Today’s technologies have opened the global market like never before, but there’s so much more to shipping internationally than simply printing a shipping label. Each country has its own rules, regulations and red tape for importing goods, and it can be overwhelming for many small or mid-sized businesses to get started.
Fortunately, Alabama companies have many resources at their disposal — the trick, experts say, is knowing about them and connecting with the right people and information…then having the patience to see the process through.
“Technology has really changed the landscape for Alabama businesses, because now businesses of all sizes can really profit from doing business overseas, and it’s become much easier for them to do that,” says Christina Stimpson, director of trade for the Alabama Department of Commerce’s Office of International Trade.
Export Alabama is a coordinated effort to partner local, state and national organizations, combining their efforts and reducing redundancy while helping companies of any size succeed in the global marketplace, she says. Export Alabama provides comprehensive international trade services, all on a confidential basis, including advocacy, export education workshops, export finance assistance, identifying foreign distributors and buyers, international market research, and trade missions and shows.
Trade organizations involved with Export Alabama include the Alabama District Export Council, the Alabama Export Assistance Center, the Alabama International Trade Center, the Alabama Port Authority, the North Alabama International Trade Association and the Alabama World Trade Association. By helping Alabama businesses succeed in the global marketplace, Export Alabama contributes to the state’s economic development and prosperity, says Stimpson.
“Alabama is really seen as a model to other states on how to do it right,” she says. “We really develop and coordinate our programs to benefit companies, from trade education events to providing market research identifying what foreign markets would be best for a company’s product.”
Focused on small and mid-size businesses
Focusing on small to mid-sized businesses is key, says Stimpson, because while the majority of the value of Alabama exports comes from the larger companies with high-dollar value products like Mercedes and Airbus, about 80% of the state’s exporters are small or medium-sized businesses. “We really focus on [these] companies because typically the larger companies already have the resources in place for exporting goods, but it’s the smaller companies that really need the assistance.”
The challenge, says Anne Burkett, executive director for the North Alabama International Trade Association, is getting the word out that these resources are available to them — often at no cost. “We want to help all businesses, no matter their size, because if we could help increase Alabama companies’ exports by just a little bit, it would have a big effect on our export trade numbers statewide.”
Alabama spent decades recruiting large manufacturers and has been very successful, says Brian Davis, director of the Alabama International Trade Center (AITC) at the University of Alabama. “So now the state has a really strong, diverse manufacturing sector made up of many global companies already well-versed in exporting and importing around the world. Most smaller companies just don’t have the resources the larger companies do, but they still have to do all the same things to be able to export.”
The AITC helps companies with research to understand and navigate the regulations and compliance needed to get their goods out of the U.S. and into other countries around the world. “There are specific hoops companies need to jump through with each country,” says Davis. “And while these things are not difficult, it can be very time-consuming trying to figure it all out on your own. We try to help companies shortcut some of the time to dig into all of that; providing them with the most accurate information and pointing them in the right direction from the beginning.”
Some of the assistance offered through AITC includes one-on-one trade advising, customized market research and trade training programs. The center also offers no-cost trade financial consultants and can link companies with other resources as needed. An Export Readiness Assessment is available on their website to help companies determine what assistance they may need to get started exporting their goods.
Parrish Lawler, director of trade and development with the Alabama State Port Authority, says that seeking advice and assistance from the available Export Alabama partners is key for any company wanting to get involved in international trade. Lawler gets inquiries from smaller companies who are not really sure where to start.
“The last thing you want to do is make a mistake and be subject to any types of penalties or fines or problems in shipping your products,” he says. “The important thing is to find someone who can help you navigate and prepare the paperwork, the customs clearances — all the types of things that need to be in order for you to clear the cargo and get access to it.”
And while doing research and filling out the right forms and paperwork is very important, patience is also key for many businesses getting started. It can take a few years to get through all the red tape involved in international trade, says Davis, and many smaller businesses just do not have a dedicated employee to handle exports — especially starting out.
One Huntsville company, Aviagen, organizes shipments from the U.S. to approximately 35 countries around the globe, mainly using air cargo to ship its product — day-old baby chicks. “Our company is a research and development company that specializes in genetics and our commodity is chicken breeding stock,” explains Kelly Wheeler, Aviagen’s export manager.
Aviagen faces its own set of challenges shipping live animals safely across the globe, recently opening two state-of-the-art chick holding rooms at its London Heathrow Warehouse Holding Facility.
“We constantly strive to get closer to perfection at handling this very valuable and sensitive cargo,” says Carlo Rebuffi, Aviagen global account manager. “Our goal is to help…safely and securely deliver chicks to their destination, and we are proud to contribute to feeding the world.”
Even if you’re not coordinating the shipment of live animals around the world, there’s still a lot to consider when exporting your product, says Allan Staib, export manager for Birmingham-based Bud’s Best Cookies.
“There are some significant barriers for all lower-value products — like cookies,” he says. “You have to consider the total cost to ship your products overseas — depending on what you are shipping and where, the shipping cost can be as much as 30% or 40% of the value of the of the goods in the container. And you also have to consider the import duties and taxes and all that.”
“Say you ship a container of goods with a total value of $12,000 and it costs $4,000 to ship the container,” says Staib. “Then, when it lands in the foreign market, the import duty — let’s say it’s 25% — is charged not just on the $12,000 but it’s charged on the landed cost, which includes the shipping cost. And value-added tax (VAT) countries like China have a 17% VAT that’s charged on top of not just the value of the goods but the freight cost. So, the total cost could become a real problem.”
Add to that the cost of getting your product to a port or on an airplane, he says, and it can be challenging for any company — particularly smaller ones — to run a successful export business. But there are ways to address these challenges, he says, including finding creative ways to pack your shipment containers and increasing your shipping options. The trick, says Staib, is determining your best overseas markets where you can maximize your profits.
And that’s where Export Alabama partners can help. From market research to securing funding to completing necessary paperwork and figuring out the best shipping strategies, organizations across the state are ready to help Alabama businesses thrive in international trade, says Stimpson.
“Each one of our partners brings their own area of expertise,” she says. “When a company reaches out to one of us, they get all of us because we are going to work to understand what that company’s need is and then get them to the right person to ensure that they get the information they’re looking for…we want to ensure that companies looking to expand internationally have a strong foundation and that they have the pieces in place to be a successful business when scaling up to serve the global market.”
Jennifer Williams is a Hartselle-based freelance contributor to Business Alabama.
This article appears in the December 2023 issue of Business Alabama.