Likely the only good outcome of the tariff wars and other developments in the global trade arena is that more companies are starting to recognize the importance of trade compliance professionals and technology. The old view that trade compliance is just paperwork that you can manage with Excel spreadsheets is not only outdated, but also risky and costly. What can companies expect with regards to global trade management in 2020? What are the key lessons learned from last year? How can technology help companies automate and streamline their trade processes?
Those are some of the key questions I discussed with Suzanne Offerman, Proposition Manager, Thought Leadership for ONESOURCE Global Trade Management at Thomson Reuters, during a recent episode of Talking Logistics.
Politics and trade intersect
Suzanne and I began our conversation by discussing the volatile year we experienced in 2019 and what 2020 may look like for global trade. Suzanne notes, “2019 was a very interesting year where politics and trade intersected, and I expect 2020 to be more of the same. We have trade wars with China, disputes with the EU over aircraft subsidies, and a new dispute with France over its digital services tax that could hurt U.S. tech companies. Now the administration is talking about imposing over $2 billion in punitive tariffs on high-end French wines and cheeses. And there is also the possibility that Brazil and Argentina, which were previously exempt from tariffs on steel, may lose that exemption. The landscape is rapidly changing and it’s not going away for 2020.”
Suzanne continues, “The question for trade professionals is are you in the best position to manage and take advantage of these changes? There are traditional ways such as looking at country of origin and valuations, but there are also newer ways using global trade technology.”
Automating trade management
I asked Suzanne to elaborate on what is happening with global trade technology. She says, “Trade automation and global trade management (GTM) technologies are certainly moving up the priority list for companies. Trade-related issues which were previously delegated to operations now have the attention of the C-suite. Trade professionals now have to go beyond trade compliance to planning because the tariff wars are having a significant impact on costs and there is potential for supply chain disruptions. Executives are also recognizing that trade automation has become a best practice for managing this rapidly changing environment. Companies want visibility so they can make better decisions.”
Globalization of trade management
Suzanne points out that executives getting more involved in trade planning and wanting visibility to their global supply chains has led to a globalization of trade management. Decisions once left to local operations are now being made on a more holistic, global basis based on visibility to supply chain activities and changing trade compliance issues such as tariffs. GTM platforms provide the end-to-end visibility required and enable companies to reduce their risk and save money.
Beyond GTM systems, Suzanne mentions several emerging technologies that companies are using to better streamline and automate their global trade management processes. She says application programming interfaces (APIs), for example, enable companies to access the real-time data they need to analyze trade issues and make time-critical decisions.
Suzanne also says companies can use artificial intelligence (AI) and machine learning to decipher patterns and make decisions with minimal human input. “For example, classifications are time-consuming and prone to errors. Automating this process with machine learning can save significant costs since classifications are tied to duty rates which are going up appreciably with the new tariffs. Companies can also use machine learning to analyze historical information to help predict lead times for shipments and identify variables that can affect them.”
Suzanne also discussed the benefits of natural language processing, predictive analytics and other advanced technologies.
Preparing for 2020
With all of the changing trade issues, the big question for companies is how to best prepare for whatever 2020 will bring. Suzanne had many great suggestions for steps companies can take now to prepare, as well as a wealth of information on the other topics we discussed. Therefore, I encourage you to watch the full video for all of her insights and advice. Then keep the conversation going by posting your own experiences and predictions for 2020.