Indonesia Continuing Safeguard for Cotton Yarn

As my posting regarding safeguard for cotton other than sewing thread, Indonesia has applied a safeguard regulation since June 11, 2011 until three years later or on June 5, 2014. Now, this year is the last year for this safeguard rule.

However, in fact, according to investigation from government during applying the rule, the importation of cotton yarn other than sewing thread still in increasing trend, which taking detrimental impact to the companies in Indonesia. If the additional duty of safeguard to be removed, the disadvantages impact will be more increased.

Because of that reason, Government necessary to take the rule to be continued. The last result Government issued the new rule of safeguard for cotton yarn other than sewing thread. This rule has been issued on May 28, 2014.

The new amount of additional duty excluding the common duty is different from the last rule. Here the difference of additional duty between the old and new regulation:

On  2011 to 2014:

The first year: IDR 40,687/KGM.

The second year: IDR 38,144/KGM.

The third year: IDR 35,601/KGM.

On  2014 to 2017:

The first year: IDR 28,065/KGM.

The second year: IDR 25,522/KGM.

The third year: IDR 22,979/KGM.

This continuing of this new regulation actually pushed by many companies from Indonesia, which having the yarn cotton product. They worry to competitor from abroad, after they watched even though the additional duty has been applied to importation of cotton yarn, but the increase importation volume still can't be avoided. 

For us, this new regulation, of course, will effect to our price offer to buyer, and buyer will always search on finding the lowest price they can.

Documents Required for Shipment to Canada

Beside the common shipping documents required for exportation to other country such as bill of lading, some additional documents are needed to provide when we are going to export some goods to. Personally, I seldom handle a shipment to Canada, in fact shipment to Canada need more extra efforts to keep our exportation to be going on safety. I don't know whether buyers from Canada have the same rule or manual. As I have informed on previous posting, in handle an order form Canada need more efforts to pass the order to smooth condition due to low tolerance from buyer and fully of discount.

In this posting, I want to let you know about the require documents when we make a shipment to Canada:

1. Original and some copies of commercial invoice that indicating 'Standard Export packing'.
2. Certificate of origin. The type of this certificate of origin is Form B.
3. Beneficiary's certificate. This document created by seller or manufacturer and should be in signed condition. This certificate stating that production samples have been sent to applicant.
4. Applicant's letter to beneficiary that stating that sample was received.
5. Packing list in both original and photocopy.
6. Inspection certificate, which evidencing that goods have been inspected prior to on board date and ware found to be as ordered by applicant.
7. Canada customs invoice in both original and photocopy.
8. Bill of lading.
9. Textile declaration or single country declaration, which declare that all information stated on this document are true. The information marks, goods description, description of manufacturing, country of manufacturing, date of exportation, and materials are stated on.
10. Certificate of conformity. Beneficiary certifying that the goods or product meets the requirements pertaining to the Flammability Testing Standards established by the Customer Product safety Commissions under the Consumer Product Safety Improvement Act.

Penalties for Exportation to Canada

We, one of exporters from Indonesia, recently, has received an order from Canada. As usual, for the first order buyer gives a little quantity, and this buyer from Canada as well. The Buyer only gave us 2400 pieces as stated on the order sheet they given.

Buyer  have also sent us the manual for handling their order. When I read the manual until end of the page, I got some surprises when I read some penalty because of some conditions. This kinds of penalty is so high than we have ever. Here I will mention some conditions, which will bring us to take some penalties:

Late delivery.

The discount taken on late delivery, which divide to several interval:

•  6-10 days late from initial delivery. It will taking discount 10% from the total invoice.
• 11-15 days late form initial delivery. This condition takes us to pay air freight charges. It means that the shipment mode will be changed from by sea to air shipment under our account.
• 16-20 days late from initial delivery. The shipment will be by air prepaid or we'll pay the cost shipment until port destination, and additionally, buyer gets 15% discount from total invoice from us.
• 21-25 days late from initial delivery. We'll pay the air freight and buyer gets 20% discount because of this lateness.
• 26-30 days late from initial delivery. Because of this lateness, shipment will do by air prepaid or we pay the air freight and buyer gets 25% discount on invoice.
• 31 plus days late. We pay the air freight charges and the discount to become 50% from invoice.

Shortage and Overage.

The tolerance of shortage or overage buyer given is 5% from the initial quantity. If the shortage or overage out of tolerance, buyer will apply discount depending on the quantity of shortage or overage.

• 50% to 10%. This shortage or overage condition brings us to pay 15% from total amount of invoice.
• 10% to 20%. Buyer takes 20% discount from the total invoice from us if this shortage or overage happened.
• More than 20%. The discount will be 50% from the total amount of invoice, or the order will be cancelled.

Missing price tickets.

We'll pay US$0.50 for each price ticket missing.

Wrong retail price.

We'll be charged US$250.00 at minimum for wrong retail price. 

Wrong ticketing.

Wrong ticketing is when we are wrong on placing or attaching the ticket. For example, we attach size XL hang tag label on size L garment. We will pay US$250.00 for this.

Wrong packing list.

If the packing list differ from the goods shipped or received, US$500.00 will be applied to us as the penalty.

Wrong carton content.

If there is a discrepancy between carton marking and the carton content, we'll pay US$10.00 for each carton with a minimum of US$100.00.

Marking.

Charge for wrong carton marking is US$5.00 per carton.

Late shipping documents.

If buyer receive shipping document two days prior to ETA, we should pay US$1000.00 per shipment and US$500.00 per shipment for late document received one week after on board date.

Missing shipping document.

Buyer charges us US$500.00 per shipment if the shipping documents are missing or wrong.

