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Europe may be less familiar than we think.

 

 

 

 

 

 

 

Listen to the Radio by Tom Robinson – a haunting classic single from 1983

 

I have often thought that one of the greatest mistakes a traveller can make is to assume that they understand a country they have only occasionally visited. It actually takes a lifetime to really understand the culture and methods of a country, which is why most of us will never get to truly know more than one.

Regular readers will know that my work requires me to make regular short visits to other places in Europe, something that I consider to be a real privilege. But Europe is bigger than most of us think, and far more varied than one would imagine if one’s opinions were guided by the glib words of journalists and broadcasters who refer ad nauseam to ‘Euroland’ and ‘the Eurozone’ as if this were some kind of homogenous bloc. Bright-eyed young things who leap into jobs with a European responsibility soon learn that the concept of “The Single European Market” is nothing but fantasy. I know from years of getting it wrong that a product that sells in France won’t necessarily find favour in Germany, and vice versa, and it doesn’t matter how well researched the product and indeed the marketing mix may be. Curiously, this often seems to apply to an ever greater degree for products that have a high technical content, or are designed for use by trained professionals.

I am writing to you from Fiumicino Airport in Rome, where I have been surprised to find that I have an hour’s spare time on my hands after (for once!) over-estimating the time I would need to get through the various hoops of reaching my flight home.

My varied travel experiences have led to the creation of my own personal myths and prejudices in my mind about the places I visit. As beautiful and cultured as Italy is, my practice is to allow far more time than I think I might possibly need to catch a flight from Italy, and even then I have on a number of occasions found myself running great distances to reach my gate on time. At the ripe age of 53, I’d rather do any running at the gym in running gear and not in business attire in a warm building, carrying my precious hand luggage.

So as I have a flight at the respectable hour of 12.35, I nevertheless left my hotel in central Rome a full three hours beforehand. When travelling, I like to play a silly game of trying to converse with everyone I meet without reverting to English. In Italy, this usually fails before I even open my mouth, but at least the taxi driver who is taking me to the train station has affirmed that he speaks no English, so I can impress myself with my breath-taking skills of reading the numbers on the meter in Italian, asking for a receipt, and bidding him thank you and goodbye in his language.  Now to buy my ticket!

Technologies are changing things very fast everywhere, so generalisations about how things happen in one place can soon be out of date. At the Termini station in Rome however, there is still a preference for using actual humans to sell tickets, even though there are machines for the purpose, too. Ticket machines can usually ‘converse’ if I can call it that, in any number of languages, but people are way more interesting, if sometimes unpredictable and infuriating.

I learned the hard way some years ago that I couldn’t take for granted that something that works in one European country would also work in another. Having spent several weeks trailing around cities in Germany and Switzerland carrying product samples, I had got into the habit of taking a train into the city with my big suitcase, leaving it at left luggage and travelling by foot or by taxi with just a small bag to visit my contacts. This all went pear-shaped when I reached Milan.

Whereas in other countries, left luggage counters had been automated, and were just a self-service operation controlled by coins, at the starkly beautiful railway station in Milan, the service was (and as far as I know still is) controlled by humans. This is generally a nice thing, but I hadn’t reckoned on the fact that my big suitcase exceeded the maximum weight that the operator was allowed to accept. Damn! It’s only fair that the company employing a guy who has to lift and carry cases all day give some thought to his health and safety, I just wish I had known before I came. So a day spent racing around Milan with an enormous suitcase that the railway authorities deemed too heavy for their employee to carry a few yards taught me a lesson I didn’t forget.

Anyway, back to Rome. Inevitably of course, as that’s where all roads lead. I ask for my ticket in my very best Italian, to which the human promptly responds in fluent English. I lose again.

The efficient express service to Fumiciuno Airport is almost full. A human passes through the carriages to inspect the tickets, she accepts mine and defaces it with the appropriate instrument without a word in any language. We’ll call that one a draw, shall we?

At the destination, there is a machine to check my ticket again, and permit entry to the airport. It doesn’t like my ticket. I try all the well-worn methods of meeting the machine’s approval, flattening the ticket with my fingers, turning it the other way round, moving to another machine. No, it’s not having any.

And when I inspect the ticket, I can understand the machine’s point of view. This is the ticket I bought two days ago, to travel from the airport into town. So where is the new ticket? Moving away from the crowd I check the content of my rucksack to no avail. I had a receipt as well, I tell myself. If I find the receipt, maybe a friendly human will accept it as proof of payment and let me in?

The receipt is buried deep in my wallet, and so is my ticket. So the inspector on the train accepted my invalid, two day old ticket without a second glance, it would seem. Silly human!

