“…companies that export make 121% more money, grow faster, last longer, are better connected within supply chains, are more resilient to economic downturns, and are more productive, competitive and innovative.” 

It’s no wonder then, that the majority of Fortune 500 entities operate locations in foreign countries, according to research by CapRelo.  

Coming from a broader perspective, there is no bigger pool of consumers than the global one. Take the USA, for instance.

“More than 95 percent of the world’s consumers are outside of the United States,” notes the US ITA (International Trade Administration). “Your competitors are increasing their global market share, and you can too.” 

The story is the same for businesses in all countries around the world too. Whether you’re looking to expand operations or simply want to export your products and services to an international locale, the world is a big oyster for you and your business to take advantage of.  

So, the bigger question on your mind should not be why should I be expanding my business to global markets? But, instead, how do I expand my business into global markets safely and successfully? 

The answers are out there, and they require diligent decision-making processes and strategies that have been tried and tested by the most successful companies around. There is no secret recipe to it all, you just have to do the right research, have the right partners, the right training and the right team. Keeping in mind that female-run businesses often face more hurdles when building their companies, it’s especially important to think about expansion with this type of due diligence in mind.  

With that said, here are 5 important steps that female leaders can take to take their businesses beyond domestic boundaries.

Create a Highly Trained International Business Team 

In business, people do not encourage ‘going it alone.’ Yes, there are stories of renegade disruptors straying from the pack and doing their own thing to much-lauded success, but the reality behind many of these solopreneurs and their companies is that they had excellent mentors, staff members and partners who helped them become the success stories that they are today.  

So, when it comes to business expansion, you need a team that understands how to:

• Research target markets effectively 
• Manage international finance and FX intricacies 
• Navigate the complex landscape of international shipping, logistics and transportation 
• Engage in appropriate cross-cultural marketing and sales 
• Adapt products and services to the many regulations in international markets 

This type of team can be comprised of many positions, depending on your company’s size, operational model and needs. Many international business consultants offer-up global trade experience for doing business in international regions, as do import-export consultants, trade compliance specialists, and procurement and purchasing experts—on a more granular level.  

Depending on the size and breadth of your team already, you may want to hire a specialist in a niche area, such as logistics, or you may need someone who can do it all, from researching the right global markets to executing the expansion strategy on a daily basis—like a seasoned international business consultant, developer or manager. 

Regardless of the position, what is exceptionally important for the success of your team is the amount of professional experience and training they have.

For example, many companies that are focused on international trade often look for the Certified International Trade Professional designation (CITP®|FIBP®*) when sourcing top talent.

That’s because CITPs have the knowledge and skills needed to provide services in all of the areas noted above (and more). This type of designation can be extremely beneficial as it provides your clients with added confidence that your team members understand the complexities involved in global expansion and, more importantly, know how to avoid common mistakes that untrained and inexperienced individuals so often make. Just as you need to do your due diligence for your business, your teams also need to be properly equipped to do the same in their areas of expertise. 

Execute a Thorough Feasibility Assessment 

If you are going to expand your business into new markets the right way, then you need to do the right type of research to see if the potential opportunities are viable for your business—both its current and future state. That means you need to:

• Assess your organizational readiness to take on international trade initiatives 
• Understand the best import or export opportunities for your business using the right types of data (such as macroeconomic data) 
• Perform cost-benefit analyses for all of your expansion activities  
• Understand how to mitigate the wealth of risks that can occur day by day in an ever-changing global economy 

These aren’t small tasks by any means, but that’s why adding the right professionals to your business is of utmost importance. They know how to do it all, so you don’t have to. 

Find the Right Partners 

When entering a new international market, partners can help establish effective marketing and distribution systems, region-specific market and consumer knowledge, and important government or regulatory connections that are necessary for successful expansion. However, there are many, many instances where not doing the right research and understanding your liabilities or partner’s liabilities can create disastrous situations for both parties. So, it’s important to understand what type of partnership you need first (distributor, agent, business association, business associate etc.), and then how to ensure you negotiate an agreement that will not only benefit your business but protect it during unexpected scenarios too.  

Establish Strong Female Support Networks  

Female leaders need other female leaders to thrive in today’s business environment. The WPO is just one of many organizations that understands the importance of this notion, creating a network of peer-to-peer support for women who seek advice, experience and resources from women who have succeeded at doing business or, in this specific case, international business. Not only do female support networks offer mentors, conferences, expert advice and opportunities that otherwise would be difficult for female-run businesses to attain on their own, but they also lift up female leadership and diversity initiatives on the whole—continuing an essential growth cycle for the women-led businesses of today and tomorrow. 

Dig for Initiatives, Resources and Funding Opportunities for Women  

At first glance, it can be daunting for women to find resources, financial assistance and business guidance when growing and expanding their businesses. But now, more than ever, the world is ripe with opportunities for women to take advantage of, especially in the form of diversity initiatives. For example, many government sectors in Canada, the US and Europe actively seek female-run companies for events, start-up and incubator programs, and supplier diversity programs.

Many large companies do too; in fact, 97% of Fortune 500 companies have supplier diversity programs, according to EDC.

It may take a bit of digging for the right help, but the investment in time is more than worth it. Better yet, if you have already established the right team and networks, you may not even have to look for these opportunities. People will bring them right to you. 

Going global shouldn’t be daunting. On the contrary, it is exciting and ripe with opportunities for large-scale success—especially if you have the right teams, partners, networks and resources at hand. Luckily, for those who are members of the WPO network, you’re already part of the way there. 

* Certified International Trade Professional (CITP) is trademarked for use within Canada. FITT International Business Professional (FIBP) is trademarked for use internationally. Both reflect the same FITT certified designation. 

The post How to Take Your Business Global – 5 Important Steps for Female Leaders appeared first on Trade Ready.

An international business plan acts as a framework that identifies goals and objectives, specific target markets and clients, resources required and strategies to be developed in pursuit of international business opportunities. The plan allows for the monitoring of progress via metrics against which success and failure can be measured. A comprehensive international business plan will be comprised of a number of integrated strategies related to business functions, including communications, sales and marketing, finance and production.

What Is an International Business Plan?

An international business plan is a valuable management tool that describes who a business is, what it plans to achieve and how it plans to overcome risks and provide anticipated returns. It can be used for a wide variety of purposes, such as to:

• Set goals and objectives for the organization’s performance.
• Provide a basis for evaluating and controlling the organization’s performance.
• Communicate an organization’s message to managers and staff, outside directors, suppliers, lenders and potential investors.
• Help the planner identify the cash needs of the business.
• Provide benchmarks against which to compare the progress and performance of the business over time.

A comprehensive and detailed plan forces the planner to look at an organization’s operations and re-evaluate the assumptions on which the business was founded. In doing so, strengths and weaknesses can be identified.

Although highly dependent on the individual business case, on average it takes a three-year commitment to establish a successful presence in a foreign market. This process may require tremendous human, technical and financial resources during the developmental period.

Want to learn more about conducting proper research, selecting the most effective entry strategy and implementing it efficiently? Check out the FITTskills International Market Entries Strategy online course!

The Planning Process

An international business plan is subject to repeated adjustment and revision to keep it current with the changing circumstances of the organization. The plan is a feedback mechanism through which new information is continually incorporated into the organization’s operations. Planning always precedes action. Therefore, planning must be thought of as a continuous cycle. The analytical tools presented here are not intended to be used just once. If they are to be useful, they should be used repeatedly as part of a process of improvement and incremental adjustment.

Plan Preparation Guidelines

These 7 guidelines will help in preparing a comprehensive international business plan:

1. Clearly define the objectives for producing the plan: Who is going to read the plan, and what will they need to do? These objectives can help you decide how much emphasis to put on various sections.
2. Allocate sufficient time and resources to thoroughly research the plan: A plan is only as good as the research that went into producing it.
3. Show drafts of the plan to others: It can be very useful to obtain feedback from others, both inside and outside the business.
4. Create an original plan that is done specifically for each business case: A common mistake entrepreneurs make is to borrow heavily from a sample plan and simply change the names and some of the numbers. There are two big problems with this approach. First, the emphasis placed on various sections of the plan must reflect what is important to the particular business in question. Second, a good plan should flow like a story, with the sections working together to demonstrate why the business will succeed. Plans that borrow too heavily from other plans tend to be disjointed, with some sections contradicting others and various key issues left unaddressed.
5. Outline the key points in each section before the writing starts: These points must then be reviewed to ensure the sections are consistent with each other, there is little duplication and all key issues have been addressed.
6. Ensure financial projections are believable: For many readers, the financial section is the most important part of the plan because it identifies the financing needs and shows the profit potential of the business. In addition, a good financial plan will give the reader confidence that the author really understands the business.
7. Consider writing the executive summary as the last step in the process: It is usually easier to provide a concise overview after the detailed content has been created.

If you’re having trouble getting started with your business plan, try writing like it’s a series of tweets—one for every section of your business plan. To get your point across, 140 characters is all you need.

Forcing yourself to boil each section of your business plan down to one main point is an exercise in decision making and strategy all in itself. When you’re done, you’ll have everything you need to take your next step, whether that’s practicing your pitch to potential investors or a business partner, or sitting down to expand each tweet into a full section of a more traditional business plan.

Core Content

The international business plan is the culmination of all of the work done to determine the appropriate venture for the organization’s growth. As part of the feasibility process, the organization will have determined its own internal readiness, conducted comprehensive target market research and carefully analyzed any relevant risks.

For more information on this topic, see the FITTskills Feasibility of International Trade online course.

At this point, the organization can take all of this information and analysis and formally document the plan for moving forward. There are many different models and examples of how to put together a formal business plan, rather than one correct way.

The right format will depend on the organization, the venture being pursued and who will be accessing the business plan and for what purpose. However, there are some basic guidelines to follow.

One of the reasons business plans are developed is to convince investors and/or bankers to invest in the venture.

Increasingly, they are looking for a business plan to include two sections: one relating to online strategy (in terms of e-marketing, social media and ROI) and the second relating to corporate social responsibility (including quality, health, safety and environment policies).

The inclusion of these topics gives more credibility to the company by demonstrating its commitment to the community and to employees’ well-being.

Telling a Story 

One trend in business planning is to use a narrative structure in the document, rather than traditional technical writing techniques. Storytelling techniques are increasingly being used throughout the business world to create personal and organizational brands, deliver marketing messages and develop persuasive plans.

Stories make presentations better. Stories make ideas stick. Stories help us persuade. Savvy leaders tell stories to inspire us, motivate us. That’s why so many politicians tell stories in their speeches. They realize that “what you say” is often moot compared to “how you say it.

Instead of using bulleted points and cold, technical language, organizations employ a “beginning, middle and end” narrative style. This engages the audience by establishing the context, describing the conflict or obstacles and arriving at a successful resolution.

The Executive Summary

Usually the last step of preparing the international business plan is to develop the executive summary, a short overview of what the plan proposes to accomplish. For some purposes, a one-page business plan can also be useful.

There is not a great deal of difference between an executive summary and a one-page business plan. The most significant distinction is the one-page plan must completely fit on one page in a readable font, while an executive summary may spread over two or three pages.

One-Page Business Plan

There is a trend towards the one-page business plan, especially if the plan is to be presented to potential partners for their consideration. Audiences for the one-page plan will be looking for a “quick hit”: a clear and concise description of what the opportunity is and how it is being pursued.

