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Global Supply Chain

What does your level of import and customs automation say about you?

Ned Blinick

Chief Product Officer

I just read a most recent report "All The Right Moves: Importers Turn to Self-Filing - Import Benchmark Study" by American Shipper and BPE Enterprises. A major conclusion of the report is that companies that automate their GTM and Trade Compliance processes are significantly more attuned to their organization's import performance than importers who out-source to their 3PLs and Customs Brokers their GTM, customs entry filing and follow up.This report resonates with me because I truly believe that today, importers are in the position to take control of their import supply chains through automation with Global Trade Management (GTM) and Global Trade Compliance solutions. These GTM and trade compliance solutions deliver incredible capability, flexibility and visibility and are highly scalable to fit almost any company size and budget.In a previous life I ran a mid-size importing company. We directly imported approximately 2,000 FCLs and executed about 1250 entries into Canada and managed a similar number of shipments and entries on behalf of our overseas suppliers. Prior to automating our processes we were dependent on our suppliers, freight forwarders, carriers and customs brokers for information on the status of our inbound shipments. In that pre-automation environment we needed to constantly monitor our suppliers and service providers to understand what was happening to "all" our shipments as they made the journey from supplier to destination. It required our logistics and trade compliance teams to constantly reach out to the external environment for updates. When we automated our processes - with what eventually became 3rdwave - we were able to significantly re-architect our import logistics to a "management by exception" environment and streamline the entire import activity and improve visibility, flexibility, inventory management while lowering operational costs and inventory related costs. That was in the 1980s and the cost to automate logistics and trade compliance processes was prohibitively expensive for small/medium size enterprises (SMEs)In 2016, importers have many more options than we had back in the 1980s and 90s to automate the import process and achieve the benefits. The cost of acquiring GTM and Trade Compliance automation is no longer beyond the reach of SMEs - to the contrary, there are solutions that are very affordable and powerful.I want to declare that I am agnostic to whether an organization becomes a self-filer or not. However, I strongly believe that with the proper GTM and Global Trade Compliance automation solutions, self-filing is a very logical and intuitive outcome. Companies that self-file have a much greater level of control over their import supply chains. It is expressed in the way they do their work and how they manage their performance.In its broad context the benchmark study shows was that large shippers are much more likely to have GTM and Trade Compliance automation solutions than SMEs. Importers that have these automation tools are much more concerned about key metrics than smaller shippers. Three (3) findings from the study illuminate what I am talking about:

  • Large shippers are almost 40% more likely to measure their import landed costs. This means that they have a much greater understanding of their COGS and therefore better understanding of their profitability. Companies that don't have visibility over import landed costs operate at a distinct disadvantage to the competition because they don't know where the opportunities are to improve their cost performance and competitive posturing.
  • Large shippers are 73% more likely to measure errors with CBP and PGAs. This allows them to improve their customs related performance and improve their risk profile with CBP and the related PGAs. A better risk profile with CBP and PGAs means fewer problems at the border and increased speed through the border. Companies that can increase the average speed at the border are able to translate this into better inventory management and customer service.
  • Large shippers are 168% more likely to take advantage of duty saving opportunities (in terms of $ savings) than small/medium shippers. This includes being able to understand the implication and opportunity of FTAs, duty drawback, and lower customs entry fees.

Each metric provides and organization with opportunities to save money and improve their processes.Automation is the key to being able to anlyze, visualize and contextualize information. Just being able to quickly and routinely access these 3 basic metrics provide organizations with incredible understanding and context to their business. And, this translates directly into tactical and strategic decision making, market power and competitive advantage.What does your level of GTM and Trade Compliance automation say about you? With GTM and Trade Compliance automation your organization is focused on improving its and financial capability, mitigating organizational risk, protecting and improving brand, and increasing global supply chain efficiency. With minimal or no GTM and Trade Compliance automation your organization is slipping in terms of operational efficiency (visibility, cost control, customs management), profitability optimization, and reputation at CBP and PGAs.

Ned Blinick is Chief Product Officer at 3rdwave. He is a founding principal in Blinco Systems Inc. the parent of 3rdwave. His career has spanned 25 years as an importer where he pioneered many new global supply chain concepts such as direct container delivery, vendor managed inventory (VIM) programs, and supply chain visibility projects. He is passionate about creating solutions to help importers and exporters improve their global supply chain capabilities through simplified, innovative Global Trade Management and Trade Compliance solutions. If you are interested in learning more, please drop us a line at solutions@3rdwave.co.