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Friday, 26 April 2013

Why do Russian/ CIS company prefer to trade with USA or Germany companies instead of UK businesses?

 Last week I was doing some public speaking on international trade development and a little group of delegates (from Russia/ Ukraine/ Azerbaijan – various sectors) approached me and asked why aren't UK exporters as co-operative as suppliers based in countries such as Germany and Russia?

A couple of things they mentioned was our reluctance to move from ExWork or FCA delivery terms while German companies begin with offering delivered prices and USA even work on DDP terms. They also expressed concern that UK companies always ask for full payment in advance rather than negotiating payment terms - which may include payment in advance so they aren’t opposed to this but to say this is the only way UK supplier will trade with them was seen as a little insulting and arrogant.

The Russian guys said that Germany and USA suppliers were now shipping direct into Russia but UK suppliers were still wanting them to consolidate from Finland, Germany etc so giving them extra costs, delays and paperwork issues. Again, the customers may prefer to consolidate their shipments through Germany or Finland but they want to negotiate this not have it presented as an ultimatum.

One of the Ukraine people said he'd hit upon what he thought was a great compromise so the Ukraine company didn't have to get involved with EU export declarations, etc he bought FCA Finland - unfortunately he found that the UK suppliers didn't understand that they had to ensure the goods could leave the EU (FCA - free carrier, meaning free from export restrictions). One quote (I'm paraphrasing a little) was: "German supplier says give me a reason why you won't buy from me! UK supplier says give me a reason why I should sell to you!"

There were more but I'll stop there and look forward to comments.

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