Outsourcing 101 – Part 2 of 3

Continued from last weeks post

5. Translation & Interpretation

Language can be a major impediment in international business. Some companies have English-speaking representatives to resolve this barrier. However, one finds that language fluency can vary widely. In addition, many technical concepts, material names and such are not easily translated The Federal Group employs experienced staff with fluency extending to all languages and dialects of regions where we operate. This ensures that all specifications are understood and observed.

In today’s global economy, document translation has become a necessity for companies who wish to offer their products and services on the international market. To be successful in their respective markets, companies must communicate with their customers and provide them with accurate documentation in their native language.

Translation is defined as the act of expressing something in another language while retaining the original meaning. Many people assume that translation is easy and consists only of changing each word into the equivalent word of a different language. This is not true because many words have no foreign equivalent. Some phrases if translated word for word would make no sense or could be offensive. Besides, specialized vocabularies and differences in cultures must be considered.

Interpretation is far more flexible as it involves communicating the meaning from one language to another and not a word for word translation. The task requires comprehension of what was said in the source language, analysis of the source message for meaning and restructuring the source message into the target language.

It is vital when engaging in international business to know and understand the differences between the two, and The Federal Group staff can help your business successfully correspond with your new customers or suppliers.

6. Cross-Cultural Training

Doing business overseas requires a lot more than just learning the country’s official language(s). For example, in Mexico it is a good idea to ask your Mexican business associates about their families, but in the Arab community your business relationship might never recover from this kind of questioning.

Today, businesses are increasingly becoming involved in international trade and competition is stiff. You could be selling to customers abroad, involved in a joint venture, managing a staff of foreign nationals or consulting for a company with overseas interests. For you to succeed it is imperative that you understand the nuances of doing business and socializing in your target country.

When living and working in a foreign country, our assumptions about the way things work and the way people behave are often incorrect. The experience can be quite overwhelming, but if a person is well-managed and has insight into cultural differences, it can be a very rewarding and successful experience on both personal and professional levels.

What is cross-cultural training?

Cross-cultural training enables professionals and their families to optimize their experiences in an international environment by making them aware of crucial patterns of behavior in their own culture as well as in the new culture. This helps them break down potential barriers and one can profit more from their international experience.

Cross-cultural training is relatively new on the circuit. Many companies experiencing global growth are sending employees and their families abroad only to find that they are not doing as well as expected because there is so much to learn, so much to adapt to and new ways of working that take time to master. Cross-cultural training or CCT is a program designed to specifically answer these needs.

Who can benefit from cross-cultural training?

• Business professionals working abroad and their families
• Professionals and their families preparing to relocate overseas or recently relocated
• Long-term expatriates who wish to improve their efficiency
• Human Resource professionals in multinational corporations
• Managers of multinational teams
• Staff working on projects with colleagues from other countries

Cross-cultural training provides incoming and outgoing expatriate families a chance to learn what to expect and how best to deal with the changes. It allows you to meet with a trainer who understands what crossing cultures is like and offers you a chance to explore your decision confidently. He provides accurate information about daily life, political, historical, and economic data from a social and workplace perspective before you relocate.

7. Logistics

With the world markets getting more and more competitive, international logistics is becoming an important business area where companies turn to maximize profits, increase customer service and reduce operating expenses. The logistical issues play a major part in international trade, but can be complex and need to be well understood by those involved in the import or export of goods. In many cases, logistics can be a deciding factor in clinching the deal. The Federal Group is able to offer you expert advice in the following areas:

• Ocean freight forwarding – sea cargo
• Air freight forwarding – jet cargo
• Rail freight forwarding – train cargo
• Customs brokerage
• Duty drawback
• Classification and compliance
• Multi-model
• Insurance

8. Importing Terminology

To provide a common terminology for international shipping and minimize misunderstandings, the International Chamber of Commerce developed a set of terms, known as Incoterms (Importing Terminology).

Cost and Freight (CFR): The exporter pays the costs and freight necessary to get the goods to the port of destination, but the risk of loss or damage is assumed by the buyer once the goods are loaded at the port of embarkation.

Cost, Insurance and Freight (CIF): The exporter pays the cost of goods, cargo and insurance plus all transportation charges to the named port of destination.

Delivered at Frontier (DAF): The exporter / seller’s obligations are met when the goods arrive at the frontier, but before they reach the Customs border of the importing country named in the sales contract. The expression is commonly used when goods are carried by road or rail.

Delivered Duty Paid (DDP): This expression puts maximum responsibility on the seller / exporter in terms of delivering the goods, assuming the risk of damage / loss and paying duty. It is at the other extreme from the “ex works” expression listed below, under which the seller assumes the least responsibility.

Delivered Ex Quay (DEQ): The exporter / seller makes the goods available to the buyer on the quay or wharf at the destination named in the sales contract, and bears all costs / responsibility up to this point. There are two types of ex quay contracts in use: ex quay duty paid, whereby the seller incurs the liability to clear the goods for import, and ex quay duties on buyer’s account, whereby the buyer assumes this responsibility.

Delivered Ex Ship (DES): The exporter / seller must make the goods available to the buyer on board the ship at the location stipulated in the contract. All responsibility / cost for bringing the goods up to this point falls on the seller.

Ex Works (EXW): Opposite to “delivered duty paid.” This minimal obligation requires the seller only to make the goods available to the buyer at the seller’s premises. The seller is not responsible for loading the goods on the vehicle provided by the buyer, unless otherwise agreed. The buyer bears all responsibility for transporting the goods from the seller’s place of business to their destination.

Free Alongside Ship (FAS): The goods must be placed on the docks by the seller, alongside the vessel. The seller’s obligations are fulfilled at this point. The buyer bears all costs and risks of loss or of damage to the goods from that moment.

Free on Board (FOB): The goods are placed on board the vessel by the seller at the port of shipment specified in the sales contract. The risk of loss or damage is transferred to the buyer when the goods pass the ship’s rail.

Free Carrier . . . (named port): Recognizing the requirements of modern transport, including multi modal transport, this principal is similar to FOB, except that the exporter’s obligations are met when the goods are delivered into the custody of the carrier at the named port. The risk of loss / damage is transferred to the buyer at this time, and not at the ship’s rail. The carrier can be any person contracted to transport the goods by road, air, sea, rail or a combination thereof.

Carriage Paid to . . . (named place of destination): The seller pays the freight for the carriage of the goods to the named destination. The risk of loss or damage to the goods is transferred. The risk of loss or damage to the goods is transferred from the seller to the buyer when the goods have been delivered to the custody of the carrier.

This is part 2 of a 3 part series.

Part 3 of 3 will be posted next week.

We sincerely hope you found this article informative and valuable. We welcome your comments or suggestions regarding this article or any other subjects you would like to see us write about.

Thank you,
The Federal Group USA

By Robert Levy – CEO TFG USA
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