Even if an agreement is eventually reached — which isn’t looking good — trade disputes between the U.S. and China have left wounds that may not heal.
Reuters reports that recent figures from the U.S. Department of Agriculture indicate that farm exports will drop by $1.9bn in 2019. On the other end of the spectrum, in retail, clothing exports from China increased by nearly eight percent to almost $495bn as companies advanced orders in anticipation of heightened tariffs.
Even top market performers like Apple are feeling the impact, citing trade tensions with the U.S. (among other reasons) for its weak performance in Greater China during its crucial holiday quarter, according to Business Insider.
In a climate where threats against global trade either quickly materialize or fizzle out as part of hardline foreign policy negotiations, companies involved in international trade must now contend with an unprecedented amount of uncertainty and risk as the “new normal.”
Further, as geopolitical factors drive changes within global trade regulations and denied-party sanctions rapidly evolve, it has become nearly impossible for organizations to effectively ensure compliance. It has also become more costly than ever as penalties for denied-party infractions, for example, reach record levels.
With uncertainty mounting, there is an urgent need for logistics and supply chain professionals to have a more comprehensive understanding about current and potential international trade developments due to the likely impact on global sourcing, infrastructure and operations. Utilizing global trade content — solutions packed with everything from the latest import and export data down to the bill of lading, to databases for international trade regulations, rulings and duties — can help companies gain greater visibility and confidence within their trade operations.
Below are three examples of how different companies can work smarter and gain a competitive advantage armed with global trade content:
In a sector where customers can come from virtually anywhere in the world, global trade content helps ecommerce companies remain compliant with international trade agreements and avoid business transactions with restricted parties. To do so, many companies are loading duty and tax data, as well as sanctioned-party lists, directly into the back end of their shopping carts.
Global trade content is also beneficial in helping e-commerce companies better manage against difficult and costly cross-border returns. By disclosing duty and tax rates upfront during checkout, international customers understand the true cost of sale and are less likely to reject a shipment due to unexpected fees.
Many large manufacturers use global trade content to more deeply analyze and evaluate their supply chains — particularly the competitive landscape.
For instance, imagine that one organization sources a product from a certain country. Using global trade content, that organization is able to determine that one of its top competitors imports the same product from a different country.
Through that data intelligence, the organization can now investigate why (i.e., duty issues) and evaluate the need to make adjustments to its own operations as a result.
For Global Carriers or NVOCCs
Within this category, global trade content has proven effective in helping global carriers and NVOCCs determine market share.
For example, organizations may utilize the data to look at port pairs and use the insights to assess yield management. They may also bring global trade content data internally — as part of a proprietary data set — and can link the information up to existing data sets.
Lastly, carriers and NVOCCs have even used global trade content to support service contract reconciliations.
In order to achieve higher trade compliance rates, leverage market research, reduce the likelihood of transacting with restricted parties and minimize duty spend, information is key.
Global trade content can help logistics and supply chain professionals chart a more certain and profit-driven path forward — one that is better positioned to withstand what comes next in the uncertain global trade economy.
Joely Callaway is vice president of product management and customs content, and Brendan McCahill is senior vice president of trade data content for Descartes Systems Group.
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