Guest speakers from the U.S. Commercial Service and the Small Business Administration, provide an overview of existing programs supporting businesses looking to export. Furthermore, we share current trends in e-commerce in Mexico and what products does UPS have available to support small, medium and large businesses looking to export into Mexico.

1. Does your Company Understand
How to Export into Mexico?
Welcome to the UPS Mexico Webinar
Our webinar will begin at 1:00 PM (ET).
While you wait, you may want to prepare your
questions for the Q&A session that will take place at
the end of this webinar.

2. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Exporting to Mexico
Presenters
• Michael Cuesta
• Director, UPS
Operations,
UPS Mexico
• Jeffrey D. Deiss
• Regional Export
Finance Manager,
U.S. Small Business
Administration
• Maria Luisa Boyce
• Director,
UPS Global Public
Affairs
• Aron Davidson
• Senior
International Trade
Specialist,
U.S. Commercial
Service
2

3. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
About UPS
• World’s largest package
delivery company and a
global leader in supply
chain services
• 19+ million packages and
documents per day
• On a daily basis, 3% of
global GDP and 6% of
the U.S.’s GDP move
around the world in the UPS
network
• Serves more than 220
countries and territories
around the world
3

4. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
About UPS
• High value-add manufacturers,
urgently needed replacement
or repair parts, samples & late
orders, small volume
shipments, commercial
documents
• Hi-Tech, Healthcare,
Aerospace, Industrial
Manufacturing, Retail,
e-Commerce
• Enabler of global value
chains and e-commerce
4

5. Does your Company Understand How to Export into Mexico?

6. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

7. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Grow U.S. exports to increase U.S. jobs.
Our Mission
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
7

8. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Source: U.S. Department of Commerce’s International Trade Administration, Bureau of the Census, and the Bureau of Economic Analysis
11.5M JOBS
SUPPORTED BY EXPORTS
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
8

9. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
More than 70% of the world’s purchasing power is outside of the U.S.
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
9

10. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
We have global relationships and expertise in
every major industry sector.
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
10

11. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Leverage the
strength of the
U.S. government
Market access problems
Unfair contract competition
Getting paid
Meetings with the right partners
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
11

12. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Our efforts supported over 250,000 U.S. jobs in 2016.
Results for U.S. small businesses
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
After just 12 months, our clients see…
$622,000 in new revenue
7% increase in new employment
3 jobs safeguarded
12

13. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Results for local communities
For every $1 allocated to
every U.S. Commercial
Service, about $192 returns
to the U.S. Economy
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
13

14. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
U.S. Department of Commerce | International Trade Administration | U.S. Commercial Service
Supporting your
export growth every
step of the way.
14

15. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

16. Office of International Trade
Federal & State
Trade Development
International
Trade Finance
International Affairs
Trade Agreements
Transacting global
business
Federal programs to support trade finance

17. The financing you offer your foreign buyer is part of
your value proposition
The quality of your product
+ The cost of your product
+ The profit you need
+ The delivery role you undertake (INCOTERMS)
+ The payment terms you offer (Terms of Sale)
+ The currency terms you offer (Currency)
+ The risk mitigation measures you need
= The total cost of the product to the buyer
All affect the competitiveness of your product vs.
another
Every exporter needs a range of well-thought-through
export pricing options to negotiate from.
17

18. Understand the value of open account to your
foreign buyers
• Low US interest rates vs. high foreign interest rates can
advantage in your sales strategy.
• The base interest rate in the US = 1.5% vs. Mexico = 7.50%
Example: Mexican buyer must pay $100,000 cash-in-advance, with
cost of borrowing at 14+%:
$100,000 x 14% per annum = $14,000/yr. interest cost = $
Time for delivery to arrive: 2 mos x $1,167
Finalize sales with their buyers: 2 mos x $1,167
Collect from their local buyers: 2 mos x $1,167
Total Interest Cost to Mexican buyer = $ 7,000
(7%
Potential for re-pricing or increased sales volume!
18

19. 3 trade financing tools that an exporter needs
• To offer competitive credit terms – risk mitigation
to accompany competitive sales terms (export A/R
protection)
• To fulfill export orders – working capital – for
production and pre-shipment costs (raw materials,
inventory, labor, etc.);
post-shipment carrying costs (assuring sufficient cash
flow while offering competitive terms)
• To position the firm for export success –
fixed assets, equipment, permanent working
capital, debt restructuring – to improve competitive
position and be more efficient
19

20. 1. Offering competitive credit
terms… safely
 Ex-Im Bank – export credit insurance
– risk mitigation to support competitive sales
terms (export A/R protection).
– Will do small policies (no minimum); has small
business “mission”
– Will insure most countries; has promote-US-
exports “mission”
– Requires majority US content; no military
exports
– Consult with an experienced export insurance
broker to find the best fit
20

21. Examples of export credit insurance from Ex-
Im Bank
• Ex-Im Bank’s “Small Business Multi-Buyer
Policy”
– 95% against political risk (foreign government action)
– 95% against commercial risk (buyer action)
– Cost = $0.55/$100 of insured A/R (≤ 60 day A/R terms)
• Ex-Im Bank’s “Express Insurance”
– Multi-buyer policy for small exporters (≤ $7.5 MM export A/R
annually)
– 95% against political risk (foreign government action)
– 95% against commercial risk (buyer action)
– Cost = $0.65/$100 of insured A/R (≤ 60 day A/R terms)
– Ex-Im does in-house underwriting on buyers ≤ $100,000
– Up to 10 foreign buyers can be insured
21

