Global Trade Management: Automation time

According to recent market surveys, too many global shippers are still using a mix of manual processes and homegrown systems to manage global trade. Our analysts say “enough is enough.”

Aware of the complexities of running a global supply chain, today’s global shippers generally take one of three routes to import and export compliance and management.

Some off load the task to their third-party logistics (3PL) providers and freight forwarders, while others use spreadsheets and manual processes to tackle the issues. However, a smaller portion has turned to global trade management (GTM) software to streamline and automate processes related to customs and regulatory compliance, global logistics, and trade financing.

According to ARC Advisory Group’s recent Global Trade Management Market Study, international trade has grown at almost three times the rate of global GDP over the last 10 years. In turn, this increased volume of trade has made manual global trade processes insufficient in many cases.

Concurrently, global expansion has increased the complexity of trade regulatory requirements placed on multinational corporations.

According to ARC’s findings, these market dynamics certainly improve the GTM value proposition and should increase demand for the solutions.
However, shippers have been somewhat reluctant to adopt GTM.

According to SCM World’s recent Managing Global Trade: Rising Importance but Lagging Execution survey, 75 percent of companies trade across more than 10 countries and that nearly half (48 percent) trade across more than 50 countries. Almost half (48 percent) of respondents say that an inability to control global transportation costs and the lack of visibility of global shipments moving through the global supply chain are among their top five business challenges.

Key challenges these shippers face include delay of shipments by customs (80 percent) and unpredictable lead times on international deliveries (90 percent). And while 57 percent of respondents say complying with global trade regulations is a top concern, less than 4 percent have automated their import compliance functions and just 12 percent collaborate with extended global trading partners in an automated fashion.

According to SCM World’s findings, the most common way of handling trade management processes and the information needed to support such processes involves some combination of manual work in spreadsheets, clunky homegrown systems, and arm’s length relationships with third-party partners.

“Truly successful global trade management depends on getting both the visibility problem and the compliance problem right,” says Kevin O’Marah, SCM World’s chief content officer. “Without accurate and up to date content for compliance purposes, money will be wasted.”

Over the next few pages we’ll explore the adoption rates of GTM, explain the critical role that such solutions can play in the smooth running of a global supply chain, and hear from a shipper that has moved from manual, homegrown processes to a full blown GTM.

Global disconnection
With such a high degree of shippers relying on disconnected global trade compliance and management solutions, a lot of money and time is being lost as companies struggle to keep up with new rules, regulations, and laws.

“Delivery holdups at the border and at customs, regulatory issues, visibility problems, and myriad other challenges are making global shipments harder and harder to manage,” says O’Marah. “When shippers use a slew of manual processes, phone calls, and rely on individuals to remember things, even the shortest global supply chains can run into trouble.”

Those potential trouble spots haven’t gone unnoticed by shippers. According to ARC, demand is especially strong for solutions that support special-duty programs such as free trade and foreign trade zones.

Free trade functionality automates classification processes that support duty minimization, ARC reports, while foreign trade zones offer opportunities for companies to reduce or delay duty payments, resulting in lower operational and inventory management costs. Other functions that shippers need help with, and that GTM handles, include maintenance of product classification databases, denied party screening, export license management, and supply chain security program compliance. 

According to William McNeill, principal research analyst at Gartner, Inc., there’s a resurgence in the number of shipper inquires around restricted party screening (the process of screening those parties involved in an export transaction for the purpose of complying with the safety standards) and export compliance.

“Now that the economy is improving, companies that are doing more international business are re-examining their export policies in an effort to mitigate the risks,” says McNeill.

Holistic view
For the most part, investment in global trade solutions remains highly tactical in nature, with companies finding specific ways to mitigate potential risks without looking at the more holistic, global picture.

Most remain focused on restricted party screening, says McNeill, who also sees a high degree of shippers relying on their 3PLs and freight brokers to identify and address any potential risk areas. This can get shippers into trouble, he notes. “Just because you outsource the process doesn’t mean you shouldn’t have visibility into it.”

O’Marah concurs, and says GTM provides that visibility while also maintaining the all important content (customs, taxes, tariffs, denied parties) that is cross-referenced to ensure compliance. “Keeping track of all of the changing rules is the hardest aspect of global trade right now,” says O’Marah.

“Through our own research, we found that every shipper could tell a story of being caught by surprise by a new rule or regulation. Those issues can really hurt.”

Ultimately, O’Marah says that a good GTM’s ability to check against all possible issues and conditions in advance—before any problems can arise—is what makes such systems invaluable. And as global supply chains continue to grow and expand, the need for such automated oversight is sure to increase. Looking ahead, O’Marah says he sees great potential for a more holistic approach to cloud based GTM—a development that could make content updates, transparency, and trade partner collaboration easier and more accessible in the 24/7, web-based format.

“If shippers had access to a layer of universal content that was changed and updated consistently without the need for manual updates,” says O’Marah, “there would be greater transparency and, perhaps, more companies interested in replacing their manual trade systems with
automated options.”

McNeill also predicts a coming convergence between GTM and sourcing/general visibility applications. “When companies examine either compliance software or GTM, they should do it with an eye toward their organization’s overall logistics strategy,” says McNeill.

“It should be based on their existing logistics applications and those that can help improve their sourcing and visibility. This is yet another direction that GTM may be headed in the future.”

Source: {source}

Article Topics
Global Trade Management   GTM   March 2014   Supply Chain Software   All topics


Comments
You must be logged in to post a comment. Login.