For example, a one-page business plan might include the following topics, as described in Noah Parson’s article “How to Write a One-Page Business Plan” on the website Bplans:

• Customer problem/opportunity
• Your solution/approach
• Business model (how you make money)
• Target market (who is the customer and how many are there)
• Competitive advantage
• Management team
• Financial summary
• Funding required

The one-page plan (or the executive summary, if used in place of the one-page plan) may provide the first impression the audience has of the business. This is the most important document generated out of the business planning process, and significant effort and care should be taken in its creation.

There are many websites the provide blank samples of one-page business plans, including Bplans, the GoForth Institute and Startup.com.

A Note on Strategic Plans

A strategic plan covers many of the same points as a business plan. However, a strategic plan sets out the detailed action plan to be followed to achieve the objectives of the international business plan.

It must outline specific activities, their due dates and who is responsible for each activity. It is a project plan with a critical path. A strategic plan ensures any venture is carried out in a coordinated, informed and systematic way.

A key consideration in action planning is how quickly to enter the market, which is driven by the chosen market entry strategy. If market entry is done too quickly, the potential for costly mistakes increases. However, if it is completed too slowly, opportunities may be missed and competitors will have more time to react.

The Planning Cycle

Attaching the word “cycle” to planning implies that it happens more than once. International business plans need to be reviewed periodically because new information that has an impact on both planning and operations is continually coming in.

All plans, including international business plans and strategic plans, need to be reviewed every time there is a major event impacting the business, such as civil unrest, a currency fluctuation or the presence of a new competitor.

The post A Guide to Preparing an International Business Plan appeared first on Trade Ready.

Those who embark on this journey the right way, do so by planning, getting the right training, and using the right strategies and approaches. They undertake a lot of work, but also experience the tremendous benefits from all their efforts—and that’s why we’re proud to celebrate them.

This week, we’re putting the business spotlight on Randall Strategy, owned by CITP Quentin Randall. Quentin got his start in international trade when he joined an Alberta-led international mission to Mexico City. There, he supported Alberta-based SMEs as they expanded into Latin America. Since then, his company, Randall Strategy, has dedicated itself to helping small businesses access capital and enter new markets.

Tell us a little bit about your company?

Randall Strategy is led by certified financial and trade professionals. We de-risk business ventures so SMEs can raise capital and enter new markets. We help these companies get the capital and contracts they need so they can focus on running their business.

What are some of your favourite stories about your business and career?

Every time I get to meet and work with a new small business client, I learn about their operations and help them grow; it is a very rewarding experience. Most of these companies are family-owned and operated, and helping them understand that they too can compete globally is very rewarding.

What are some of your proudest professional accomplishments, or most interesting business projects you’ve worked on?

In 2021, my company helped a Canadian logistics company secure a major investment which saved them tens of thousands of dollars and set them up to ship products internationally. I have also imported samples of hand-woven hammams and throws from Turkey, and miniature wooden baseball bats from China. This project is on hold due to COVID-19, but it is still very rewarding to be connected with overseas suppliers.

What one piece of advice have you learned during your career that you wish you had known when you started working in international trade?

I wish I would’ve connected to an experienced 3PL and customs broker in the beginning. It is a long, slow, complicated process to navigate all the regulations and freight considerations yourself, and these groups help move things along. Working with a 3PL is such a time-saver and they de-risk a venture so well. 3PLs and customs brokers are well worth the investment.

Your business, Randall Strategy, helps clients raise capital and enter new markets. As a CITP, how do you foresee your designation playing a role in your company’s future?

I want to use my CITP designation and the knowledge that comes with it to do two things:

1. Help more clients access capital and successfully enter new international markets

2. Import new, high-quality products into Canada.

For someone who owns their own business, what was your experience with the FITTskills courses like? 

These courses were awesome. It validated much of what I thought to be true and taught me a great deal more about risk management than I expected. They have also enhanced my ability to provide clients with investment attraction and exporting support so they can raise capital, reach new markets, and grow their business. Looking towards future opportunities for my business, knowledge from these courses will smooth out my importing activities as I better understand the framework that needs to be in place to conduct a transaction. 

