Success in global markets requires meticulous attention to detail. When it comes to exporting products from the United States, one of the most important considerations is proper labeling and packaging. Exporters must ensure that their products comply with local market regulations, as well as any specific labeling requirements for their particular industry.
Understanding Local Market Requirements
The rules for marking and labeling are dependent on where your product is being sold. “The first thing you need to consider with marking/labeling rules is what is your country of origin, also known as non-preferential rules of origin," says Angela Chamberlain, vice president, global trade content at Integration Point. “These rules are used to determine the nationality of a good when entering the country."
Once the country of origin is determined, the next step is to understand the labeling requirements in the destination market. Each country will have its own rules specifying key requirements, such as what language a label is written in, and what product components need to be listed.
—Suzanne M. Richer, director, trade advisory practice, Amber Road
Exporters to the European Union (EU), for example, have to understand marking, labeling and packaging requirements, which can encompass the entire region or just apply to one member country. It is particularly important to distinguish what is mandatory and what is voluntary, advises the U.S. government's “Basic Guide to Exporting."
Mandatory Product Labels
Suzanne M. Richer, director, trade advisory practice at Amber Road, recommends that exporters work with their buyers to confirm local rules and regulations. “The wrong label may result in the product being seized, recalled or destroyed," she says.
Mandatory product labels are intended to provide very specific information about a product, ranging from measurements and ingredients to country of origin and expiration date. Mandatory information is often required for exporters of products that can potentially impact public health and safety. These can range, for example, from consumer goods and food products to cosmetics and pharmaceuticals.
In the EU, for instance, cosmetics containers and/or packaging must include the trade name and address, or registered office, of the manufacturer or person responsible for distributing the product. Packaging also requires information related to ingredients, weight and volume, and a “best buy" date if the product's shelf life is less than 30 months.
Chamberlain notes that labeling requirements can vary within a region. Compliance with local requirements often includes the language used, ingredients list and warning labels. In the EU, for example, there are two dozen “official" languages. Each EU country determines the appropriate language or languages required in its market.
In Canada, products must be labeled in both English and French. Products sold in Canada also must include labels that indicate the metric units of volume or weight, or the numerical count if the product is sold by individual units.
Using Informational Marks
Marks and labels need to be part of an exporter's due diligence related to product packaging. A mark is a symbol that appears on product packaging to warn of potential danger or to provide more information to consumers. Marks are often universally identifiable, and are sometimes included for informational rather than regulatory reasons.
According to the Basic Guide to Exporting, informational marks provide government regulators, importers, distributors and end-users with information concerning safety, health, energy efficiency and/or environmental issues relating to a product.
But marks also are used to indicate compliance, sometimes self-certified, with specific market requirements. A certification mark often indicates that the manufacturer has tested or verified its product in compliance with a specific standard or regulation. In the EU, for example, CE marking indicates that a product meets specific regulatory requirements in the European Union.
Prepackaged goods sold in the EU typically include a mark that designates that liquids and other substances meet EU regulations regarding weight and volume. While the mark is not required, displaying it helps to ensure that the products can be shipped throughout the EU without additional regulatory scrutiny.
Another mark familiar to American exporters is the Energy Star symbol, often used to indicate if office equipment and appliances are energy-efficient. Product manufacturers frequently use the logo for both informational and consumer marketing purposes
Labeling Boxes and Containers
In addition to ensuring proper marking and labeling of individual products, exporters need to be sure that the containers and boxes used to ship finished products are properly identified.
“Marking of packing with country of origin, and content information, at a minimum, may avoid problems when local customs or other officials decide to inspect the product," says Richer. “The correct labeling on an exterior package must match the information placed on individual packages shipped within a larger exterior package."
It also is important to make sure that packaging is durable enough to meet both shipping and market conditions. Some manufacturers, for example, use third party labs for drop testing and temperature testing their boxes.
For export markets, packaging also needs to be optimized to meet specific shipping requirements, which can vary depending on the mode of transportation the country of destination.
Another important consideration is understanding how shipments are processed and inventoried by your customers. For example, use of a barcode may help with processing, as well as make it easier to track the movement and location of products throughout the supply chain. “Barcodes help companies manage inventory and provide traceability capabilities," says Richer. “Most land border crossings between two countries rely on barcodes to provide sufficient information to clear customs."
While it is important to label shipments for easy identification by customs authorities and/or customers, careful consideration should be given to how cartons are labeled. It is often advisable to avoid overt labeling of cartons containing high value-added products in order to minimize the risk of the theft.
The key to both efficiency and security is preparedness. “Understand the regulations from the beginning so that you don't get stopped or penalized trying to enter a country," says Chamberlain. “Most importantly, look for ways where you can utilize automation within your marking/labeling processes."