Reuters + KPMG International Trade Survey
Thomson Reuters and KPMG International conducted a survey to uncover patterns in the perceived strengths and weaknesses of organizations’ trade programs. The survey elicited responses from 446 global trade professionals from companies in 11 different countries across Asia, Latin America and the United States. The study was designed to investigate several crucial aspects of global trade operations: trade operations activity, global trade management systems, foreign trade agreements, tariff classifications, system integration, centralization and transfer pricing. According to Taneli Ruda, SVP of Thomson Reuters, “Results from this global survey indicate that many companies have not scratched the surface in terms of utilizing integrated technology to better manage their global supply chain risks and tighten then global supply chain structures.”
The survey uncovered three primary conclusions surrounding companies’ involvement and difficulties with international trade. First, manual processes monopolize time. These processes drain time, create risks, and could be easily automated to produce greater efficiency. This feeds into the second conclusion – global trade management technology offers an untapped upside for companies. GTM technology allows a company’s personnel to spend less time on mundane organizational processes and more time on tasks that require greater intellect and strategy. Finally, many companies significantly underutilize Foreign Trade Agreements.
According to survey results, 70% of companies are likely paying more than necessary for tariffs and duties. Furthermore, 25% of companies do not utilize FTAs at all, and 36% only use 1-2. The survey identified the biggest roadblocks that companies cited in their attempts to use FTAs. The first challenge comes from difficulties identifying opportunities to qualify goods under FTA-specific rules of origin. The second challenge is related to documentation; according to the survey, companies found that the trade-related activities that create the greatest risk of penalties or increased operational costs are import classification, documentation and licensing. “With more FTAs coming on stream every year, not using FTAs is going to mean a major competitive disadvantage. We have seen with our customers that solid processes and automation are keys to effortless and confident FTA adoption,” says Hoon Sung, Head of FTA, Thomson Reuters.