Discover how to properly mitigate business risks so you can prevent financial loss and costly mistakes. Take the FITTskills online Risk Analysis and Management workshop.

Did you have a favourite FITTskills course and how did it apply to your business?

My favourite course was International Trade Finance because it helped me better understand how to mitigate currency risk, make payments and ultimately complete a transaction. In my mind, a mutually beneficial transaction is the core of trade and this course really brought home how to do that.

Discover how the FITTskills online International Trade Finance course teaches you everything you need to know about payment, risk mitigation, financing, and the flow of goods and services.

How do you see the CITP designation benefitting your business and why did you apply for it?

My business helps small businesses access capital and reach new markets. The CITP is a well-regarded international designation and CITPs are held to a standard of professionalism that I wanted applied to my practice. It helps secure my company’s reputation of professionalism. We are also seeking to grow by importing products into Canada, and CITP designation is immediately recognizable overseas, providing a certain level of trust and professionalism.

I am proud to have my CITP designation. It validates my experience and signals to clients that I will represent their best interest. It also enhances my ability to participate in the global trade market, which is very exciting.

The post CITP Small Business Spotlight: Randall Strategy Corp. appeared first on Trade Ready.

This factor distinguishes them from indirect investments in securities, bonds, funds, or currencies. Understanding these different investment options is critical to researching which ones best suit a given organization, target market, and/or venture.

Ownership-based investments

One type of foreign direct investment is based on establishing an ownership position over an asset or assets. The following are some of the most common types of ownership-based investments:

Greenfield

The investing organization establishes a completely new operation in a target market, building it from the ground up.

Brownfield

Similar to Greenfield, this is an aggressive market entry strategy. Brownfield investments are an acquisition of existing facilities in the target country. Often this strategy involves some site remediation, such as the clean-up of soil chemicals.

Acquisition

The investor purchases an existing operation in the target market.

Joint venture

The investor identifies a partner with complementary capabilities, and they set up an entirely new operation in the target market, each of them owning a stake proportional to the value of their original contribution. The original founding organizations continue operations as entities distinct from the newly formed joint venture.

Merger

The investor identifies an operation with complementary capabilities, and the two organizations abandon their original distinct identities to join forces into a single, combined new firm. Situational Analysis

Looking to determine if your new trade opportunities are viable? Check out the FITTskills Feasibility of International Trade online course!

Investments based on strategic alliances

This is a category of investment in which resources are contributed directly but do not create a distinct asset. Usually, such investments create partnerships in which the relationship is the only real asset. Investments based on strategic alliances are as follows:

Supplier alliances

Many organizations are investing in stable long-term relationships with suppliers of parts, technology, equipment, or other key inputs. Such investments require more than simply entering into a long-term supply contract. In many cases, they involve harmonization of standards, agreements on quality control, and integration of manufacturing and delivery processes. In technology-driven industries, supplier alliances can include agreements to share research and development (R and D).

Research consortium

There is a growing number of organizations in particular sectors pooling their R and D efforts to improve their ability to face related challenges. In some cases, such consortia focus on developing common standards that allow products to interconnect and interact. In others, they organize something akin to a division of labour by apportioning research tasks to the consortium members best able to carry them out. This can be significant internationally if organizations from different countries bring different kinds of expertise into a relationship.

Co-marketing alliance

Some organizations enter into an agreement to market each other’s products or services as part of their own set of offerings. They do this to fill out product lines and to provide consumers with a comprehensive offering. When the two organizations operate in different countries, this type of arrangement allows one to sell its products in the other country without setting up its own marketing organization. Such arrangements are not cost-free; partners must invest not only in making the relationship work but also in costs such as relabeling and rebranding.

Co-production alliance

Just as organizations exchange marketing services, they can also exchange production facilities. Rather than shipping finished products to a distant market, an organization can enter into an alliance with a local manufacturer to assemble components or manufacture a complete unit according to original specifications. Again, this can be a cost-effective way of entering a market, but it requires an investment in the relationship as well as in the transfer of knowledge, skills, and design.

