Managing Global Trade Flows

Countries and localities also have different licensing requirements and charge different duties. For example, customs duties may nearly double the cost of music compact disc (CD) for buyers in countries like Brazil, while a bottle of nutritional supplement pills can increase 25 percent on shipments to countries like Germany. This with value-added taxes (VAT), and other fees, can altogether amount to a major content management challenge. Different custom offices even in the same country sometimes classify products in different ways, which means multiple tariff rates could be applied to a single product, depending on where it enters the country.

Beyond these regulations, there might be many other financial and logistical considerations, since GTM has complex, processes for financing, risk management, and financial settlement, prompting financial institutions and software vendors to continue ironing out the applications and services e-businesses require for automating international payments. Suppliers will want integration with their order management systems, whereas retailers will want integration with their sourcing and procurement systems. Alternatively, many of these functions may be embedded in a broader GTM/ITL solution.

Although global trade requires the multimodal shipping of goods across borders, many international shippers that want to automate their global supply chains do not yet have e-logistics software that provides the necessary visibility and flexibility needed to conduct e-businesses. They also do not have e-procurement software that can analyze the total landed cost, such as the costs of sourcing and shipping a product internationally, including customs management, tariffs, transportation, cost of goods, etc. However, there have been a number of Internet-based logistics tools that are helping companies analyze and reduce costs by automating the processes of booking shipments, keeping customers informed, and making sure goods arrive on time (for more information, see Understanding the True Cost of Sourcing).

Savvy customers have been increasingly asking for help in researching costs for importing from different countries. By using software to check duties, taxes, and trade regulations in the potential countries of origin, GTM experts should be able to create "what if" scenarios that will help importers make the right decision.