It's best known as a tool for automating regulatory compliance and documentation. But global trade management software can also help you reduce your exposure to all sorts of supply chain risks.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
International trade has never been easy. Importers and exporters have long confronted challenges created by differing national regulations, languages, and business cultures; long journeys by air, sea, and land; and mountains of documents needed to satisfy government requirements at both origin and destination.
To simplify matters, many companies have turned to global trade management (GTM) software. This software may be best known as a tool for automating time-consuming, error-prone tasks like document creation and denied-party screening. But that's just the tip of the trade management iceberg, so to speak. The software also can help users mitigate or avoid all sorts of supply chain risks. (For more on GTM software's capabilities, see July 2007.)
Here are just three of the risks the technology can help importers and exporters avoid:
Lawsuits, fines, jail time, and damaged reputations. That may sound extreme, but these are very real consequences of failure to comply with customs and security regulations both here and abroad. Fines can run into the millions of dollars; in some cases, individuals can be held legally liable for violations. Government agencies, moreover, are only too happy to publicize the names of companies that have violated regulations.
To keep their customers up to date on changing requirements, GTM software providers have trade experts on staff in the United States and around the world who monitor local laws and regulations. One of these experts is Celeste Catano, principal business analyst at software developer Kewill. A licensed customs broker, Catano is a committee chair for U.S. Customs and Border Protection's Trade Support Network and a trade ambassador, which puts her in the top ranks of CBP's industry advisers. "I'm in Washington at least one week each month, working at CBP headquarters," she says. Her group also monitors other potential sources of trade regulations, including the FDA and Congress.
As new requirements take effect, the vendors update the software accordingly. Because most GTM products are delivered over the Internet, updates are automatically available to users.
Supply disruptions caused by delays. Shipment delays aren't just inconvenient; they can be costly as well. A holdup in customs, for instance, can lead to product spoilage and cut into profits, says Melissa Irmen, vice president of products and strategies for Integration Point, a GTM software provider. GTM software can help companies avoid holdups associated with regulatory compliance. For example, as part of an automation project, testing equipment manufacturer Teradyne began using Kewill's GTM software to screen its exports against denied-party lists. Now that it's using the software, compliance-related delays are a thing of the past, says Brian Amero, Teradyne's global compliance and regulatory affairs manager.
"Prior to implementing the system, we were screening orders manually with very limited resources," says Amero. "We would attempt to review orders as close to booking as possible, but we might not get a chance to look at them until they were ready to go out." If a problem cropped up, the shipment would be placed on hold, sometimes at the last minute.
Now orders are electronically reviewed as soon as they're booked. If the system detects a potential problem, it alerts Amero's compliance staff and the appropriate sales administrator. The compliance team is prompted to screen the order again if there are any significant changes to the order. And because denied-party lists change frequently, Teradyne checks one last time before it releases the order for shipping.
Since Web-based GTM systems allow users to exchange information with supply chain partners, they can help assure regulatory compliance almost anywhere in the world. That's why Teradyne uses its GTM software to manage orders shipped from a plant in China. "Most of our products fall under U.S. jurisdiction, even those we ship from China. But asking someone in China to understand U.S. export laws is not realistic," says Amero. "Kewill's [export compliance module] allows us to screen all of those orders."
Software can also alert users when things don't go according to plan, so they can take corrective measures, says Bryn Heimbeck, CEO of Trade Tech, a company that provides Web-based trade management solutions. Suppose an exporter's trucker misses a pickup—an event that could set off a series of missed ship, rail, and truck connections. If notified of the problem promptly, the importer can make other arrangements to get the container on its way and avoid delays, he explains.
Some GTM packages can even help users evaluate the level of risk posed by delays and other problems. One such product is SAP's BusinessObjects Global Trade Services software, which now incorporates SAP's Risk Management application. The combined portfolio identifies "key risk indicators" (KRIs) and ties them to key performance indicators for a commodity or product. It then quantifies the financial consequences of those risks, explains Kevin McCollum, head of solution management for SAP's Global Trade Services Business Unit. For example, if a user has determined it will be unable to fill orders for a critical component if customs dwell time reaches two days, the software will begin sending alerts to the appropriate people as the delay approaches a day or a day and a half, McCollum says. "The system knows that if you shut down that production line, it will cost X dollars in unfilled customer orders. It lets you decide where to focus your risk adjustment efforts."
Gaps and inconsistencies in execution.In an international transaction, the failure of a single participant to perform as promised has consequences both upstream and down. That's why Integration Point and others integrate disparate partners' systems and processes. "It's important to streamline and ensure accountability of all the involved parties while ensuring the compliance, credentialing, and confirmation of all transactions," Irmen says.
GTM software can also help to ensure that each link in the supply chain does its part. A system that tracks whether a task has been completed, who completed it, what should happen next, and who's
responsible keeps the international trade ball rolling, Heimbeck says.
One risk-related task that's often overlooked is the purchase of cargo insurance, which many people buy on a per-shipment basis. But doing that increases the chances that the shipper will get the coverage wrong or even forget to insure altogether, Heimbeck warns. Trade Tech's system addresses that problem by automatically sending shipment details to its insurance partner, Chubb Commercial Insurance, which then creates an insurance certificate. What's more, shippers that use GTM software—and can therefore document their shipments' chain of custody—may qualify for lower insurance rates.
Think globally, execute locally
In all of these examples, a single theme emerges: GTM software offers an effective means of minimizing supply chain risk because it permits centralized control of business processes that typically are decentralized.
The benefits of centralized control at an enterprise level are clear. "My mantra is 'think globally, execute locally,'" says SAP's McCollum. Operational details should not be managed globally, but managers should think about them that way, he adds. "You want a global strategy for trade compliance."
Not only does GTM software help companies maintain better control over their transactions, it also monitors the execution of those tasks and sends reports back through the supply chain for evaluation from the perspective of corporate strategy, McCollum adds. "How do you know you're executing against that strategy unless you cascade information down and get feedback at the local level? That's where the power of GTM comes in."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.