Supply Chain Managers May Face New Challenges in Foreign Markets

More than 80 per cent of small- to mid-size shippers are concerned about customs delays affecting their ability to properly manage their business – yet nearly a third say they tend to ignore the myriad of changes to government regulations and hope for the best when transporting their goods across international borders.

This surprising disconnect is one of the findings in a new national poll released today by North American customs Broker, Livingston International. The Survey, conducted last month among 500 professionals in the import-export sector in small-and medium-sized businesses in the United States, found that despite optimism about their company’s growth, many are concerned about their organization’s lack of knowledge about clearing products for international trade, which could have serious repercussions, such as penalty fees or a bad customer experience.

Martha Lessman Katz, member of the law firm of Gordon, Feinblatt, Rothman, Hoffberger & Hollander LLC, and a columnist for Supply Chain Management Review, noted that the National Export Initiative contains hidden “complexity.”

The research, conducted by Ipsos Public Affairs, also found that one in seven respondents feel uncomfortable targeting new international markets.

“While the majority expect business growth over the next 12 to 24 months, this survey demonstrates that they are more comfortable trading on their own turf,” said Roy Coburn, president of Livingston International’s U.S. division. “These businesses are missing out on significant global opportunities because they don’t feel equipped to explore international markets.”

Spokesmen said these professionals understand what’s at stake: when clearing goods between countries, customs holds or fines can mean the difference between realizing a profit – or not. Nearly 70 per cent are concerned about penalty fees related to incorrect classification of products. Almost three-fourths are concerned that unforeseen additional costs of clearing international borders would result in a negative customer experience.

According to Coburn, a reason for the concern may be because exporters depend on their courier to clear Customs – in fact, 75 per cent of those surveyed rely on these shippers to cross international borders.

“While moving the span of control to vendors and suppliers may allow companies to avoid the complexity of clearing their goods through Customs, it can have a negative impact on their speed to market, their reputation and their operational efficiencies if their goods are incorrectly classified and delays or penalties occur,” said Coburn. “By maintaining control of their products as they move through borders, businesses ensure they can monitor their client experience and their operational efficiencies.”

Additional findings from the new survey include:
•    32 per cent say that their total value of imports in a typical year is between $1 million and $10 million. Twenty-three per cent report a value between $10 million and $100 million.
•    54 per cent would foresee a financial impact of at least 10 per cent of the value of the shipment if their goods were significantly delayed at the border. More than 1 in 5 would foresee an impact of at least 20 per cent.
•    46 per cent report their company does not have an up-to-date international trade compliance manual.