I’ve been reading a fascinating memoir at odd free moments during my trip. Rumours of Glory is the life story of Bruce Cockburn, a Canadian singer/songwriter, who I have admired for many years. Bruce and I have so much in common. Except of course that he’s a fine and much admired musician. And his travels are so much more exciting and dangerous than mine. At one point he relates a frightening trip over dirt tracks in a four wheel drive car through a Central American warzone. He was on a fact finding visit for a Canadian charity, and they had an invitation from someone in the military regime to visit the place. Showing the letter of invitation to a very angry and well-armed guard, Bruce and his companions wisely decide to keep quiet about the fact that the guard is holding the letter upside down as he studies it carefully. He declares it to be in order and lets them proceed. Who knows? Maybe that man has a job as an Italian ticket inspector these days.

The airport has one last surprise for me on this trip, and it’s a nice one. Last time at this airport, travelling with a British medical trainer, we encountered a massive queue at passport control, which took way too long to negotiate and almost caused us to miss our flight. After a super-efficient and courteous bag check, (honourable mention to EasyJet) once again I was quickly marked out as an anglophone, I passed through security with similar speed (lost again) and proceeded to passport control, where I could see another massive queue, just like last time.

The only difference was, the airport has recently installed the reading equipment for E-passports, and unlike in certain British airports, it’s working brilliantly. I am through before I know what’s going on. After the machine I pass a very bored looking controller sitting in a kiosk, who is not even sufficiently interested in me to make eye contact. Does that count as another draw?

So time to write my blog, and to grab another coffee, once again served by a human and not a machine. The barista doesn’t like my pronunciation of the word ‘cappuccino’ and gives me a free lesson in communication. A brief exchange that is purely about how terrible my Italian is, but crucially, conducted purely in Italian, so I win. Sorry, but those are the rules.

The musical link is Tom Robinson, a British artist famous in the eighties for a string of hit singles. ‘Listen to the Radio’ is a song that often comes into my head when I’m travelling, especially the line about showing your papers and being polite. It’s a watchword for all regular travellers. Every country has its own rules and regulations, its own way of doing things. When I’m a guest in someone else’s country, I have to accept it. It’s a small price to pay for the privilege of experiencing another fascinating country, and another step in my journey to understand the baffling, varied and rapidly changing little patch of the planet that’s called Europe.

Happy accidents, everyone.

 

 

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Here come the boys from China Town, don’t want no trouble… Judie Tzuke

 

“China Town” performed by Judie Tzuke and band in 1980

It’s great to see the Troubleshooter format back on television. I always enjoyed the original series with the late lamented Sir John Harvey Jones. And now it’s back with Sir Digby Jones, apparently keeping the concept firmly in the Jones’ family. I don’t always care for Digby the politician, but I’m enjoying him in the heat of the business environment. His passion and energy are really making this series unmissable for me, even if his particular obsessions may sometimes get in the way of bringing totally usable advice to the recipients.

In the second episode, Sir Digby heads north to bonnie Scotland, to try out his magic on the Hawick knitwear company. This was a strangely emotional episode that found me empathising with both the advisor and the advisee. I also felt I wanted to be a part of this company’s future, for better or worse. That must make it good television, surely?

Hawick Knitwear make quality clothes in cashmere and wool. Named after the company’s home town, they are one of the survivors of a once thriving local industry that has declined to around one tenth of its original size. In recent years, Hawick Knitwear seem to have performed well. They have chosen a high quality route (and high price, with jumpers retailing at up to £200), introducing their own brand alongside their traditional route of manufacturing for other labels.

“It’s easy to be a consultant,” we are told by one of the company’s managers near the start of the programme. “you don’t have to deal with the consequences, there are no recriminations.” That’s a fair point I guess, but to be fair, the consultant is also expected to make a difference, and Sir Digby is keen to inject his passion for British manufacturing. He’s a man on a mission, and this shows as we sees tensions emerge between the management team and the trouble shooter.

The management style at Hawick Knitwear is cautious, or ‘small c conservative’ as Digby describes it, and it isn’t difficult to understand why. A lot of local competitors have closed down or resorted to importing their products from low wage countries. They have to face problems of investment and training if they are going to survive. The company prides itself on keeping its entire manufacturing process in Scotland, knowing full well they could save money by taking at least some of the process elsewhere. This is not a business that is prone to make rash decisions, and frankly that looks like a blessing when faced with this particular trouble shooter.

Sir Digby takes a visit to their best performing retail outlet, near Edinburgh Castle, one of Scotland’s biggest tourist spots. He is rightly impressed to see the number of foreign buyers in the shop. He discovers that some 40% of the customers are from outside Europe, and of these, the biggest group are Chinese.

