The paper "Managing Global Trade Operations " is a good example of business coursework. International trading operations involves a business transaction taking place between two or more countries. The trade takes place between two or more groups of people from the countries involved. In this essay, the trading operations between Indonesia and the UK will be discussed. A particular product called Indomie is the subject of this trade. It is a brand of instant noodles produced by Indofood CBP Sukses Makmur which is the biggest instant noodle manufacturer in the world. Indofood was founded in 1982 in Indonesia and it is among the largest pre-packed food companies in Indonesia (Joshi 2005, 102).
Various documents will be used to complete the transaction with the documentary credit being used to secure payment for the exporter. Transportation of the goods will be done by ship. This paper is dedicated to outlining the procedure and plan including the transactions that take place when Indomie is exported from Indonesia to the United Kingdom. This essay focuses on the exporter or seller of Indomie which in this case is Indofoods. Planning for export The United Kingdom being in Europe falls in a different trading bloc from that of Indonesia which is in Asia.
Trade between the UK and Indonesia follows a certain procedure involving a number of steps. These ensure that the product is transported from the seller to the buyer. The goods will be shipped from Indonesia to the United Kingdom. The reason for the use of a ship is that the food products are bulky and transportation by air is not viable. Shipping is not as costly as air and it is suitable given that road or rail transport is not possible at all (Sullivan 2003, 56).
Shipment is also appropriate since the two countries namely the UK and Indonesia are not landlocked and therefore goods can be transported through their ports. Indomie is not a perishable product and therefore shipping it to the UK will not present the problem of time. Incoterm Delivered Duty Unpaid (DDU) is the ‘ D’ incoterm that will be applicable to the transaction. The seller will have to clear the goods before they are exported and he will make these goods available in the UK at the port in the period or date in the sales contract.
The risk and cost of the import customs formalities are the responsibility of the buyer. Included here is the payment of formalities, taxes and customs duties as well as the rest of the charges based on contractual specifications. The seller has a higher business risk since he will bear any risk in the period of transit. Short term finance acquisition The two traders meaning the seller or exporter and the buyer can arrange for short term finance through securing of trade finance packages from their banks or insurance or cargo.
The letters of credit can act as sources of finance. Another method is factoring where the person receives cash only after a few days after invoicing. The buyer or seller must, however, take the responsibility to collect his or her short term debt (Samuelson 2001, 89).
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