By Douglas Zuvich
KPMG addresses how outsourcing key activities can help elevate the global trade function.
Outsourcing has been part of the global trade landscape for decades, but recent times have many companies giving this strategy a fresh look.
As geopolitical tensions, tariff wars and protectionist policies spread across the world map, many global trade functions struggle to keep up with the increasingly complex operational tasks required to keep international supply chains flowing. As soaring tariff costs catch the eyes of company leaders, trade executives mired in the daily grind increasingly find themselves stressed and pressed to meet leadership requests for impact analyses and fresh ideas to curb costs and add value to the organization.
Further, managing operational trade tasks requires a significant global staffing and technology infrastructure. Feeding this infrastructure demands constant attention and significant resources to ensure up-to-the-minute responsiveness to regulatory, personnel and process changes.
Where does today’s trade executive find the time to meet all these demands?
For many organizations, outsourcing can provide an answer.
Outsourcing aspects of the high-touch transactional work that characterizes much of modern trade operations can redirect the focus of global trade executives to the big-picture where they can add greater value to the organization. This approach also offers opportunity for a more satisfying environment for in-house trends and customs teams more broadly, offering work that delivers more challenge, more variety and more intellectual reward, as well as more opportunities to be recognized as valued strategic partners across the business.
In fact, there is a growing trend across industries to separate trade operations from trade governance—to separate daily management of activity from oversight and strategy—in terms of both personnel and mandate. When done right, this not only fosters a checks-and-balance environment within the trade compliance function. It also offers a new avenue for global trade executives to move noise out of the system so they can devote more time and energy to areas that create value for the company.
Outsourcing elements of the trade operations function to a qualified and trusted provider, while retaining oversight and decision making within the company, is an evolution of this trend, and can offer dynamic results in several core compliance areas.
Which trade tasks are ripe for outsourcing?
Much of the day-to-day work of trade functions is exactly the sort of high-volume, labor or technology-intensive, non-strategic task that lends itself well to an outsourced service environment. For example:
- Tariff classification: Everything that’s imported and exported all over the world needs to be correctly classified under a tariff code. Different guidelines apply for each product, so many trade teams spend significant time, and resources, figuring out the right classification for each part number and SKU crossing a border, often multiple times as classifications are unique for each country.
About the author: Douglas Zuvich is Partner, Trade & Customs, with KPMG US.
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