4 Common SMB Challenges in Managing International Trade
International trade represents a significant opportunity for small and medium-sized businesses (SMBs), connecting them to a wider customer base and new markets. Yet, navigating through customs and border regulations can be a challenging process for SMBs, due to the intricacy and complexities of the various factors involved.
Effectively managing these challenges is crucial to avoid delays, penalties, and disruptions in your supply chain.
In this article, we’ll explain four common challenges SMBs face in managing international trade and explore potential solutions.
1. Understanding diverse customs and border regulations
Operating in the global market entails grappling with customs and border regulations, which can easily get confusing for SMBs, due to the rapidly changing nature of the laws surrounding them and the documentation required. To keep up, SMBs must consistently monitor the process, which requires sifting through numerous online sources – a time-consuming task SMBs often don’t have the manpower for.
However, keeping up-to-date with regulations is pivotal for any business in the international trade arena. Even the slightest oversight can lead to fines, shipment delays, or legal complications, which can damage a business’s supply chain and more importantly, their customers’ satisfaction.
Inoreader, a content aggregation platform, can help in simplifying the process of staying updated with industry changes. Using its platform, businesses can monitor websites, newsletters, social feeds, and podcasts related to customs and border regulations, without the need to check multiple sources.
Inoreader also monitors keywords across multiple languages, helping businesses keep tabs on related topics such as regulatory changes, trade agreements, or compliance deadlines, and automates news feeds to personalized content for SMBs.
By streamlining the monitoring of customs and border regulations, SMBs can stay better informed and compliant and reduce their chances of encountering unwanted delays.
2. Documentation and compliance
In international trade, there is a large amount of documentation needed to comply with customs and border regulations. For SMBs, not executing the documentation process properly can cause roadblocks such as non-compliance penalties and delays.
The Export Documentation Manager from Descartes Visual Compliance provides a one-stop solution to streamline the export documentation process.
The software integrates compliance checks such as restricted party screening and product classification verification. By automating these processes, SMBs can reduce their chances of making costly mistakes, and have peace of mind regarding compliance matters.
The tool presents data in an easy-to-understand format, offers centralized control of export activities, and allows for the creation of multiple export documents in one step. Moreover, it includes features like AES and EEI filing assistance, which ensure businesses adhere to government regulations correctly.
The platform accumulates knowledge as you use it, creating a personalized, automated export system, saving time on future shipments. The user-friendly interface of Descartes’ platform, coupled with its adaptive learning capabilities, makes it a valuable asset for SMBs aiming to manage their documentation and compliance efficiently.
3. Logistics and supply chain management
Logistics and supply chain management in international trade is an intricate labyrinth for SMBs. Ensuring the secure, affordable, and timely delivery of goods is paramount.
In a recent survey conducted by UPS, 92% of SMBs revealed that they have incurred losses due to logistics and supply chain issues from lost, stolen, or damaged shipments. This can be detrimental for retailers, as 61% of shoppers in the survey stated that they will stop ordering from a particular business after two or three delivery issues.
To maintain smooth logistics and supply chain management in the international arena, SMBs must work with reliable partners that can ensure the safe delivery of their goods. International trade involves many different stages, such as setting up land and overseas deliveries and coordinating customs clearance. It also involves working with several logistics partners along the way, which can be daunting to organize for an SMB.
SMBs can leverage a freight forwarder to take care of the logistics matchmaking. Freight forwarders today are increasingly offering more options to help SMBs navigate international trade. Ship4wd, a new digital freight forwarder powered by the global shipping giant ZIM, gives SMB owners a dashboard where they can obtain competitive quotes and book the entire shipping process directly through the platform, while being able to track their shipments in real time. It also offers payment deferral for up to 90 days and financial credit lines, which can ease cash flow crunches, a common problem for SMBs.
Ship4wd understands the struggles of SMBs, which is the reason behind the development of its platform, and therefore provides 24/7 customer support and dedicated account managers for each business, to ensure transparency and resolve any issues on their behalf throughout the shipping process.
By using a freight forwarder, SMBs can more effectively navigate the complexities of logistics and supply chain management, helping ensure reliable and timely global shipping.
4. Insuring your shipments
Preparing for the worst-case scenario is highly important in international trade, as theft, loss, or damage can severely harm a business’s supply chain. Shipping insurance is therefore a critical component for financial stability, and in some cases, could be a regulatory necessity.
SMBs can easily struggle with securing comprehensive coverage due to cost considerations, lack of information, or administrative complexity. InsureShield, offered through UPS Capital Insurance Agency, provides a solution for businesses to insure their shipments, including high-value, fragile, and time-sensitive goods, whether transported via ground, air, or ocean.
The package offers flexible options such as single shipment coverage, making insurance acquisition quick, easy, and affordable for SMBs.
Having a strong insurance plan not only mitigates financial risk, but also keeps brand reputation intact, keeping customer loyalty.
There are many challenges for SMBs when it comes to managing international trade, considering the many rules, logistics complexities, documentation requirements, and risk factors involved in the process.
By addressing the above mentioned issues, SMBs will be better equipped to navigate the complex world of international trade, allowing them to focus more on growth and customer satisfaction.