Oh no, someone just mentioned that word, and Sir Digby is entranced. His already emotional style begins to go into overdrive. “China – they are your market, they are your customer base!” On what basis he has arrived at this conclusion, no-one is entirely clear.

The company attend a business ‘speed dating’ event nearby, where they meet some buyers for major Chinese retailers. The meetings are positive, and some sample orders are made on the spot. An encouraging start.

But Hawick are still not sure. Their sales director prefers to concentrate on Norway and France, markets with ‘low hanging fruit’ where he believes he can get some quick returns. Sir Digby is furious. “Norway?!” he scoffs, “With a population of what? 10 million? There are 1.3 billion people in China, that’s where you need to be!”

At this point I’m afraid I begin to lose respect for Sir Digby. He seems to have completely forgotten that he is supposed to be there to help the company, and in my opinion is embarking on a propaganda exercise to ‘big-up’ the Chinese market. He is being disingenuous. He has only half listened to what he is being told. He makes a big deal of Norway being mentioned (a country with a small population but big spending power) and casually ignores the fact that France, a country with a much bigger population, is also in the mix. Much more importantly, he trots out the statistics about China’s huge population as if this clinches the argument. The average weekly wage in China is around £80 (US $120). Exactly how many two hundred quid jumpers is the average Chinese consumer going to be buying?

I accept the general point about the importance of emerging markets. China in particular is getting richer every year by around 7-10%, which is very fast growth indeed when you think about it. The Edinburgh shop is being patronised by China’s ‘nouveau riche’, an important and growing market to be sure. But is this really the place for a small knitwear company from a small Scottish town to cut its exporting teeth?

A visit to the industry’s trade association, UKFT, suggests not. They think that Japan might be a relatively easy first market into Asia, an effective springboard into other markets, as well as a pretty lucrative one in itself.

Then the directors make a visit to the company’s owners. The cameras are not allowed into this meeting, but the directors emerge with a decision that makes Sir Digby’s jaw drop. They are not going to invest time and money into the Asia markets, not yet. Instead they are going to focus on Europe.

Now Sir Digby is dejected. His missionary zeal for the markets of Asia has not been heeded. Sharp exchanges of words lead to a partial change of heart from the MD. They will be looking at Asia after all, in view of everything Sir Digby has said. But the first focus will be on Japan, as UKFT suggested, rather than China.

Honours even I think, and I’d also suggest the tale has ended with a sensible outcome. Sir Digby is essentially right that British manufacturers do have to think globally to survive. But they also have to be realistic. For a small company in rural Scotland, markets such as France and Norway are manageable. The small management team can visit these places regularly at little cost in time or money.

Then again, the fact that markets such as China, India and South America are growing rapidly in their consumer power should not be ignored. A business that wants to be a player in those markets in five years needs to be doing something about it now. In my view, a company such as Hawick needs is sensible approach to testing these markets, nurturing them and embarking on plans that will get them a foothold in time. These markets are the future, I don’t disagree. But a company like Hawick Knitwear also has to deal with the present.

 

Happy accidents, everyone!

 

 

 

 

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Running to Stand Still from the U2 Album The Joshua Tree

 

 

 

 

Listen to Running To Stand Still by U2 – staying where we are in exporting is not as easy as some people think

 

 

 

 

Export Weak?

 

“The road to hell is paved with good intentions” as Samuel Johnson apparently never said

Most governments seem to realise that successful exporting is good for their national economy, so invariably take steps to try and boost their country’s share. Here in the UK, it is fortunate that our current government saw fit to reverse its initial commitment to cut funding for export promotion after protests from this blog and many other much more powerful voices.

But does government support for exporting actually work? Some years ago I heard a senior civil servant speak bluntly about the effectiveness of his department. “UK exports last year amounted to … and let’s face it, at least 95% of that happened without any intervention from us.” I never heard of this gentleman again. Perhaps he was swiftly moved on to a role where he was less likely to cause embarrassment by speaking the truth?

A cancelled trip to Italy last week gave me a rare opportunity to attend a UKTI event during what they had declared to be Export Week. Some 120 people rolled up at a hotel to attend an event on ‘Growing Your Business in C & E Europe.’ After being greeted with coffee and pastries, we were admitted to the meeting hall to listen to the words of wisdom.

A senior civil servant addressed us for some 20 minutes to tell us all about himself. I was fascinated to learn that he lived in a small village five miles away, plans to retire in ten years and likes acronyms. Next!

