Transportation issues within the U.S. on the way to the border also have to be considered, Papangellin notes. “Is it going to be refrigerated, is it going to be dry, is it going to be a van or an open conveyance? There are certain counties that have phytosanitary restrictions or requirements you need to meet both on the growing side, as well as the packing and the transit side.” This may necessitate alternate traveling routes or providing assurances that precautions have been taken to prevent “a hitchhiker insect.”
Part of the process is paperwork, which will bog down the process if not completed in a timely and accurate manner.
Goforth has staff dedicated solely to managing “all of the protocols required to ship to Mexico. There are very stringent demands as far as labeling and box accountability. Is it burdensome? Yes. Is it doable? Yes. In our case, it is worth the effort.”
Getting Paid
Negotiating payment, both when and in what currency, is a vital step in the process. “Do you want to bill a U.S.-based trading company so you’re secure on the U.S. dollar under the Perishable Agricultural Commodities Act (PACA)? Do you trust the other side and want to use irrevocable letters of credit, or do you want to strictly bill in pesos, and hope you’re going to get paid? You need to understand the culture, the system, the people you are shipping to, the exchange rate, and all the different vehicles available to transact dollars and pesos to assure payment,” Papangellin says. “Don’t wait until something doesn’t happen, like you don’t get paid, and try to figure it out,” he warns. “Then it’s too late.”
This is also when references can come in handy. Aside from cash-on-delivery or direct deposit transactions, Cordova advises exporters to thoroughly evaluate the history and creditworthiness of a buyer, gathering information from references, trade groups, and Blue Book ratings. “References are really key; that’s just basic business.”
One sure way to get paid is through an irrevocable letter of credit, says attorney Robert Goldman in Fort Lauderdale, FL. “The bank guarantees you are going to get paid if the customer doesn’t pay.”
Colter-Carswell agrees, stating, “Request a letter of credit, but it may not be granted to everyone, so you need to draft credit agreements, promissory notes, guaranties, a security agreement—all according to Mexican legislation to secure the liens.”
