Jason Clain

1. Territorial specialization: International trade takes place basically due to geographical specialisation. Every country specialises in the production of goods and services in which it has a specific advantage.For example, India has specific advantage in the production of jute and tea. Therefore, India exports these commodities to U.K. India imports steel from U.K. which U.K. can produce at a lower cost than India. 2. International competition: Producers from many countries complete with another to sell their products. Therefore, there is intense competition in international trade. Here the quality, design, packing, price, advertisement, etc., all play a significant role in deciding the winner in the market. 3. Separation of sellers from buyers: In international trade sellers and buyers belong to different countries. They may have no chance of ever meeting one another. Therefore, they have to depend upon middlemen for transactions. 4. Long chain of middlemen: The procedure of international trade is very long and complex. It is very difficult for buyers and sellers to perform all the formalities themselves. They require the services of expert middlemen such as, indent houses, forwarding agents, clearing agents, foreign exchange banks, etc. 5. Mutually acceptable currency: The currencies of importing and exporting countries generally are different. Therefore, it is necessary to find out a mutually acceptable currency. Generally, dollar and pound sterling are selected. These currencies are known as hard currencies because they are acceptable all over the world. 6. International rules and regulations: Businessmen engaged in international trade require knowledge of international laws and trade restrictions. 7. Government control: The government of every country exercises control over imports and exports for national interest. 8. Several documents: A large number of documents are required in international trade.

Airway bill is issued by air carrier of goods on receipt of goods after completion of export customs formalities of the country. Shipper obtains airway bill once after handing over cargo to them. Since the cargo reaches by air and transit time is too less compared to sea shipment, a set of airway bill is sent along with the cargo for immediate reference on transit and for import customs clearance at destination port by importer. Once after completion of customs formalities at load port customs location, cargo transfer manifest (CTM) issued by IATA agent along with airway bill and other required documents for transportation submits to air carriers. Original airway bills are issued in quintuplicate which is meant for carrier, importer, shipper and additional copies. MAWB is Master airway is issued by main carrier of goods on receipt of goods from a freight forwarder to deliver at destination as per agreed terms. HAWB means House airway bill issued by a freight forwarder on receipt of goods from shipper agreeing to deliver goods at destination.  A, a freight forwarder acts as a carrier legally accepts cargo from an exporter X agreeing to deliver cargo to Y at New York. A issues Airway bill to X on receipt of goods after necessary export customs formalities. A after receiving goods from X transfers goods to C who is a main carrier of goods. While transferring goods to C, A obtains an airway bill from main carrier C agreeing to deliver cargo at New York. Here, the airway bill issued by A to X is called house airway bill and the air way bill issued by C to A is called Master airway bill.

Advantages of electronic commerce over traditional commerce are as follows: 1. Instant worldwide availability.  2. A streamlined buyer-to-seller relationship. 3. Reduced paperwork. 4. Reduced errors.  5. Time and overhead costs. 6. Reduced time to complete transactions. 7. Easier entry into new markets. 8. New business opportunities.  9. Improved market analysis. 10. Wider access to assistance and advice. 11. Improved product analysis. 12. The ability to streamline and automate purchasing.

Letter of credit is an assurance given by the buyer’s bank to remit the amount to the seller through seller’s bank on maturity, as per the terms and conditions of document based on the contractual agreement between buyer and seller. Now in simple words, If LC opened on your name, you will receive amount though the buyer’s bank on the agreed time. All Letter of Credits for export import trade is handled under the guidelines of Uniform Customs and Practice of Documentary Credit of International Chamber of Commerce (UCP 600). There are various types of letters of credits like Revocable, Irrevocable, Confirmed, Unconfirmed, Clean & Documentary, Fixed, Revolving, Transferable, Back to Back etc. Most common and safe LC is Irrevocable Letter of Credit.

Essentially, in export transactions, the consignee represents the intended receiver of a cargo shipment. The named person or legal entity having the right to claim the merchandise from the carrier at destination, and is generally recognized as the legal owner for customs purposes. In international representation or distributorship relations, the consignee is the holder and re-seller of merchandise who receives payment in the form of commission or a discount as and when sales are made but does not have to purchase the goods in advance.