A barely audible presentation complemented by tightly typed lines on a screen that were themselves only just capable of being deciphered from the middle of the room. We were reliably informed, inter alia, that Croatia is a candidate member of the EU, it’s a full member of the EU, it is probably going to join the EU in 2014. I’m all for covering all angles! Readers of this blog will know that Croatia joined the EU as a full member last year (Welcome to the 28th State!). Sorry, but the dull monotone of the delivery and the fact that the speaker didn’t seem to have grasped his subject caused my attention to wander. There were lots of other statistics being fired at us, but as the speaker was wrong about Croatia, how could I know whether to trust anything else?

Then the usual swipe at Europe, of course. “Growth in exports won’t come from Europe, you know. Oh no, these ‘has been’ economies on our doorstep, what possible use are they? That’s last year’s thing, don’t you know? We’ll grudgingly admit to some opportunities in the East of Europe, but as for the rest…”

And this is the crux of what is wrong with UKTI’s thinking in my not-so-humble opinion. They want more exports. Great. They suspect that the growing economies of Asia, South America and Africa are going to provide the main opportunities to up our game. I agree. So their strategy focuses on those growth markets.

This is absolutely fine up to a point. Where UKTI always fall down is in failing to understand that THEIR strategy is not THEIR CLIENT’S strategy. Brazil, Russia, India, China and all are great potential markets for many, but not for all, and certainly not the most obvious markets for the new exporters that UKTI so covets to cut their exporting teeth. Half of our exports go to the EU, and we all have to keep striving just to hold on to that. It makes me cringe when I read comments from supposedly intelligent business people saying ‘Forget Europe’. Are they totally mad?? The senior civil servant who kicked the morning off almost touched on this, when he wasn’t dreaming of his own retirement in ten years. He acknowledged that new exporters were needed to replace the ones who fell off the perch. Businesses fail, close down, downsize and leave the game. Why can these people not see that it’s exactly the same in Europe? The more that UKTI continue to give the impression that Europe is yesterday’s thing, the more they will risk misleading potential exporters, guide them into ignoring the wealthy and accessible markets on the doorstep in favour of faraway places where the rules are different, the prizes potentially bigger, but the risks much greater. It is NOT a case of EITHER exporting to Europe OR the rest of the world, but you could be excused for thinking it was from the various government sponsored messages. If we are to have any chance of hitting Mr. Osborne’s target of £1Tn, we need BOTH!

Luckily things got better. A panel of five exporting companies (well, a banker, an accountant, a travel agent and two exporters of goods to be precise) took to the stage to take part in a discussion. Quote of the day from one of the exporters of real things…

“There are risks in exporting, but the risks of NOT exporting are much greater.”

Brilliant! The first really sensible thing I’ve heard all morning, and a great sound bite. A business that doesn’t choose to export is leaving itself vulnerable to attack from potential competitors from other places who do. And of course, if things go wrong in the home market, due to recession, changes in technology or taste, then the non-exporter has nothing else.

A bit of controversy from the floor as someone dares to ask about the UK’s membership of the EU. One panel member thinks it would not really make any difference to their business if the UK were to leave the EU, while the other four took a contrary view. The chairman invited a show of hands from the audience. I’d estimate that 90% of hands (mine included) went up to express support for the UK’s continued membership. Phew!

Enough excitement for one morning surely? The discussion quickly returned to the banal, with the predictable conclusion that what works for one business won’t necessarily work for another.

Coffee break and time to face the fact that I have mostly wasted my entire morning. The remainder of the programme is hardly any more inspiring. Something about ‘High Value Opportunities’ (no good to me. We’re a little business making little things. Presumably we don’t matter to UKTI?) Followed by a presentation called ‘Next Steps’ and a plug for the next shindig in the series. I know what my next step is. I make my apologies and head for the exit.

Later, when perusing the list of delegates, it’s not hard to see that the event was a typical case of ‘spot the exporter’. Out of 120 named delegates, no less than ten were employees of UKTI, a similar number were employees of other state-funded organisations, a staggering 70 or so were from banks, finance companies or other businesses based on selling services to businesses, presumably only there to seek out potential customers. That left just 30, about a quarter of the participants, who were actual or potential exporters. How much, I wondered, had it cost the taxpayer to host this ‘free’ event, send some 20 state funded individuals to run it, publicise it and, I have no doubt, write about it afterwards, telling their lords and masters what a great success it all was?

Age is turning me into a curmudgeonly old bugger, isn’t it? Poor UKTI. I moan when they don’t do things and here I am moaning when they do. But surely there has to be a better way than this to get their message across? The Chancellor wants exports to double to £1Tn annually by 2020, but the latest figures show them decreasing, both within and outside Europe.

Time for a new approach?

 

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Dubrovnik – Picture courtesy of cesscasawin and http://www.freedigitalphotos.net

I’m not talking about Texas.

