2020 will be remembered as the year that our businesses and economy faced numerous challenges.
Surveys in previous years showed that until this year, bureaucracy and the fear of being found out were two of the major business concerns. Simple things compared to now, when companies have to deal with self and country isolation on one hand, and a beckoning Brexit the other, adding significant and onerous layers of complexity. We already suspect there will be winners and losers from both companies trading overseas or, those trading purely domestically. Those that take time to consolidate and be creative will stand a better chance of being one of those ‘winners’.
As we start to move forward from the Covid 19 crisis towards our status as an independent sovereign state, it appears that the business environment is, and will, change. Businesses involved in international trade will have to continue to be agile but equally, they need to understand the new ‘normal’ and be aware of the evolution of Global Trade. So how can you be best be prepared for 2021?
Here are some of the issues you may wish to consider:
Supply chain disruption is set to continue and we already see the shoots of recognition in that companies are looking to source supplies in different countries, some even choosing to find a British supplier. That is good news, it is always good to spread the risk. Working together with everyone in the supply chain to make it as waste free, as efficient and reliable as it can be is down to relationships and development of lean principles.
Authorisations are a good way to gain a competitive advantage. Many companies are looking at AEO as an indicator of a trusted trader, and at AE to allow for preference statements. Worth looking at for many reasons including improved processes and reductions in customs deferment accounts.
Taking time to audit your procedures during the next few months will allow companies to assess their skills levels and their compliance – both useful if you intend to go for one of the authorisations above. Additionally, many of the courses provided by the Chamber network currently are fully funded.
Outsourcing your international trade functions could prove cost effective. Costed at a monthly day rate for however many days you need, you can take advantage of someone to check that your documents are right first time, to train your staff or even help you to recruit.
Many companies may be considering international trade for the very first time. Accessing the right new markets with a strategic and operational plan to maximise the opportunity is key. Staged and smart plans will ensure checks and balances for budgets, timelines, roles, responsibilities and expectations.
Understanding non- tariff barriers for new markets is equally important to recognising the opportunity. Barriers come in two forms, the harder recognised barriers of quotas and sanctions as opposed to those that may result in longer transaction times and unhelpful customs clearance.
At the start of 2020 the new edition of Incoterms came into effect. Understanding the differences and options covered in the 11 different terms will allow you to price quotations correctly. Understanding the risks and the obligations of parties to an international contract of sale will avoid costly mistakes and assumptions.
Now is the time to check you are prepared for 2021. It makes a sense to ‘dust and polish’ your policies and processes, in fact to plan for success. Whatever that looks like we need to be ready for our place in our Global Britain.
By Linda Middleton-Jones, Managing Director, International Marketing Strategy Specialist, Export Coach & Mentor
To speak to Linda and the team, contact International Trade Matters today: