican firm settled—it had to—and posted every importer in the republic in the matter, so that not only will that American house not sell any more chairs in Mexico, but Americans generally have been given another black eye.
There is a good reason for careful custom regulations, and the exporter should know that they are partly for his protection. For instance, they usually require that a certain number, generally ten per cent, of all packages shall be opened and compared with the shipping list. If these packages, chosen at random, are correct, the consignment is delivered. But if any variation is found, fraud is assumed, and every package is thoroughly examined, usually with more or less damage.
It is customary for English and German firms, in the packing of small articles, to use different colored pasteboard boxes, which are often decorated with pictures indicating the contents. For instance, in a large packing case containing a stock of gentlemen's furnishings, all collars will be in boxes of one color, socks in another, cravats in another, etc. The large case is lined with tin, by the way, and after packing, the tin joints are soldered around the top. Here is the English system: First, the small boxes, individualized as much as possible; then heavy wrapping paper, then a tin lining inside of an outer wooden casing, the latter being well made and reinforced with iron straps. Last of all, directions and addresses are stenciled in large, clear block letters. The Germans often use oiled paper between the tin and the inner packages, so that even if the tin is punctured, the oiled paper will resist the sea air, which invariably injures delicate fabrics.
The American idea seems to be to put as much as possible in a large, thin box or a poorly bound bale. The European, whose agents study conditions on the ground, knows that much interior transportation in Latin America is packed by pack mule, and therefore uses medium-sized oblong boxes, two of which make a good load.
I cannot emphasize too strongly the necessity for careful description of goods to pass them through a custom house with the least inconvenience. Mixed consignments must pay the highest duty assessed against anything found in a lump or poorly described quantity. If you deal in bolts, for instance, you may not merely say 1,000, 3×2×⅜ bolts, but you should say whether they are cotton, linen, or woolen. They have to know, before they can assess duty.
Instead of a ringing peroration about American pluck, progressiveness, and other non-essentials, let me give you some shipping rules, if you are going to have a try for South American trade.
Secure shipping list forms beforehand and find out if consular invoices are needed.
Pack your goods in small packages, for you will pay freight on metric tons and they are based on cubic measure and not on weight.
Pack well, for tons of stuff will probably lie on your cases.
Give each package a serial number and describe it by that number, on the shipping forms.
If your goods can be damaged by sea water, use tin-lined cases.
Your invoices should show not only number, measurement, and exact contents of each package, but their gross, tare, and net weight, for in many cases the container must pay the same duty as the contents.
Be sure that your forwarding agent is reliable, for the law allows him many charging privileges if you are careless in providing for contingencies.
Contract, if you can, for through transportation and get from the transportation companies the requisite export manifests to accompany shipment.
Make triplicate invoices, one to accompany the goods and two to be mailed to the consignee. One of these will be turned over to the custom officials, so in case the invoice sent with the goods fails to come through, and that often happens, the triplicate can be accepted. Without an invoice your goods cannot leave the ship, and I know of cases where cargoes have been held awaiting invoices for eight weeks.
And, in conclusion, remember that sentiment is not the foundation for foreign trade. If we sell abroad we must do so on merit and by foreign systems—not our own.