This week, little Croatia (population 4.5 million) completed its 18 year journey from war torn state to take its place at the table as the 28^th member state of The European Union. Although there were scenes of celebration in Zagreb, the country’s capital city, Croatia’s accession was a somewhat more sober affair than when eight former Eastern European states joined in 2004.

As Croatia has been struggling to establish itself as an independent state following the violent break-up of Yugoslavia, the countries of the EU have been coming to terms with the ongoing effects of the global credit crisis. Croatia is joining a club that lacks much of the swagger it once had. With unemployment in the Euro zone reaching a record 12.2% this week and many EU states still in recession, this week has hardly been the fairy tale that Croatian people might once have dreamed of.

Croatia has overcome much of the devastation of the four year war of independence, which saw 25% of its fragile economy destroyed as well as the loss of at least 10,000 lives, with many more people being displaced. It ranks at 25 in the EU wealth list (GDP per capita, CIA World Fact Book) ahead of Latvia, Bulgaria and Romania but with an income per head of little more than half of the European average.

Croatia’s President, Ivo Josipović has steered his country towards full EU membership for the last three years, and is convinced it is the right move. “From an economic point of view, there is indeed a crisis, but I think we are stronger together, and that the crisis did not originate from the European Union itself, but rather from the economies of a few specific countries, that is why I think that to put an end to this crisis, we need more Europe and not less Europe,”

What does the accession mean for Britain? Croatia’s beautiful coast line has already made the country a big hit with British tourists, but so far the trade relationship is pretty limited. UK exports to Croatia in 2011 were worth a mere £156 million is 2011, with pharmaceutical products and transport equipment topping the sector list, as is often the case. The UK is only number 17 in Croatia’s list of supplier nations, dwarfed by other EU states such as Italy, Germany and even Austria.

Croatia is pretty accessible for British exporters, too. Eight airlines have direct flights to the capital, Zagreb, the great majority of businesses have internet access and a website and around half of Croatian people speak English. Business visitors report that Croatian business people are often reluctant to share too much sensitive information about their business before meeting face to face, so it sounds like an early visit to this beautiful country is essential for serious suppliers.

The Accidental Exporter wholeheartedly welcomes Croatia to full EU membership, and looks forward to a long and fruitful business relationship.

We would love to hear from companies who are already trading with Croatia, and can offer the benefit of their experience to others. Please feel free to share your experiences here, or contact us via Twitter

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If you work in an exporting role for a British firm, I’ll bet you’ve lost count of the people you have met who look at you incredulously when you tell them what you do. “Exporting?” They sneer. “I didn’t think we made anything to export anymore!”

Oh yes, very droll. If there’s one talent we Brits never lost it’s the ability to self-deprecate. You can try telling these jokers about our automotive sector, where exports are at an all-time record, our burgeoning aviation and pharmaceutical sectors till the cows come home. I’ve tried it, but to a lot of people their mind is made up. Britain is finished as an exporter of goods.

Courtesy of http://www.freedigitalphotos.net

Well, I’m sorry if I’m the bearer of bad news, but the way things are looking at the moment, I fear that the jokers may be about to have the last laugh. Not that there will be much for any of us to laugh about if we don’t do something soon.

When the international trade figures for the final quarter of last year were released, one economist was prompted to comment, “We’re still terrible at exporting.”

I was in London last night for the annual awards ceremony of the Institute of Export, and it was good to see so many young (and some not so young) people striving to acquire the skills that our country so badly needs if we are to thrive in the future. I did a quick straw-poll, asking a few people what they thought about the claim that Britain is terrible at exporting. There didn’t seem to be any sympathy for this point of view.

And by any yardstick, they’re right. In 2011, the UK was the world’s 10^th largest exporting country of goods. Not bad. When you consider that the UK has only the 22^nd highest population of all countries, we’re punching above our weight. On the other hand, we’re the 8^th largest economy in the world, so perhaps not.

And there’s more good news: From 2006 to 2011, UK exports increased by a little under 12%. That may not sound like much, but of course that period covers the global economic crisis that hit world trade hard. Considering that the British economy as a whole showed hardly any growth at all over that period, 12% is a source of some considerable comfort.

OK, So Here’s the Bad News:

Between 2006 and 2011, the UK slipped from number six to number ten in the league table of exporters of goods.

“Ah!” I hear you say, “But that’s because of the BRICS. It stands to reason that the big, emerging economies are going to outperform us in time.”

Well, up to a point, Lord Copper. Of the four countries that have left us behind, one (Russia) is indeed a ‘BRIC’ economy. Another is Korea, also a country that has been industrialising rapidly. But it’s the final two that caused me to ponder. They are The Netherlands and Italy. That’s The Netherlands (population 17 million) and Italy (population about the same as the UK, but in absolute economic turmoil if the press are to be believed.)

