For small- and medium-sized businesses such as Serex, a 20-employee company in Tenafly, New Jersey, which develops diagnostic tests for tobacco and cocaine use and AIDS, the seemingly complicated and risky process of entering the international marketplace can be daunting.
Private and public sector assistance is available; many state governments have export promotion programs that encourage companies to travel overseas to attend trade shows or assist them in industry networking or other aspects of export process. However, this assistance is fragmented and incomplete. Private trading companies serve large businesses, but neglect smaller ones due to costly initial investments of time and money. In fact, approximately 100 large corporations account for more than half of all United States exports.
XPORT, the Port Authority Trading Company established in 1982, which offers small- and medium-sized businesses in New York and New Jersey comprehensive export development, introduced Serex--and over a hundred other companies--to the global market. Over a two-year period, XPORT helped Serex by identifying potential markets, making arrangements with foreign distributors and even suggesting product modifications to facilitate long-distance travel.
Concentrating on six product groups that reflect the manufacturing strengths of the New York-New Jersey area, XPORT first evaluates companies wishing to export. Once a company is determined to have export potential, product-specific managers offer hands-on assistance in all phases of export sales: tailored market research; overseas trade show attendance and industry networking; distributor contracting; acquisition of export licenses and carnets; export financing and insurance; shipping and documentation; and advice on payment terms. After export has been established, client companies pay XPORT a commission. When companies become proficient in managing their export sales, they "graduate" from the program.
XPORT leverages its impact by using resources of existing programs and information sources. As a designated branch office of the Export-Import Bank of the U.S. (Eximbank), XPORT has the authority to screen applicants for bank loans and guarantees and assists companies in assembling the application. In addition, XPORT offers foreign political and commercial risk protection insurance and administers a New York-State, $1.75-million, export-financing fund.
The Port Authority Trading Company reports that it generated over $100 million in export sales for small businesses between 1982 and 1990. Its most successful client is Spectrum Communications and Electronics Corp., a company whose gross sales have grown from $3 million in 1986 to $15 million in 1989 of which 50 percent are due to overseas markets.
XPORT further champions the concept of public, full-service export assistance by training a network of faculty in the New York State Universities and administering a series of student internships. Some state and municipal entities have already incorporated part of XPORT's export development efforts into their own programs.