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

Where's the Goods? Where's the Money?

Trust lies at the center of all trade finance transactions, but these days, with the credit crunch putting a dent in global commerce, safe harbors are in short supply.

Exporters offering payment terms to foreign buyers are more cautious, and banks that support cross-border sales are more stringent in managing the credit risks involved. Working capital and receivables finance, inevitably, are more expensive and less available.

That’s one reason why Supply Chain Finance (SCF) programs are increasingly popular. These strategies, which combine Internet platforms, software and programs, have been brought to trading operations over the past decade by a handful of large, global banks and a cluster of independent technology companies. SCF has demonstrated a capacity to mitigate risks and build trust, particularly in the huge Asia-U.S. and Asia-Europe trade routes on which it has been heavily focused.

It may be a critical, strategic moment for these banks and technology groups to expand their presence in the larger global trade arena. Some leading players in the field seem to think so.

To view the full article, visit WorldTrade Magazine at
http://www.worldtrademag.com/Articles/Article_Rotation/BNP_GUID_9-5-2006_A_10000000000000520081

2 Main Concerns for Importers & Exporters

Integration Point Inc.'s CEO, Tom Barnes, explains: "In the current global economy and political environment, there are two main concerns facing importers, exporters and the vendors who support them. The first is managing cost. The second is remaining competititve. In global trade terms, savings can be accomplished by managing inventories more carefully, reducing the time of transport, ensuring proper customs paperwork and minimizing tariffs. These opportunities require planning by the importer or exporter. They need comprehensive, up-to-date information and easy-to-use tools to make quick, accurate decisions as well as to increase visibility into their supply chain. Information must come from numerous third party sources and be compiled in a comprehensive manner. The collaboration of the various trade participants and effective tools that support the multiple languages of global trade are critical areas in which I expect to see accelerated progress in 2009."

The full article can be found in The Journal of Commerce 2009 Annual Review and Outlook.