In today’s globalized, digitized world, even the smallest business can “go global” overnight. E-commerce marketplaces and other digital marketing, sales and payment platforms have reduced small businesses’ price of entry into the international trade arena. Now, even the often complex and expensive challenge of shipping goods around the world is catching up with those global e-commerce trends as innovations in supply chain management take hold.
Until recently, much of the supply chain for imports and exports has been stuck in a last-century mode of paper trails, faxes, long waits and questions left unanswered by the companies shipping your goods. Doing business overseas was often an act of faith, usually involving an old-school freight forwarder who coordinated arrangements with the dozen or so organizations involved in a typical international shipment. You knew little about your goods’ progress until they showed up—a blind spot that fouled up everything from your procurement, inventory and cash flow to customer relations.
Enter the digital freight revolution, which is speeding up international handling of bulk product shipments while letting you know, in real time, where your imports and exports are in the world. At the same time, shipments of small parcels have increased internationally, though of course geography would prevent them from ever achieving the next-day, same-day and even within-the-hour timetables that have become the norm for local delivery. To close the gap, though, warehouse operators are offering more options closer to markets served.
Supply Chain Management Trends Pave the Way for Small Businesses to Trade
Today, you can arrange an international shipment in new digital marketplaces, getting instant price quotes and online booking. There are also digital marketplaces for warehousing your products on the far side of the world.
Once your product has shipped, you can sit in front of an online dashboard, watching a tiny ship trace its way across the ocean with your products on board. And this is just the digital tip of the iceberg. Data and trade documents are collected and shared online among importers, exporters, truckers, ocean carriers, cargo planes and freight forwarders. Updates and alerts allow flexibility in rerouting goods at key points in transit, in the event of natural disasters or even a change in go-to-market plans. All of this enables sharper business planning and better management of customer expectations.
It’s still not a perfect world, to be sure, as basic costs such as import and export tariffs keep changing. But you can even track that online, from the backroom of your real-world shopfront or the back office of your factory.
And what about those horror stories of products stuck in customs? While this is an ongoing problem, initiatives to solve it include the World Customs Organization’s declaration that 2019 is the year of “smart borders,” with customs agencies worldwide reengineering their cumbersome processing of imports and exports.
Digitizing Financing and Payments in the Supply Chain
Digitization is also easing age-old concerns about payments in a market where products take longer to reach their destination. Among the alternatives are “open account” relationships in global supply chains, in which goods are delivered before payment is due. Here, some large corporations are directly investing in their own technology platforms to provide financing to their suppliers who are on open account.
Today, you can arrange an international shipment in new digital marketplaces, getting instant price quotes and online booking.
In another option, suppliers sell their accounts receivables to financiers, which can lengthen buyers’ payment terms even while suppliers get paid more quickly. Business charge or credit cards can provide similar advantages in timing, since you, as the exporter, are paid almost immediately while your customer, the importer, may not be billed until next month.
These two methods are also being digitized, including fintech supply chain finance options, on the one hand, and virtual cards, on the other. And on the horizon are distributed ledger (blockchain) versions of supply chain finance, which are under development by groups of fintechs, banks, freight forwarding companies and other key players in international trade.
Nobody ever said that international trade was the easiest way to do business. But the digitization of supply chain management and finance is putting a vast global market within closer reach of more small U.S. businesses than ever.
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