About the Author
Bridget McCrea, Editor
Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996 and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at [email protected], or on Twitter @BridgetMcCrea
 
Latest News
10 Questions to Ask Prospective Warehouse Management System Vendors
During your decision-making process with WMS vendors, as well as asking about functional requirements, make sure you ask questions about system performance and scalability, security and data protection,…

Onnit Customer Success Story with SkuVault Warehouse Management System
Onnit is a brain, workout, and health supplements company based in Austin, TX., learn how a SkuVault Warehouse Management System and ShipStation integration helped the business scale and decrease mis-ships…

RightHand Robotics Picking Up Where Amazon’s Kiva Systems Left Off
RightHand Robotics, a Somerville, Mass-based company founded in 2014 by Leif Jentoft and Yaro Tenzer, closed a $23 million Series B round for its RightPick robotic piece-picking technology.

Honeywell and Fetch Robotics Deliver Autonomous Mobile Robots to DCs
Expands smart robotics portfolio to help warehousing operations fulfill growing e-commerce orders more efficiently.


 

24|7 Pro Team

The 24|7 Team is your direct pipeline to solutions for your business challenges. It's your opportunity to have supply chain and logistics experts look at your specific challenges and needs, and give you free, no-obligation advice, solutions, and information.

The 24|7 Team will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

1
  Choose a topic for your RFP

Transportation RFP/RFI

The Transportation RFP is your direct pipeline to solutions for your transportation challenges. It's your opportunity to have logistics experts look at your specific transportation challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect software or system can be an indomitable challenge. Using this transportation/TMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

Warehouse/DC Management RFP/RFI

The Warehouse Management Systems (WMS) RFP is your direct pipeline to solutions for your WMS challenges. It's your opportunity to have logistics experts look at your specific WMS challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect WMS solution can be an indomitable challenge. Using this WMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your WMS Request for Proposal list.

Supply Chain RFP/RFI

The Supply Chain RFP is your opportunity to have logistics experts look at your specific challenges and needs, and receive free, no-obligation advice, solutions, and information. It simplifies finding a pool of likely partners, building your knowledge base, and preparing your Request for Proposal list. The companies in the Logistics Planner have agreed to respond to your request for in-depth information and follow-up, and your request is totally confidential.

Software/Technology RFP/RFI

The Software/Technology is your direct pipeline to solutions for your logistics information technology challenges. It's your opportunity to have logistics experts look at your specific technology challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request. Whether it's WMS, TMS, Mobile or Cloud, our pros can help.

The companies listed below have agreed to respond to your request for in-depth information and follow-up. Your request is totally confidential.

Executive Education RFI

The Logistics and Supply Chain Education RFI can help you identify the schools, coursework, continuing education, distance learning and certification opportunities available from leading logistics educational institutions.

Upgrade and improve your logistics and supply chain skillsets. Whatever route you choose—advanced degree, executive education, certification or distance learning—the time and money you invest in your education today can pay off in continued career success tomorrow. Contact leading universities and professional institutions for the information you need to prepare for the future.

Third Party Logistics RFP/RFI

This 3PL Request for Proposal (RFP)/Request for Information (RFI) can help you find the 3PL and 4PL providers that can meet your specific 3PL service challenges and needs. The 3PL companies below will provide free, no-obligation third-party logistics advice, solutions, and information.

Ask your 3PL questions, you'll get answers. Simply complete the information, and detail your 3PL challenges. Then, check off the third-party logistics companies that you want to review your request.

1. Choose an RFI topic.
2. Enter your contact information and challenge.
3. Select companies and optional categories.
4. Submit.


2

Your Information



Your Challenge, Problem or Request *

3

Select Transportation Companies

  • Select All

  • 3Gtms
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • One Network
  • Pitt Ohio
  • Purolator
  • Quintiq
  • SEKO Logistics
  • SMC3


Select Relevent Categories

  • Air Freight
  • Intermodal
  • Motor Freight
  • Ocean Freight
  • Rail Freight
  • TMS

Select Warehouse/DC Management Companies

  • Select All

  • 3PL Central
  • Apex Supply Chain Tech.
  • Honeywell Intelligrated
  • Kuebix
  • Legacy Supply Chain Svs.
  • Swisslog
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Auto ID & Data Capture
  • Automation
  • Conveyors & Sortation
  • Lift Trucks
  • Packaging & Labeling
  • Pallets & Containers
  • Shelving & Racking
  • WMS

Select Supply Chain Companies

  • Select All

  • 3Gtms
  • 3PL Central
  • Amber Road
  • Apex Supply Chain Tech.
  • APICS
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Frontier Business
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • Logility
  • One Network
  • Purolator
  • Quintiq
  • SMC3
  • Synchrono
  • TAKE Supply Chain
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Global Trade
  • Inventory Management
  • Risk Management
  • Sustainability

Select Software/Technology Companies

  • Select All

  • 3GTMS
  • 3PL Central
  • Apex Supply Chain Tech.
  • BluJay Solutions
  • Honeywell Intelligrated
  • Frontier Business
  • Kuebix
  • Logility
  • One Network
  • Quintiq
  • SMC3
  • Swisslog Logistics
  • Synchrono
  • TAKE Supply Chain
  • Zebra Technologies


Select Relevent Categories

  • ERP
  • Sales & Operations
  • Sourcing/Procurement
  • Optimization
  • Transportation Mgmt
  • Warehouse Mgmt

Select Executive Education Choices

  • Select All

  • Graduate Courses
  • Online/Distance
  • Executive Education
  • Certifications
  • Undergraduate
  • Seminars
  • Associations
  • Conferences
  • Tradeshows


Select Third Party Logistics Companies

  • Select All

  • 3PL Central
  • Landstar
  • Legacy Supply Chain Svs.
  • Purolator
  • SEKO Logistics
  • Westfalia Technologies


4
 

24|7 Company Profiles