You can’t go a day without seeing global trade in the news, whether it’s new tariffs, trade agreements, NAFTA, BREXIT, or similar items. It’s one thing to read about these hot topics, however, it’s quite another to navigate the consequences for supply chain and logistics professionals. What is the potential impact on your supply chain? What actions should you take in response? How does global trade content help with this process?
Those are just some of the questions I discussed with Joely Callaway, VP Product Management and Customs Content, and Brendan MacCahill, SVP Trade Data Content, at Descartes Systems Group, in a recent Talking Logistics episode.
What’s Happening in Global Trade?
I started our discussion by asking what is currently happening in global trade. Brendan points out that perhaps the biggest news is that global trade is actually in the news. He noted that, “In the past, most people’s idea of global trade was just seeing a container going down the highway on a truck trailer. Now with all of the news about the impact of BREXIT and with the president’s daily comments or tweeting about NAFTA and other trade issues, people are starting to understand the impact that global trade has.”
Joely adds that there is so much uncertainty right now over what is real or not real in global trade agreements. She cited the examples of CETA, the Canadian-European Trade Agreement, which was enacted last year, and the uncertain outcome of the current negotiations over NAFTA, as well as the president’s recent comments about revisiting the Trans-Pacific Trade Partnership. There are also potential changes in Most-Favored Nation rates. These uncertainties equate to risk.
Challenges and Opportunities
Brendan says, “Supply chain professionals have to be aware of all of the current and potential changes taking place not just because of the impact on cost, but also because of the potential impact on infrastructure, supply chain design and opportunities for making their supply chains more efficient. Supply chain professionals need to proactively search for information to help them take advantage of these opportunities.”
Joely notes there is a lot of confusion in the marketplace over which countries are impacted or potentially excluded based on new tariffs and anti-dumping rates. “It’s a lot to get your head round. Companies need to understand these changes because it directly impacts their cost basis.”
Global Trade Content in Action
There are many different ways companies are using trade content data. Joely says, “Any company that is moving goods across borders is integrating this data. Whether that is a large manufacturer monitoring trade compliance of an item, or a company with a commercial or proprietary trade management system who is importing this data. One of the hottest areas out there is in the e-commerce space, with duty and tax data, as well as sanctioned party data, being loaded directly into the shopping cart so goods don’t get returned. A lot of companies are also using this data to analyze their supply chains.”
Brendan adds that, “The value of these solutions is obvious to the C-suite. What nation should I be getting my supply from? What nation is ripe for selling more of my product into? Operatives are gathering and collating this information and pushing it to the C-suite so the CEO and CFO can make better strategic decisions.”
Joely also comments that this data is being used to keep companies from getting into trouble. “You don’t want your company’s name in the headlines for trade infractions, and the fines can be considerable.”
How are companies gathering all of the relevant trade data from which sources? How are they using this information to mitigate risk and take advantage of opportunities? What should companies be doing now to deal with the significant uncertainties of changing global trade policies? For answers to these questions and more, watch the full video episode and then post a question or comment and keep the conversation going!