Bidding consortium

Perhaps the loosest form of strategic alliance occurs when organizations enter into a consortium to bid on a project that none of them could carry out individually. Such consortia are very common in large international infrastructure projects. Even though the organizations retain their distinct identities, entering into a consortium does require some longer-term commitments, especially if the bid is successful and the winners are obliged to work together for several years. The simple fact of participating in a bid can require a significant investment of time, human resources, and money, especially if bid bonds are required.

The post The most common forms of foreign direct investment (FDI), including ownership-based investments and investments based on strategic alliances appeared first on Trade Ready.

One of the greatest values of mentors is the ability to see ahead what others cannot see and to help them navigate a course to their destination – John. C. Maxwell

Advisor, friend, motivator, role model—a mentor is different things to different people. For some, mentorship is about seeking guidance and learning from the experience of those who’ve been there and done that. For others, it’s all about finding their strength and becoming aware of an inner potential they never knew existed.

It was precisely with this aim that FITT launched its first Global Mentorship Pilot Program in June 2021. As a global standard for international trade training and certification, FITT has among members of its community a plethora of accomplished Certified International Trade Professionals (CITPs)* who are experts in their respective niches and possess a wealth of knowledge and wisdom. Leveraging the skills and experience of these seasoned CITPs to illuminate the paths of aspiring international trade professionals was the driving force behind this pilot mentorship program from FITT.

A unique project that fueled a larger cause

Not only would this initiative offer students, aspiring entrepreneurs, and other like-minded individuals in international business an opportunity to access personal, holistic, and continuing guidance from experienced CITPs, but would also help build a more engaged, recognized, and valuable global CITP community that is actively giving back to the field of international trade.

What it entailed

The mentorship program consisted of a six-month virtual interaction between 5 pairs of selected mentees and CITP mentors. The candidates were selected based on their applications, and the mentors and mentees were then matched based on experience, goals, networks, application questions etc. Each of the matched mentee and mentor pairs decided the frequency of their virtual interactions throughout the six months and responded to monthly feedback about the progress of their mentorship opportunity.

A project team consisting of CITP volunteers was established to support and oversee the program while continuously improving the mentorship experience. Their contribution in volunteering their time and efforts to help organize this program has been pivotal to taking this project from conceptualization to a successful launch.

Meet our CITP mentors

An experience that exceeded expectations

The six months passed by like a breeze, and the pilot mentorship program soon approached its conclusion. This was an excellent time to ask the participants to reflect on the mentorship experience and the value these interactions had added to their professional repertoire.

Much to the satisfaction and delight of the organizers, the feedback received to FITT’s pilot mentorship program more than validated the myriad benefits of mentorship and mentoring.

Here’s what the participants had to say:

“The main reasons why I applied to the FITT mentorship program were the invaluable support that I would receive from a mentor, and because I trusted FITT to match me with the mentor that was the perfect fit for the needs that I had at the moment, which was to enter the Mexican restaurant market with our digital loyalty program”

“The results have surpassed my expectations.”

–  Jose Manuel Torio (mentee)

‘I came into the mentorship program with an open mind and desire to have an organic approach with my mentor. We had set some topic of interest for each meet. My mentor delivered resourceful information each time, our topics would always lead to some great discussions. My mentor’s business experience and background were most inspirational, she was able to give me not only valid tips and resources, most importantly she inspired me to push forward in international business.”

 – Emmanuelle Atsain (mentee)

Access to timely and expert mentorship is a dream come true for many

An experienced mentor facilitates the opening of unseen doors of possibilities for their mentees, thus proving to be the catalyst that steers them towards success.

“My mentor was Floyd Simpkins, and he was beyond professional, kind and thoughtful in every meeting we had. Floyd not only understood my professional path but also, taught me how to create an action plan for my personal and professional goals. My mentor shared valuable life experiences with me, and he gave me great advice on how to deal with some setbacks I went through a couple of months ago. I can’t thank FITT and Floyd enough for this fantastic opportunity.”