And I have to give a special mention for the country that finished 11^th. That would be little Belgium, with a population barely one sixth that of the UK, yet virtually achieving a dead heat with the UK in 2011. We only stayed in the top 10 on the equivalent of goal difference. In fact, The UK had the slowest growing exports among the world’s top ten exporting countries over this period.

So why aren’t we doing better? Over that six year period, the United States achieved 42% growth, putting the country in good stead for achieving President Obama’s aim of doubling their exports. The Netherlands achieved 40%, Germany 32%, Italy 25% and France 20%. We have to ask ourselves why our export growth was not higher.

One thing seems clear to me. It isn’t because of the Eurozone, no matter what our political leaders keep telling us. If four leading Eurozone economies are beating us in export performance, (both in absolute terms and in terms of growth rate), what are we doing wrong?

And before anyone asks, it’s not because of any collapse in our financial services sector, either. I’m talking about exports of goods here. You know, the real stuff that you can actually put on a ship.

Some time ago, I berated our government for cutting the funding to UK Trade and Investment, the agency that promotes British exports and inward investment. It was good to see those cuts reversed late last year. We can always rely on this government to do the right thing, once they have exhausted all other possibilities.

But I confess, I really am stuck for an explanation for why British exports are not doing better. Is it a lack of government support? Shortage of finance? Have we lost the essential skills to really notch our manufacturing capacity up a gear or two? Or are exporters just not trying hard enough?

Something, somewhere is wrong. I’d love to know, dear reader, what you think we need to do.

Happy accidents!

Footnote: I’m indebted to a very knowledgeable exporter I met in London last night, who told me that 67% of all exporting companies became exporters by accident. I suspected it all along of course, but nice to know I’m in the majority!

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Courtesy of Danilo Rizzuti, freedigitalphotos.net

 

“What’s in a Name? That which we call a rose, by any other name, would smell as

Sweet”

William Shakespeare (Romeo and Juliet)

  So how does 0603110000 grab you?!

 

 

 

 

 

 

As I was saying, before I was so rudely interrupted…

Sorry for the protracted silence, everyone. I’ve been busy finishing my first book. I always was a slow reader.

 

If you are an exporter or importer of goods, you need to know the correct tariff numbers for your products. If this comes as a surprise to you, you are not alone as many regular exporters are not aware of the requirement because it is being fulfilled for them by their shipper.

This is leaving a lot to chance. The law says that it is the responsibility of the business that is exporting or importing the goods to ensure the correct code is used, and you could be legally liable if the wrong code is applied. You or your customer could also be paying the wrong amount in import tariffs.

For most products, it is not too difficult to identify the right code. Although there are several thousand codes in the system, they are arranged in a logical system which makes it easy to find the right one, according to the form and function of the product.

 – What is a commodity code and what is the difference between a HS and other codes? 

Whenever a business exports or imports goods, they have to identify the specific product code for the items. These codes are variously called tariff codes, Integrated Trade Tariff, TARIC, HS, CN, as well as a number of other variations used in different parts of the world. The reason the code is important is because it helps to determine any tariff payments that are payable as well as any controls that are applicable to trade in the goods.

Almost all countries operate tariff codes that comply with the Harmonised System (HS). All countries use the same six digit codes, to which they can add up to six further digits in order to refine the definitions according to local requirements.

– How important is it to know your products’ tariff codes?

Very important! An exporter or importer who uses the wrong code for their goods can receive a heavy fine as well as having their shipment confiscated.

It has been reported that 30-50% of entries are misclassified. At the very least, an incorrect entry can cause delays to the shipment and possibly the allocation of the wrong import tariff, which may lead to the business paying too much to the customs authorities.

Lots of exporters leave the classification to their shipper. This is a risky thing to do, as the exporter stands to take the responsibility in the event of a mistake. Exporters should know the codes for their products that are applied by the authorities in their country.

Companies who buy or sell to other European Union countries will also need to use these codes to complete their Intrastat returns

Exporters will often need to know the correct tariff code in their customer’s country as well. Many countries now require pre-shipment information before the goods are sent, and the local tariff code will usually be among the information required. Exporters should usually liaise with their customer to find the correct classification.

– I had never heard of commodity codes, how do I find which apply to our products?

 For UK based businesses, HMRC has a website and online service to help identify the correct codehttps://www.gov.uk/trade-tariff

The tariff is divided into 21 sections that define items according to their physical constitution and their function. In most cases, finding the right code is fairly straightforward, but sometimes there may appear to be more than one code that could be applied. The gov.uk website (the service that has replaced the old Business Link) provides guidance on how the tariff should be interpreted https://www.gov.uk/classification-of-goods

The complete tariff table is online here https://www.gov.uk/trade-tariff/sections and in most cases it is quite straightforward to find the appropriate code for your product. This website also shows the import tariff rates that are applicable.

