Presented by Roger Stuart Held & Associates Inc. N. Kansas City, Mo

UNDERSTANDING RISK Knowledge & Education Communication Techniques ASK Questions - NEVER Assume

DON’T LET RISK SCARE YOU AWAY NO Transaction is risk free Controlling risk leads to success Higher risk transactions need to produce higher revenue

TYPES OF RISK Collection for products sold Poor or Incomplete Pro Forma Invoice Ability to comply with sales contracts Ability to comply with letter of credits Short shipping of goods Improper Export packing Proof of goods shipped Shortage/damage/non-delivery claims Restricted or illegal Exports/Denied parties List/Prohibited Countries

CONTROLLING & DEFINING RISK THRU INCOTERMS What are Incoterms – Trade terms Incoterms are NOT credit terms or freight terms & do not determine title The Incoterms Publication Clarifies responsibilities of the buyer & seller When Incoterms are used Chart of Responsibility

Matching credit terms with Incoterms EXW & FCA – Cash in Advance/Open Account – NEVER Letter of Credit CIF & CIP – Best for OVERALL control DAP & DDP – Higher Risk CONTROLLING & DEFINING RISK THRU INCOTERMS (continued)

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK EXW

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK FCA

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK FCA

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK CPT

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK CIF

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK CPT

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK DAT

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK DAP

PROFORMA INVOICES MUST BE VERY DETAILED – LACK OF DETAIL CREATES HIGH RISK DDP

CARGO INSURANCE Ocean carrier’s liability: $500 Air carrier’s liability: $9.07 per pound (airport to airport) Protect financial interest against: Theft Shortage claims Damage claims Non-delivery claims General Average claims

CREDIT INSURANCE

UNDERSTANDING RISK IS FIRST STEP TO CONTROLLING RISK

TO MINIMIZE RISK – DON’T BE AFRAID TO ASK QUESTIONS! FREIGHT FORWARDER INERNATIONAL BANKER U.S. COMMERCIAL SERVICE U.S. SMALL BUSINESS ADMINISTRATION KANSAS DEPARTMENT OF COMMERCE OTHER FEDERAL OFFICES

INCOTERMS PUBLICATIONS