Every four years, citizens of the United States are bombarded with political ads, opinion pieces, talking heads and automated telephone surveys. Even those of us who enjoy politics to some degree are worn out by the length and negativity of presidential campaigns.
One topic that routinely gets a great deal of coverage during the political season is the United States’ trade imbalance with other nations, particularly China. While it is true that the United States imports far more from China than it exports to it, the United States is the second largest exporter in the world, according to data from the World Trade Organization.
Exporting to global markets can mean the difference between growth and decline for companies competing in highly-saturated US markets. US companies must continually innovate to remain competitive and those innovations benefit consumers, businesses and governments around the globe.
At the same time, US products can also be among the most challenging to export. For example, high-tech military technology used by the US and its allies is highly restricted in terms of global trade and requires special licensing and screening to ensure compliance with US government regulations.
Dealing with the compliance aspect of global trade is only one part of the problem. Numerous parties are often involved in each transaction, each potentially bringing different languages and currencies to the transaction. Further, many companies have not developed direct contracts with steamship lines or airlines and thus must obtain capacity and rates through various intermediaries. In addition, the transportation opportunities for consolidation and optimization are often stunted due to the lack of global optimization capabilities in some transportation management systems (TMS) in the market today.
With all of this complexity in mind, here are seven technology best practices for managing US exports:
- Trade Compliance: Restricted party screening, license determination and management, duty and tax calculation, and document determination must happen early in the planning cycle so that all appropriate governmental regulations can be met and so that no avoidable delays will be encountered further downstream in the process.
- Multi-leg, multi-mode Optimization: Planning for shipments that span multiple countries and often require multiple legs, such as rail, dray, ocean and air, can be complex. Utilizing software that can seamlessly optimize all of these legs is vital to maintaining control over costs and having single-system visibility to the entire transaction.
- Carrier Schedule Planning: Rail, ocean and air modes require an additional level of management not necessary for most truck movements – schedules. Utilize technology that will automatically utilize these carrier schedules so that your shipments arrive on time.
- Execution: Generating and uploading documents, booking with carriers, visibility, and settling invoices are all vital components of the shipment execution process. Invoice settlement is often required before a shipment is released for final delivery by the dray carrier. Managing the numerous activities related to execution in a single system enables you to minimize delays and measure carrier performance in the same system used for compliance and optimization. Control tower visibility offers top-down, bottom-up door-to-door visibility and gathers operational data; it also enables collaboration to make rapid decisions when there are changes in status shipments while in transit.
- Customs and Census Integration: US exports that exceed $2,500 in value require submission to the Automated Export System (AES), the reporting system used by the US Customs. Automate this process by incorporating it into the shipment execution activities so that your shipments are not delayed while waiting for the Internal Transaction Number (ITN) from AES. Single-system visibility to these shipments allows you to take appropriate action if these shipments are rejected due to incorrect or incomplete AES data.
- Localization: Multi-lingual, multi-currency, and multi-UOM (units of measure) is a given for global trade transactions. Take advantage of those systems that offer native localization so all parties can see key business terms in the most appropriate context.
- Software in the Cloud: Working with third parties is a necessity in global trade transactions. Don’t be limited by your software’s installation boundaries. A TMS that operates in the cloud enables all of your agents and partners to participate in the screening, execution and clearance process in the most efficient, effective manner possible.
Transportation Management System and Global Trade Management software vendors have worked cooperatively for many years. However, these partnerships were often very limited and ineffective. Look for vendors that have established clear partnerships and can deliver a solution that behaves as a single, seamless application. In addition, be sure you can access your software in the cloud. Too many shippers remove global distribution boundaries only to find them replaced by software technology boundaries.
Doug Surrett is Vice President of Global Logistics at MercuryGate. Prior to joining MercuryGate in early 2012, Doug was the founder of Raelen Consulting, a consulting practice focused on TMS, Global Trade and WMS software selections and implementations. Prior to that, Doug spent almost a decade at a TMS software company as a Project Manager, Project Director and VP Global Consulting. Doug began his career at UPS in 1988, where he worked in Ops, IT and Customer Automation.