If you are still in doubt, HMRC offers a telephone advice service. Call 01702 366077 during office hours. This is not a legally binding service. You will need to provide a full description of the goods including their components, materials and purpose.

If there is still any doubt, then a legally binding (BTI) decision should be requested from HMRC using form C103.

– Do codes apply only to goods? How about services?

The codes only apply to physical goods. But restrictions and controls on international trade in services do apply. UK based companies who are planning to provide services internationally can get guidance from the HMRC website https://www.gov.uk/international-trade-in-services-import-and-export-regulations

This article first appeared on Sunny Sky Solutions blog, an excellent source of support and information for anyone who is interested in trading with South America.

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Here’s a first, readers…

The Accidental Exporter is going to take a look at, well at avoiding accidents, among other things.

In comparison to many exporters, I’m probably a bit cosseted in my exposure to risk. Given that most of my travels are within Europe, and I’m able to use business hotels most of the time, I think I tend to be a bit blasé about the possibility that I might be involved in an accident, get sick or be a victim of crime.

Evaluating the chances of a mishap is never easy. For example, if I climb a ladder to fix a tile on my roof, statistically speaking I would surely be far less likely to incur an accident than my window-cleaner would, who is up and down ladders every day. On the other hand, the window cleaner knows a lot more about ladder safety than I do.

It’s the same with travelling, really.

I try to follow a few common sense rules:

 

 

Preparation

I make time to ensure that I am adequately prepared for every trip. Keeping a suitcase that is permanently packed with routine items such as washing gear, small change, travel insurance and other documents saves a lot of time and leaves me with fewer things to remember. It helps if I write out a check list of things I need, and tick them off when I finally pack my case.

Equipment

For regular travel, it’s a mistake to skimp on cheap suitcases. I’ve found to my cost they are a false economy, and that there’s nothing more annoying than retrieving your bag from the luggage carousel only to find it has a broken clasp or zipper. Most suitcases only get used a few times a year, but for regular travellers, the cost of well built cases pays for itself many times over.

Back-up

I have two copies of the details page from my passport. One copy, I carry separately from my travel documents. The other, I leave at home. If my hand luggage is stolen, I’ll have a copy in my suitcase when I seek help from the consulate. If I lose everything, I can contact home and get the essential details. I do the same with my travel insurance, credit cards and itinerary details, and carry some money separately from what I have in my wallet.

Medication

I’m lucky I suppose, as I don’t get sick very often. My medication consists of nothing more than the occasional aspirin, but people’s needs are different. Anyone who does need to carry medication with them needs to be sure of its legality in the countries they are travelling to (and through) and if in doubt, should also carry some description in the appropriate languages.

Personal preparation

I find It helps to be mentally and physically prepared for a journey. I try to sleep well the night before, avoid excessive alcohol and stick to a balanced diet. Also, knowing that I am prepared for the meetings I have planned helps me to relax.

Arrival

Statistically, the time when one arrives in an unfamiliar place is when one is most vulnerable. If arriving by air, it helps to have a clear plan of how the next leg of the journey will take place. I find that websites such as www.tripadvisor.co.uk are a useful source of information that is updated by other travellers.

Itinerary

It may not impress superiors, but I always strive to keep the programme of appointments manageable. There is so much scope for unpredictable delays when travelling in an unfamiliar place, as well as the usual distractions that occur during a meeting. Especially when visiting potential customers for the first time, I believe it’s so important to make a good impression. Arriving late is only slightly less insulting than leaving early, in particular where a meeting is proving particularly productive. Having to tell your host that you have to leave to get to our next meeting is a major faux pas, especially in circumstances where you host knows full well that your next meeting is with his keenest competitor. Aim for quality, not quantity.

Down time

OK this one is a bit of a pipe-dream, I admit. Spending twelve hours or more every day rushing between appointments, making presentations, reviewing action points only to arrive at my hotel and spend half the night catching up on emails that I haven’t had time to answer during the day is not the best preparation to arrive bright and breezy at the first appointment the next day, is it? So why do I keep doing it? Seriously, while it’s natural to want to make the most of every trip, it can become counter-productive to take on too much. Try to be disciplined enough to take it easy at least once a day. Bear in mind leisure when arranging a trip. Make time to use the hotel fitness suite or swimming pool if there is one, otherwise at least take a walk outside. Phone family and friends and watch a film or listen to music. I take my MP3 player and mini-speakers everywhere I go, they go a long way to protecting my sanity.

