How to reduce international trade risks

UPS

Going global presents significant opportunities, but it also brings about many challenges. In today's increasingly complex global environment, businesses in all industries must be prepared for everything from counterfeiting and theft to the impact of widely differing country regulations. To help ensure that end customers are not affected by these complexities, here are some actions that companies can take to secure their supply chain and make cross-border business a safer bet.

Collaborate

Don't go it alone. Instead, consider teaming up with domestically based services, such as a third-party logistics provider. You'll get the benefit of global reach without having to arrange matters remotely - and in a different language. Following in-country quality and regulatory requirements is one of the first lines of defense against supply chain disruption when operating globally. Collaborating with knowledgeable international distributors, logistics, and transportation providers will make sure your products reach your customers.

Find the right partners

Collaboration is great, but it's important that you're working with a partner that has the experience you need.

"Many smaller companies don't have the employees and the bandwidth to conduct due diligence on potential partners they're considering engaging," says Mark Quinlan, director of healthcare strategy at UPS. Jumping in too early with the wrong partners can be a crucial misstep.

When choosing a logistics provider, make sure they have strength in quality assurance and regulatory assistance (QA/RA). In addition, work with a provider that operates a global platform so that you can be sure its QA/RA team will understand the supply-chain complexities in each of your target markets. The ideal fit, Quinlan notes, would be having a resource in your home country that understands local requirements globally.

Sometimes, larger companies make the mistake of selecting partners on a procurement basis alone, with cost being the primary deciding factor. This can eventually lead to many different logistics players involved in individual markets - increasing complexity, adding more to your plate, and creating additional risk.

Companies should also use a carrier that has GPS capability to ensure that shipments are hitting specific checkpoints and arriving on time and intact. Some providers can supply monitoring and intervention services that can alert manufacturers to problems in transit, and can even take predetermined corrective action.

Enact safety measures

When it comes to cargo theft, criminals are getting more sophisticated. Supply-chain executives must stay one step ahead, frequently reevaluating current security protocols and implementing of stronger measures where necessary to protect goods in.

It makes sense to choose a logistics partner that thoroughly investigates small breaches and inventory "shrinkage," since what seems to be insignificant loss may in fact reveal gaps in security. If there's documented product loss, it's important to make sure your provider conducts an investigation.

In addition, Quinlan suggests not moving high-value freight on holidays. Transporting product during this time often means it will sit idle in a distribution yard or hand-off point, such as a border crossing where it is more likely to fall prey to theft.

In the end, moving into international markets could mean a tremendous uptick in business. But starting up global trade without doing due diligence can result in greater risk and possible loss. International waters can be tough to navigate, but collaborating with the right partners and being especially thorough can help ensure smooth journeys and safe arrivals.

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