A new, cloud-based solution leverages global trade compliance to streamline trade and logistics. The global supply chain might never be the same – and that’s a good thing.
Global Trade Management (GTM) can be defined as the practice of streamlining the entire lifecycle of global trade across order, logistics and settlement activities to improve operating efficiencies and cash flow. Separately, IT research firm Gartner defines foreign/global trade compliance (GTC) as “a category of software that addresses the rules and regulations and trade-specific costs of conducting cross-border trade.” Until now, perhaps, those two concepts were considered separate tasks, undertaken in different ways, by different providers and for different reasons. That’s about to change.
At a time when the global trade markets have been roiled by myriad variables, two veteran solution providers have come together to offer a cloud-based global trade management system like no other. Charlotte-based Integration Point and New-York-based GT Nexus, having been aligned in an informal partnership for several years, are now developing an integrated offering that they say will be the most comprehensive global trade management solution in the industry.
By itself, Integration Point has been in the business of providing cloud based global trade management (GTM) solutions since 2002. One of the earliest providers to offer global trade compliance solutions delivered over the internet, its roots are firmly planted in the US Foreign-Trade Zone (FTZ) space. A team of more than 600 subject matter experts serve more than 600 customers doing business in 100 countries.
GT Nexus bills itself as the world’s largest cloud-based B2B network, with a platform that delivers supply chain management and global commerce solutions that include Supply Chain Planning, Supply Chain Collaboration, Transportation Management, Procure to Pay Automation, Supply Chain Finance and Supply Chain Visibility, just to name a few. In business since 1998, GT Nexus is headquartered in New York with 1,000 employees worldwide, managing $500 billion in goods, with more than 28,000 businesses and 100,000 worldwide users.
Stronger, Smarter Together
Operating on the premise that the supply chain is a network, the two firms agree that business networks must be flexible. For its part, says Kevin Shoemaker, Integration Point’s vice President of Global Solutions, “Integration Point’s trade compliance platform was designed in the cloud for companies who need to keep up with expanding global markets and an ever-changing regulatory environment.” Beyond this, he adds, “We provide the tools shippers need to compliantly move goods to the end customer, no matter the location. By utilizing our platform, importers and exporters alike can access trade regulations for over 190 countries; analyze their global trade for risk and savings opportunities; manage imports, exports and direct filing requirements; and fully leverage duty suspension programs across the globe on one integrated platform.”
GT Nexus regards its strength as the ability to provide agility and end-to-end visibility. According GT Nexus, it is essential to seamlessly connect the entire supply chain: both upstream and downstream. The foundation to making this all happen is end-to-end connectivity, visibility, and network-wide collaboration – including suppliers, customers and other supply chain partners. By integrating the physical and financial supply chains, companies significantly improve working capital and ensure a resilient supply chain.
Together, the two firms intend to marry their offerings into a single service that allows companies who import or export raw materials or finished goods to comply with import and export regulations and trade agreements. That’s because the shifting landscape of regulations require up-to-date trade content to properly manage and plan for customs duties, import and export compliance requirements and report international trade data in an efficient and compliant manner.
The aim of the new service includes ‘global trade compliance can be leveraged to help manage a global supply chain.’ But, what does that mean? According to Heidi Benko, Vice President, Product Solutions Strategy and Marketing at GT Nexus, “Compliance becomes more strategic when you connect it directly to your supply chain processes. Once the trade compliance part of the network is addressed, supply chain transactions are made cleaner and more compliant.” She continued, “The process is digitized, making documents more accurate and streamlining processes. For example, HS codes and duty rates are automatically populated into invoices to expedite customs filings. Documents and data are checked early and often for accuracy. All parties in the transaction are viewing and utilizing the same documents and data vs. data rekeying.”
The goal is to allow companies to utilize better information in the form of trade content and analytical tools, and then benefiting from more informed decision making. By doing so, trade compliance becomes yet another lever available for improving the performance of global supply chains.
It starts with trade content sourced from governments, typically via automated feeds, so that whenever an update is made at the source, Integration Point receives those same updates as soon as they are available. Once trade content is received, it goes through a rigorous multi-step validation process to ensure that all content delivered to the end user is accurate, complete and updated in a timely manner.
The integrated Global Trade Management Platform:
There are two major mistakes that shippers make on the compliance side. The first is assuming that Customs will never knock on their door or thinking that their Customs Broker is keeping them in compliance. And, trade is heavily impacted by regulatory issues. In fact, the World Economic Forum says that cancellations happen in nearly 5 percent of sales due to export license delays.