Export to Japan : Outword Manifest 24 Hours Before Vessel Depature

This article I create for those who are starting export any goods to Japan. According to the mandatory implementation of Japan 24 Hours Rule, all shipper must send the actual shipping details or final data of shipping booking in advance to forwarder. In previous time before this rule implemented, we, shipper in Indonesia could provided the final data of our shipment to Japan on Friday for vessel departure on Sunday or Monday, but after the mandatory date of this rule, we can't do that.

Because of this rule, of course, shippers should provide the final data of their shipment to Japan in advance.

Here are some cut-off times for data  manifest I got from forwarder for direct shipment to Japanese port: 

Shipping line OOCL for destination Tokyo, Nagoya, Yokkaichi, and Kobe, which the shipment date on Wednesday, the cut-off final data of shipment is on Saturday or three days before sailing date.

Shipping line Wan Hai, for the same destination with OOCL, the cut-off for final data of shipment is on Monday at ten o'clock in the morning or two days before departure.

Shipping line MOL, the cut-off almost same with Wan Hai, this only two hours later then Wan Hai.

K'Line has two times departures in a week, one on Sunday and the second on Friday. For vessel departure on Sunday, the final data can be received until Wednesday at twelve o'clock in the morning. And for the Friday's vessel departure, the cut-off will be on Monday at twelve o'clock.

The last, for NYK shipping line has also two vessel departures in a week, Sunday and Friday. For the vessel departure on Monday, the final data for outward manifest limited until Thursday at fourteen o'clock. And for the vessel departure on Friday, the closing of final data for manifest is on Monday at twelve o'clock.  

This condition will brings to the higher cost production in our factory. To meet this new rule, production in a factory must add the production times or might be taking overtime, or a factory will open the additional worker.

Learning HS Code For Sweater

Each HS code determines what goods is about, and each goods has a specific HS code which different to each other. A HS code is containing ten digits numbers. For the first-sixth digits of an HS code will be same in all countries. And the rest digits will be different from one country to each other.

Now, we are going to learn HS code for sweater. Two things we should understand when we want to decide what the HS code of each sweater is to be. Firstly, we have to check the styling of the sweater. The following list will give you some examples of styles or design  I have ever seen:

1. Cardigan, jerseys, or sweater. This styles have the same HS code. The first- four digits of the HS code is 6110.
2. Dress pullover. This style will have 6104  for the first-four digits of the HS code.
3. Sweater for baby. Sweater for baby who the age is under 3 year old, the HS code is 6111. However, starting 3 year the HS code will be in 6110. Therefore, the age is determining of the HS code, too.

The second point we have to learn to determine HS code of sweater is its yarn. I mean what kind of yarn to be used for production of the sweater, or it’s usually called the composition. After we knew first-four digits of the HS code, the next step is understanding the composition. This composition is wrote on the care label, or also written on the order sheet. For example, 100% acrylic.

Herewith a list of HS code I have written on shipping documents:

• 6110.30, this is for cardigan, jerseys, sweater, which the composition is from synthetic fiber, such as acrylic.
• 6110.20, for the sweater that the yarns is made from cotton fiber.
• 6104.43, this HS code is for dress pullover, which the yarn’s composition from synthetic fiber.
• 6111.20, this HS code for baby sweater who the age is under 3 year old and the yarn composition for the sweater is 100% cotton.

The next digit of HS code of sweater after the first-six digits is might be different from one country to each other. For example, in France, 6110.30.9900, however, in Indonesia is to become 6110.30.0000 in the same product or goods.

Credit Note

Contrary with debit note, credit note is reverse form debit note. To make easy in understanding of credit note, I will give a sample in business nature.

A buyer send a package that containing some buttons. In agreement between buyer and shipper stated that all accessories and the courier fee are have to be covered by shipper. But, the fact that buyer provide the buttons and send the buttons to shipper by using a courier under buyer's account. Of course, all charges including buttons and its courier fee will have to return back to buyer by shipper.

In this case, shipper as a manufacturer or beneficiary party will issue a credit note. This credit note as notice that shipper will pay some amount as reimbursement to buyer. 

In issuing a debit note, we'll need the following information:

1. Beneficiary name and address. 

2. Beneficiary bank details.

3. Destination of the payment.

4. Credit note number.

5. Date of issue of credit note .

6. Description.

7. Total amount.

8. Term of payment.

Sometimes a credit note stating that beneficiary agree to pay the amount of credit note within a period of time, such as, 30 days after issuing date of the credit note.Usually, beneficiary creates a credit note with letter head inserted on.

Debit Note For Reimbursement

This posting containing my opinion based on my experience. If any differences meanings to this opinion of the debit note, I will be happy to take it to be a good reference. 

We create a debit note when we want to take reimbursement from any party, which we have paid any charge for. For example, a company send us a goods through any courier, which is using our account. As a result, the invoice of the courier charge will be going to us. Because the courier charges actually have to be paid by shipper, of course, we have to take our money back from the shipper. The way to do that, we need to create a debit note for shipper. Based on these debit note, shipper will return our money back by any method of payment as both parties agreed.

Contents of debit note is likely invoice. These contents are issuing of the debit note, payer, date of issue, debit note number, description of charge, amount to be paid, bank details including the account number, and signature.

However, sometimes a reimbursement inserted to another invoice. For instance, a buyer order some goods to us, let say sweater. When the goods are ready to export to buyer, shipper will issue the invoice or proforma invoice. If any amount should be returned to us, then we can also inserted to these invoice based on agreement between buyer and us. Therefore, we don't need to create a debit note in this case.