IGNOU : M.COM : IBO 4 : UNIT 5 : Q - 1. Describe the steps involved in the receipt, examination and confirmation of an export order.

 

Ans. EXAMINATION AND CONFIRMATION OF EXPORT ORDER

As soon as an export order has been received, the exporter must first acknowledge its receipt by intimating the importer through telephone, telex, fax, etc. Though not legally necessary this step is helpful in creating business goodwill for the exporter. The exporter must carefully examine the contents of the order to see that there is no discrepancy between the export order and export contract (verbal or written). Thus, the accepted performa invoice, buyers purchase order or the letter of credit opened in favour of the exporter must be examined. Items to be examined particularly are :

i) Product description, including specification, style, color, packing conditions, etc.

ii) Marking and labeling requirements, if any.

iii) Terms of payment, including currency, nature of letter of credit (revocable. irrevocable, confirmed, unconfirmed, restricted, unrestricted, etc.), credit period, if any.

iv) Terms of shipment including choice of carrier, mode of carriage, place of delivery, date of shipment1 delivery, port of shipment, Trans-shipment, etc.

v) Inspection requirement including type of inspection and inspecting agency.

vi) Insurance requirements including risk being covered and insurable value.

vii) Documents for realizing payment including the nature and number of invoices, certificate of origin, certificate of inspection, certificate of value, bill of exchange, insurance policy, transport document and document of title, etc.

viii) Last date of negotiation of document with the bank.

A new exporter who is very keen to get into the business may tend to ignore certain aspects of the export order. It is not uncommon that lie encounters difficulties while complying with the contracted obligations. In the process, he may suffer a loss. For example, the importer may specify inspection to be undertaken by an agency, which does not operate from India. Such a problem will be discovered only after the goods have been manufactured at this stage. it may be difficult to persuade the importer to change this condition. Consequently &e exporter may suffer a loss.

If there are any discrepancies in the export order, the importer must be immediately informed for its amendment. It is only after the amended order has been received and confirmed by the exporter that he becomes liable to fulfill his contractual obligations. It is commercially prudent to confirm the order by sending a documentary confirmation. In certain contracts it may also be the legal requirement.

There is no specific format of this confirmatory letter and an ordinary letter would serve the purpose. Although some exporters have printed the letter with suitable blank spaces.