Any global organization must orchestrate the movement of goods anywhere in the world — with the agility to respond rapidly to demand changes in an ever‐changing and volatile trade environment. Modern technology advances now enable you to decrease the risk of cross‐border compliance issues and reduce costs by simplifying customs duty savings programs.
Time for a Disruptive Change
The one constant in life is change. We all know those words, although many people don’t realize they date back some 2,500 years to Heraclitus. There’s a reason why his words still resonate today – change is constant in all aspects of life and business. Certainly, that’s true in supply chain and logistics, even though most would prefer a static landscape when it comes to the supply chain because that predictability would make planning so much easier.
Trade Compliance is a Challenge
Global trade compliance and management, however, are dynamic and complex. Moving goods globally is challenging due to politics and economics. Everything from new regulations, business ethics, differing degrees of quality control, real-time visibility and other emerging new technologies impact the ability to plan and achieve global trade compliance.
Rewards to Those Who Seek the Opportunity
The reward for getting it right is significant. International trade is growing rapidly. Greater complexity requires greater efficiency in connecting all the players and touchpoints for a shipment, including transportation providers, brokers and third-party service providers.
Ok, so it’s complex. How then can importers and exporters address this increasing complexity? That’s where modern global trade management applications—or GTM applications if you use the shortened form—can help organizations gain an edge in the market while greatly increasing efficiency.
A GTM solution needs to address many components, including regulatory compliance, import and export processes, and financial information while helping to enhance the organization’s productivity.
A true GTM solution should offer many capabilities, but let’s start with four key areas companies need to address for success: Export, Import, Duty Management as well as direct Customs Declaration Filing.
The international trade journey starts where goods leave a country. Over the years, exports have increased significantly as organizations are tapping more into foreign markets. More markets in more countries across the globe represent an increase in export compliance challenges and a corresponding increase in potential regulatory violations. That often stops exporters in their tracks as they are challenged to screen potential customers against restricted party lists, determine license requirements, perform export compliance checks, and generate international trade documents. The right approach to GTM will automate the end-to-end export process to reduce export compliance risks and improve export efficiencies while addressing:
One e2open customer, Allied Electronics, increased export screening from 10% to over 90%, while improving shipping from three-day to same-day speed, all while managing an increase in demand.
Almost every export has a corresponding import. With global trade on the rise, an effective GTM application equally needs to proactively manage the import compliance process. Sourcing products from foreign markets has helped companies to diversify their portfolio, reduced their production costs and brought consumers choice and lower prices. However, as well as advantages, importing also brings challenges. Like for exports, importers also must comply with complex, country-specific trade regulations. They must ensure that any delays at the border due to incomplete customs declarations or incorrect shipping documents are avoided. To do this efficiently, importers also manage the seamless information exchange between partners, like the exporter, freight forwarders, shipping agents and the like. Once received, they must be empowered to verify the regulatory compliance of these trade documents and the trade data received in real-time.
They also need to calculate variable duties, taxes and fees to get clarity on total landed costs. A GTM import application should automate these import activities and provide critical information for decision-makers, including the data needed to measure key factors including:
One e2open customer, Leggett & Platt, was able to reduce its product costs by 2-3% by centralizing import management while improving visibility to over 7,500 annual shipments.
Minimizing duties can offer significant financial returns that go straight to a company’s bottom line. These opportunities include preferential trade programs, EU Customs Warehousing programs, Foreign-Trade Zones in the U.S., and duty drawback. Many organizations, however, fail to take advantage of these opportunities because they believe the process and paperwork involved are too difficult to manage. They could be right — if they don’t use a GTM application that simplifies and automates the qualification and administration process of preferential trade programs, including:
One e2open customer increased workforce efficiency in product classification, document generation, NAFTA qualification and supplier solicitation. They also generated savings in duties which they were able to pass on to their delighted customers, reducing prices.
Most companies prefer to self-file with customs because it reduces brokerage and duty costs. However, it requires up-to-the-minute knowledge of trade regulations, a specialty not commonly available in-house. Self-filing is also labor-intensive. However, the right GTM Customs Filing approach allows the user to consolidate all trade data into the correct filing format and then submit it to customs authorities worldwide—with one click. That’s the standard. But today, companies must also validate the accuracy of the data originating from multiple partners along the supply chain before even starting to create a customs declaration. Only then can they ensure that the data submitted to authorities is accurate, timely and complete.
One e2open customer, FormFactor, streamlines customs filing globally and benefits from significant process efficiencies, improved trade compliance, speedy and straightforward customs filing, as well as unparalleled visibility.
Tying It All Together
In the 21st century, staying competitive means consistently improving supply chain agility, compressing cycle times, optimizing global sourcing decisions, lowering distribution costs, and delivering on increasingly complex customer demands.
e2open can help here with an integrated, cloud-based GTM platform that plans, optimizes, and executes all aspects of global trade. This includes incorporating our sourced, country-specific regulatory trade content.
Contact us if you’re interested in hearing more about our GTM solution.