Megatrends and recent events have a huge impact on how international trade is developing. The globalisation in trade is ever increasing, as is also the introduction of regulations and security measures. A key question is how to reduce the risks whilst maintaining or improving the operational efficiency? Another is how to turn this into a competitive advantage and increased sales by controlling and knowing in detail what you trade across borders, end-to-end.
Globalisation: With an increasingly global footprint and pattern of supply chains, from R&D and sourcing to delivery of the end product or service, along with regulations to understand and adhere to, companies are exposed to larger risks as well as all the upsides of global sourcing and sales. Companies are facing the risk of substantial fees for non-compliance, and the benefits of global sourcing and sales can easily be eroded by such unforeseen costs and operational risks.
Digitalisation: Supply chains become increasingly digitised, which can enable handling trade effectively, given high quality in controls of trade data to comply with regulations. With digitalisation comes increased information transparency which emphasises the importance of correct trade data. Small discrepancies can cause wide-spread and large errors, exposing companies for significant penalties if identified in inspections. The capability of inspection authorities to identify anomalies in trade patterns also increases rapidly as they apply more powerful digital tools in their analysis.
Brexit effects and the trade barriers: Recent events have challenged the development of free trade which has been a general trend for decades. Protectionist winds can quickly impact the patterns of global trade and present new challenges for companies with global supply chains. Brexit is an example of where a border in one way or the other will be introduced, meaning that companies trading in and out of the UK will need to adapt. There will be changes to adapt to on both sides of the border, such as a need for goods passing the border to be declared. So how can companies prepare for this, to reduce the risk for non-compliance as well as to maintain operational efficiency, for Brexit and for other trade compliance challenges arising?
What can you do? Centigo assists companies in securing what is required to control risks and enable a smoother trade in the increasingly globalised and digitised world. We help companies to understand trade compliance risks as well as opportunities and to ensure correct trade data through the supply chain. Our experience is that improvements are best made and sustained through a cross-functional involvement, in which everyone shares a common understanding of the challenge and the solution. Our experience is that trade compliance improvement projects can be a vehicle of change to digitise a company’s processes and eco-system, introducing opportunities throughout the product lifecycle. In that sense, Brexit and potential trade wars could turn into a competitive advantage for your company – or for your competitors.
Is your company exposed to the risks and opportunities of trade compliance? Please contact us at Centigo, either in London, in Bangalore or our head office in Stockholm.
Ragnar Agnell, Centigo UK Limited