Do try and remember this last point. If you find yourself stuck in a hotel room with a sandwich from room service on one knee, your lap-top on the other as you rush off replies to the last few emails before sleep finally overcomes you, remember that you have a duty to your employer, your family and most of all to yourself to take care of your physical and mental health.

Mind how you go. And may all your accidents be happy ones.

 

 

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What makes an effective sales person?

 

Is it a skill that can be learned, or are people born to it?

 

I’ve been pondering these questions after discussing them inconclusively with a friend over a curry a few nights ago.

 

I suppose I have worked in sales or sales-related roles for most of my adult life, ever since, as a spotty teenager, I sold flat-packed furniture to an unsuspecting public at weekends while completing my education. Looking back, I think that experience was really quite formative. It was a menial job, but the manager was someone I found to be inspirational, and the opportunity helped me to uncover talents I didn’t know I had.

 

Effective selling is firstly about communication. The manager at the furniture shop once told me “God gave you two ears and one mouth. That’s because he wanted you to listen twice as much as you talk!” And there’s an important rule, I think, for anyone in a selling role (and that covers a lot more people than just those who have the word ‘sales’ in their job title!) Listen to what the customer is saying. It’s so tempting, especially when there is a sales target to reach, to try and brow-beat a customer into buying what you have. But I learned a long time ago, that while I may be able to sell something to somebody that they didn’t really want, if I do then most likely I will never sell them anything again.

 

In most export roles, I think it’s fair to say that relationship building is paramount. When I talk to a potential customer for the first time, I very rarely come away with a sale, mainly because I am not trying to sell them anything, except for the idea that they might like to do business with my company. In international sales, there are cultural barriers to overcome, prejudices and preconceived ideas. Patience and persistence are my watch words.

 

Some knowledge of the country I am selling to can come in handy, too. I seem to have a lot of customers who are fanatical about football, and keeping up to date with their local teams and their progress has become a bit of a habit. Understanding the local economy and national affairs can be useful too, I’ve found, as well as knowing a bit of local history.

 

I’m not saying that my way is the only way or even the best way to approach export sales. All I am saying is it works for me.

 

Can someone learn how to be successful in export sales? Yes, I think so. But much of that learning will inevitably take place in the field. And success also requires an open mind, a willingness to learn and ideally, a genuine interest in other people.

 

A theology student once went to his tutor and asked him if he could recommend a good book on humility.

 

“Yes!” Replied the tutor, “Mine!”

 

And that I think is a crucial lesson for anyone in international sales. The day I think I know all there is to know about effective export sales is the day I stop being an effective export sales manager. The first rule to succeeding in this game is understanding how little I really understand.

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Courtesy of Evgeni Dinev

 

 

 

 

 

 

 

The journey starts here!

The story of one van (white), one man (brownish pinkish colour), one thousand miles (colours vary)

Follow the journey on twitter @accidex  #manwithavan

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I don’t know about you, but I am getting a bit fed up with the way the British government is trying to pin the blame for our feeble economy on the Eurozone. Even more than that, I am tired of the way that supposed experts in the media keep on falling for this rubbish.

Now an article in that hallowed journal – The Economist – gives more than a nod to this fallacious argument, describing the act of blaming the Eurozone for our double -dip recession as a ‘reasonable excuse’. Well yes, it would be if the UK’s trade with the Eurozone had been falling. But it hasn’t. So it isn’t.

I just checked our export statistics online, mainly because I am a bit sad. And do you know what? Surprise, surprise, the  value of British exports to the Eurozone in 2011 leapt ahead by no less than 11.1%! Figures for the current year only cover the first two months, and show that our exports were down in January, but up in February (compared to the same months in 2011).  Source – UKtradeinfo –  but I had to extract the export figures for the individual member countries.

The consequence of this is of course obvious. Far from being a drag on the British economy, our exports to the Eurozone are one of very few real success stories last year. And that, if it had not been for this stellar performance, our miserable economy would actually be in an even worse place. Please stop trying to place the blame Mr. Chancellor, and actually take some responsibility for your failing policies.

And my question, as a simple bag-carrying exporter is this; why is our government lying to us? And why is it that pretty well every journalist covering this story in the press and on television, is falling so easily for this quite silly and easily disproven untruth?

That many of the economies of the Eurozone are in serious trouble is not in question. Neither is the notion that, by being tied to a common currency, they have their own peculiar set of problems to wrestle with in sorting out their affairs. But the excuse offered by our chancellor, that the performance of the Eurozone economies are substantially to blame for our own lacklustre economy, is clearly just bunk.

Isn’t it about time that supposedly serious journalists started checking out the government’s claims for themselves, instead of accepting their excuses without question?