22. 2. Fulfilling export orders
Export line of credit – for production and pre-shipment
costs (raw materials, inventory, labor, etc.); post-
shipment carrying costs (assuring sufficient cash flow
while offering competitive terms).
 SBA loan guarantees:
– 90% loan guarantees (compared to the
usual 50-75%)
• Export Working Capital Program (up to $5
million)
• Export Express (up to $500,000)
22

23. 3. Positioning the firm for export
success
Loans for fixed assets, equipment, permanent working
capital, debt restructuring – to improve competitive
position and be more efficient:
 SBA loan guarantees
– 90% loan guarantees (compared to the
usual 50-75%)
• International Trade Loan (up to $5 million)
• Export Express (up to $500,000)
23

24. Bonus program: STEP!
• State Trade Expansion Promotion (STEP) grants
– Grant program funded by SBA.
– States compete for grant funds to deliver in their state.
– In 2017, 44 states received awards totaling $18.5MM.
– State agencies award STEP funds as grants (or programs) – typically
$3,000-$10,000 per business - to reimburse local small businesses
for export promotion activities like attending/exhibiting at
international trade shows and other export market development
activities.
– Find out about your state’s STEP grant program at
https://www.sba.gov/step
24

25. For more information, please visit www.sba.gov/international
Jeff Deiss
jeff.deiss@sba.gov
415-902-6027
Regional Export Finance Manager, SBA, San Francisco

26. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
UPS Pulse of
the Online
Shopper™
Global Study
evaluates consumer
shopping habits

27. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Methodology
 The 2018 study was fielded in Q1, Q2 and Q3 2017
 Based on a comScore survey of more than 18,000 online shoppers
worldwide, which includes +1,100 from Mexico
 Three areas: constants, movers & emergers
Breakdown of respondents based on shopping frequency:
27

28. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Online Purchase made from international retailer
28
Mexican online shoppers tend to
purchase from the U.S. 73%
78% of consumers in Mexico made an
online purchase from an international retailer
I found a lower Price
from an international
retailer on a domestic
marketplace
The Price is
better
internationally
The brands or
products I like are
not available in
Mexico
51% 45%47%

29. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Devices used to research and complete an online purchase
29
PRE SALE
2015U.S. Mexico
93% 93% 88% 88%
53% 39% 53% 34%
U.S. Mexico
U.S. Mexico
59% 48% 73% 57%
39%
Purchase
Research
Movers
Smartphone satisfaction

30. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Importance of factors when searching for and selecting
products online
30
Product Prices
81% - 86%
U.S. MX
Return policy
64% - 79%
Product selection
77% - 80%
Delivery speed
63% - 82%
Shipping fees
79% - 82%
Retailer reputation
68% - 82%
PRE SALE

31. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Comfort level with using chatbots for various shopping
experiences
31
62%
63%
Completing my order
New product updates
62%
Suggesting products
61%
Ordering products
65%
Getting product information
Emergers
PRE SALE

32. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Frequency of purchase by method
32
Constants
9% 11% 11%
15%
19%
35%
7% 7% 8%
14%
21%
43%
Search in
store, buy
online
Search
online and
in store,
buy online
Search
online and
in store,
buy in
store
Search
online, buy
in store
Search in
store, buy
in store
Search
online, buy
online
MX U.S.
SALE
2015
35%
=

33. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Importance of various shipping options when checking
online
33
Constants
SALE
22% - 58%
Same day delivery
Ability to tell retailer what
day I want my packaged
delivered
Ability to choose a
store location for
pickup
23% - 51%
34% - 50%
56% - 56%
Prefer weekend delivery
because they are typically
home to receive the
package
U.S. MX

34. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Preference for and usage of alternate delivery locations
34
POST SALE
U.S. MX
Use
41%
30%
Movers
Preference
52%
37%
2015
44%
Ability to receive your
package on the Schedule
delivery date
Flexibility to change
my delivery date,
after my product has
shipped
Flexibility to re-
route packages
after my product
has shipped
71% 80%
48% 66% 46% 61%

35. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Usage and preferences of returns
35
Constants
POST SALE
Returned an item by
shipping back to retailer
75% 46%
U.S. MX
of online shoppers made a
return in the last year
44%
22%
Returned an item to a store
45% 49%

36. UPS
solutions to
support
ecommerce
36

37. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Importance of various shipping delivery options when
checking online
37
UPS Marketplace
Shipping API:
Simplify your shipping
process, integrate your
online store with our
shipping technology
Time and day-definite
delivery options give
customers flexibility
Ability to tell
retailer what day I
want my packaged
delivered
51%

38. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Importance of having various delivery locations options
38
Ability to choose
a store location
for pickup
50%
Use
41%
Preference for and usage of
alternate delivery locations
UPS Access Point
Integrate convenient
delivery locations into your
online checkout
Convenient,
accessible, easy

39. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Preference for and usage of alternate delivery options
39
71%
48%
Ability to receive your
package on the Schedule
delivery date 80%
Flexibility to change
my delivery date,
after my product has
shipped 66%
Flexibility to re-route
packages after my product
has shipped 61%
UPS My Choice
Give your customers
more control over
their order delivery

40. Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.
© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
Usage and preferences of returns
40
of online shoppers made a
return in the last year
22%
Return policy
79%
Importance of factors when searching
for and selecting products online
The UPS Returns
portfolio:
Helps you provide an
easy, fast and efficient
customer experience

41. Thank
you!