10 Ways to Reduce the Cost and Risk of Global Trade Management

In today’s uncertain times, one thing remains certain: There will always be changing global trade rules and technologies. The following are 10 of the top ways we believe companies can ensure they are being as efficient, safe and cost-conscious as possible in the short run while building a sound infrastructure for future needs.

With the goals to reduce cost and risk in the supply chain, automation and working closely with partners are the two most practical areas of opportunity.

Below are the abbreviated 10 ways to reduce cost and risk in global trade management. For the full version, visit the Journal of Commerce website

1. Companies must validate more things.

2. Importers and exporters have more direct accountability.

3. Electronic submission is required.

4. Savings opportunities can be realized by having proactive plans.

5. Enabling scalability so companies can expand their trade management capabilities gracefully.

6. Build a virtual network of partners, vendors, agencies, etc.

7. SaaS-based systems are cheaper and easier to work with.

8. Supply chain security is critical.

9. Keeping the entire trade picture in view.

10. Part of corporate social responsibility reporting.

Managing global trade will continue to be laden with complexities and changes from all sides of the puzzle: governments, trading partners, service providers and related partners, nongovernmental interest groups and consumers. As such, importers and exporters are challenged to provide global trade processes that incorporate all the collaborating parties, changing laws, new and historical data and accomplished work from the virtual network. Utilizing automation and partners is more necessary than ever to streamline processes while ensuring the highest levels of safety and compliance.

Insourcing Global Trade Management

Most importers and exporters are careful to manage inventory, tariffs and compliance. In a recent survey of trade consultants conducted by Integration Point, every respondent (100%) indicated that their client companies perform denied party screening and recognize foreign trade zones. However, most outsource this work to consultants, freight forwarders or other third party service providers. The cost of internal automation and process control has been too high for most importers and exporters to do on their own. Acquiring and maintaining a trade management system and data has been too much of a burden for smaller companies to adopt on top of their core business needs within manufacturing, sales and marketing and supplier relations.

Now however, with increasing government fines and liability being imposed, companies often don't want to entrust a third party for all compliance requirements. In a recent case, Cabela's, an outdoor equipment outfitter based in Nebraska, agreed to pay a $680,000 civil penalty to settle allegations that it committed 152 violations of the Export Administration Regulations. The law stipulates that even jail time may be imposed on offenders. As such, compliance failure is just too risky for any sized importer and exporter.

To avoid such liabilities, importers and exporters must be able to clearly prove that they applied "reasonable care" to all traded goods. While third party (outsourced) solutions can do this, many importers and exporters want tighter control of the process and paperwork. For example, every respondent in the Integration Point survey indicated that they want to store product certificates for future reference, even if the compliance checks are being done by a third party.

To view the full article, visit Industry Week at http://www.industryweek.com/articles/insourcing_global_trade_management_18650.aspx?Page=2&SectionID=4?ShowAll=1

Five Mistakes to Avoid When Screening Exports

Mistakes in exporting can be costly. To ensure your company is properly screening all exports, and avoiding the chance for penalties, avoid these top five common mistakes when screening your exports:

1. Believing that screening is not needed
2. Performing an incomplete search
3. Using only a few lists for screening
4. Focusing on false positives
5. Utilizing only one search method

To get more details on these 5 common mistakes, visit Integration Point Inc.'s Media Tip Sheet at http://www.integrationpoint.com/documents/IP_5MistakestoAvoidWhenScreeningExports.pdf