 – Valeria Mayorga (mentee)

An opportunity to receive individual guidance from a seasoned professional not only facilitates mentees’ paths towards the accomplishment of their goals but also results in positive personal development.

The greatest advantage of having access to a trusted mentor is developing the ability to recognize one’s strength—thus leading to increased self-awareness and enhanced self-confidence.

Doing international business can be quite complex…, having the support of an experienced mentor is an invaluable asset to succeed in one’s endeavors.

 – Jose Manuel Torio (mentee)

“The three most valuable insights that I gained from my mentor are: to never let an opportunity slide or someone else will take it, It’s ok to be the only woman in the conference room, and that it’s important to stay current with politics as whom one votes for reflects with trade agreements.”

 – Emmanuelle Atsain (mentee)

The enthusiastic support of the CITP volunteers from the planning committee

The CITP volunteers who were a part of the planning committee have played a major role in shaping and building this pilot endeavour. Their enthusiastic support in giving back to the CITP community has helped open the doors for aspiring business professionals, leading them closer to achieving their goals.

“The experience of being on this committee was very rewarding as it introduced me to some very talented people who were all very dedicated to delivering a program that would meet the professional development needs of its members and potential members of FITT.  It is a very humbling but worthwhile experience. You learn so much and grow personally through this experience, and I feel that I have made new friends and mentors of my own by getting to know the other team members. I look forward to participating in any future iterations of this initiative. I also wholeheartedly encourage and recommend participation in this initiative to my fellow members in FITT.”

– Raymond G. Joyce, CITP, member of the Mentorship Program Project Team.

Mentorship—a win-win for both the mentee and mentor

What’s fascinating about mentorship is that both mentor and mentee stand to gain from the unique relationship between them. For our CITP mentors, the mentorship experience proved to be a fulfilling one as it gave them an opportunity to contribute first-hand to help shape their mentee’s professional journey.

The rewards are subtle, yet profound, in having a potentially positive impact on a young professional’s future, in work and life.  At the end of the day, I have every confidence in my mentee’s determination and ability to achieve her goals in the future, and I wish her every success.

 – Floyd Simpkins, CITP (mentor)

“Though both, mentor and mentee, had established clear objectives about the program development, I believe the outcome went further in terms of expertise-sharing and learning. My mentee shared many ideas and concerns about how to best develop his international business strategy. His openness taught me a lot about his efforts to be a more effective business manager. In exchange, I believe I was able to provide him with insights and some advice to guide his work. I found the whole process satisfying, which led to an excellent personal rapport.”

I found in this program an opportunity to add more value to the international business profession in general. I´d like to thank my mentee for his trust and sincerity, as well as FITT’s pilot mentorship program for leading this initiative.

 – Guillermo Larios, CITP (mentor)

Besides the fulfillment of being able to “give back,” mentoring someone sharpens communication skills and offers exposure to a wide range of situations and perspectives, thus helping broaden the scope of knowledge for mentors as well.

“The three most valuable insights that I gained from the program are:

1) As a mentor you need to be ready for any possible change or twist in the life of your mentee – and have the experience and knowledge to guide a mentee through whatever challenges they may face in their life and their work.

2) Patience and consideration are important attributes of a mentor

3) Much of the program’s success depends upon the choice of mentee – and based upon my limited experience, FITT chose well.”

 – Floyd Simpkins, CITP (mentor)

FITT’s pilot mentorship program has undoubtedly succeeded in setting in motion the wheels of a wonderful endeavour—creating a channel that connects aspiring entrepreneurs with the experienced wisdom they need to help them realize their goals and ambitions of a lifetime. We look forward to this program gaining momentum and completing several fruitful iterations in the years ahead.

Sign up to the FITT newsletter to be notified about upcoming mentorship opportunities and to stay current with the latest trends and jobs in international business.