Worse, many companies lack a standard way to manage trade compliance across the entire organization. In today’s global economy, companies doing business in multiple countries need a platform that provides visibility into their global compliance operations and the ability to institute common, compliant procedures for how they transact business.
The Integration Point/GT Nexus offering works like this: Suppliers and other trading partners are on-boarded and checked against Restricted Party lists prior to the transaction. Parts and items are uploaded and classified. Then orders, invoices and shipment parties are automatically checked against Restricted Party lists. Trade data such as HS codes and duty rates are populated onto documents ensuring documentary accuracy and compliance. Finally, the customs entry is created and filed directly from the platform, or pre-entry is electronically sent to the broker.
“For sales and supply chain departments, this is where the trade compliance rubber meets the road. By having trade content integrated into an export management system, like we do in our platform, export departments would have visibility well in advance of a license requirement,” says Shoemaker, adding “The integrated solution not only provides visibility into the license requirement, but also validates if a license is required and if the exporter has one on file in our system. Having the right information at the right time is where we see the real value in trade compliance across the supply chain.”
The new partnership brings many cutting edge features to the supply chain. The Trade Lane Analyzer, for example, tells shippers ‘what they need to know.’ Shoemaker adds, “We are very excited about bringing a tool like Trade Lane Analyzer to the market. Trade Lane Analyzer is designed to address many of the issues we address – namely, having the right information earlier in the supply chain which allows for taking action before issues arise in their supply chain.”
By using Trade Lane Analyzer, companies can incorporate into their sourcing decisions the potential impact of import and export controls, if any country of origin rules may apply, what documents are required, along with incorporating trade compliance data such as available trade preference and/or duty suspension programs.
Separately, the system marries EDI status updates from carriers and brokers, with AIS data and milestone models to provide details on where shipments are and predictive ETAs. Users are alerted to delays. Future enhancements include machine learning capabilities that could one day provide even more accurate predictive ETAs. As the new offering gathers steam, the two firms will leverage the strengths of the other to provide a comprehensive, turnkey package. For example, and while Integration Point is not involved in the physical movement of freight, only the gathering and sharing of regulatory information necessary to efficiently moves freight across international borders, GT Nexus services include transportation sourcing, booking/tendering, rating, planning and optimization, track and trace and customs clearance. There are more than 13,000 carriers connected to their Network, and the firm claims that more than 95 percent of global ocean capacity runs through its platform.
Ultimately, both firms are pushing those traditional boundaries of how trade compliance has been viewed and how it’s used today. Shoemaker explains the concept, saying, “Instead of simply avoiding fines with trade compliance, we look for new and creative ways that trade compliance can be leveraged to improve operational efficiencies and cash flow.”
Shared Vision, Integrated Offering and Common Customers
According to GT Nexus and Integration Point, the new partnership finalized a contract with a new client shortly after announcing the offering and expects several more to close by year’s end. Targeting both new and existing clients, the two firms already share more than 30 customers that can instantly benefit from an integrated offering.
Weaving Integration Point’s trade content and compliance data into transactions created on the GT Nexus platform, and then performing compliance checks automatically, the solution streamlines processes and helps ensure that transactions are complete and compliant to reduce delays and costs. As they move forward the partner firms are already starting up customer influence groups to help drive the future roadmap of the combined offering. To that end, Shoemaker says simply, “Customs regimes around the world are enforcing regulations more than ever. Considering all that, it’s an unnecessary roll of the dice to take your trade compliance lightly.”
At a glance … top 10 advantages of the GT Nexus / Integration Point offering
- Comprehensive: Cloud-based superior global trade management at lower cost of ownership.
- Single Solution: Managing global trade process through the network partners (suppliers, logistics and brokers).
- Global Team: Localized knowledge enables companies to stay ahead of changing supply chain regulations.
- Cost Savings: Comprehensive set of duty optimization solutions including FTZ, FTA and First Sale Automation.
- Reduced Lead Times: Streamlined trade management through automated document creation and compliance checking.
- Reduce Delays: Eliminate noncompliance
- Reduce Risk: Proactive denied party screening of all parties and locations on every transaction.
- Reduced Brokerage Fees: Automated item classification, import and export document creation, direct filing capabilities.
- Rules and Regs Visibility: In advance of shipments, ensure compliance and identify opportunities such as FTAs.
- Supply Chain Visibility: Tracking goods and costs throughout transaction lifecycle from order to delivery with alerts to delays.