Global Trade Management: A Critical Function for Economic Recovery

As the world’s economy slowly recovers, one of the most important business functions will be global trade management. Just consider the fact that more than half of both cost of goods sold and sales revenues for every major industry--including automotive, industrial goods, electronics, consumer products, chemicals, food and beverage and retail--is generated across borders. Even more important, the leading companies in each of these groups--Toyota, Caterpillar, Intel, Apple, Coca-Cola, Dow and Wal-Mart just to name a few—owe much of their success to their mastery of global trade management.

Each of these companies has a global trade manager or similar senior position that allows goods to move across borders as easily as they might move among the states in this country. Because of this global trade management capability, these companies can:

• Source materials anywhere in the world at the lowest landed cost
• Manufacture finished goods where labor, taxes and production costs are lowest
• Leverage the benefits presented by free trade agreements around the world
• Minimize import duties and shipping delays by leveraging the harmonized tariff code
• Optimize quotas where they limit the amount of a product that can be imported
• Use the harmonized code to lower the landed cost of their exports around the world
• Identify any “denied parties” that the U.S. government restricts from purchasing certain goods
• Comply with the ever-changing security regulations that prevent terrorists, rogue nations, smugglers and other criminal elements from exploiting world’s freight transportation system for evil purposes.

Global trade managers responsible for dealing with all of these complex issues depend heavily on global trade management software to automate importing and exporting processes. There are many global trade solutions available ranging from plug-in modules for leading ERP systems, to best-of-breed solutions, to software-as-a-service offerings, to complete global trade management outsourced services. The right choice depends on the extent of the user’s global trade activities, but smart companies expect that these activities will grow. Whatever global trade management solution a company chooses, it should be able to:

• Access the entire, updated harmonized tariff code
• Link the HT Code to actual products and materials that a company buys and sells
• Optimize landed cost for all imports and exports
• Support all trade documents and electronically file all security documents required by any nation’s Customs service
• Audit every transaction to show that required processes and procedures were followed
• Be accessible online to all likely users including purchasing, logistics, sales, etc.

In short, global trade management solutions and personnel will be the key to accelerating bottom line improvement in the coming recovery.