*Certified International Trade Professional (CITP) is trademarked for use within Canada. FITT International Business Professional (FIBP) is trademarked for use internationally. Both reflect the same FITT-certified designation.

The post FITT completes six-month pilot of virtual global mentorship program appeared first on Trade Ready.

That’s why, last week, Startup Canada hosted a Twitter Chat with FITT and an all-CITP®|FIBP® (Certified International Trade Professional) panel of business experts. These seasoned professionals gave practical advice on “How to weather-proof your business.” With varied markets, supply chain disruptions and so many other hurdles in the international business landscape right now, they offered up international market entry strategies, risk-mitigation techniques, and personal stories on how to best navigate these waters.

The Twitter Chat featured:

Daniel Lewis, Author, and International Speaker, CITP
Lora Rigutto, Loyalty and Engagement Manager, FITT, CITP
Craig Atkinson, Founder and Director, Lexmerca International Trade, CITP

Question 1: Staying agile and adaptable

The chat started off with this question: “Business is always changing, but some changes, we never see coming. How do you stay agile and adaptable?”

CITP Lora Rigutto had sage advice about upskilling and updating your knowledge in different areas of business.

While CITP Daniel Lewis answered with the following:

“To stay agile and adaptable I suggest diversifying and developing your skills. Become more knowledgeable about your products, industry, or new industries to gain a competitive edge. Consider becoming an educator, expert, or content creator in your field.”

While I was building my tea business over the past 10 years, I also found opportunities to put myself out there as a Public Speaker and Brand Strategist. When the pandemic hit and rattled my supply chain, I switched on my virtual keynotes and brand strategist superpowers. As a result, I have been able to weather the storm and still generate good business. #StrategicPivot—Daniel Lewis, Author, and International Speaker, CITP

Meanwhile, CITP Craig Atkinson talked about remaining on top of your sector specifics: “I think the best way to stay agile and adaptable is to stay abreast of what is going on in your sector and the potential impact of disruption. Adaptability depends on having a business structure that is flexible.

The second question prompted some excellent advice as well:

Question 2: Planning for global growth

Daniel Lewis chimed in first, suggesting that businesses need to start by asking the questions “why?”:

” I always suggest starting with ‘WHY?’ Whether starting or expanding your business internationally, asking WHY first can provide you with all the reasons (or lack thereof) for a specific course of action. WHY are you expanding?  WHY now?  WHY this market?”

“At the same time, I decided to polish my professional image and sharpen my international business knowledge by becoming a #CITP. With these tools on my belt as a foundation, I was ready to rock n roll!”

“If your WHY is compelling enough, then you can get to the HOW? Approached my global growth plans by first going through international business training where I developed an export plan to better materialize my goals and ambitions.”

Meanwhile, Lora Rigutto gave this nugget of wisdom:

If you fail to plan, you plan to fail. You need to determine how to move goods or deliver services to a target market, overcome regulatory or cultural hurdles, and use market entry and international sales and marketing strategy with clear and measurable sales and marketing objectives.—Lora Rigutto, Loyalty and Engagement Manager, FITT, CITP

Question 3: Weather-proofing and risk mitigation

Question three, “How do you weather-proof your business your own business as you grow globally?” got down to the details and surfaced some great insights, including notes on addressing knowledge gaps from Lora Rigutto.

Daniel Lewis, on the other hand, talked about creating multiple contingency plans with an “If this” guide:

Question 4: Risk and business

Question four addressed an important reality about business: that it always comes with risk.

There were multiple answers for this one from panelists and participants alike:

Question 5: How to expand

Question five dove into global expansion, a quintessential topic for SMEs, and it garnered advice that ranged from influencer adoption strategies to joining trade shows and trade missions.

Question 6: When to expand

Knowing exactly when you’re ready to expand your business is critical for success, and that’s what question six tackled:

Questions 7 and 8: Economic risk and opportunity

While questions seven and eight talked about economic risk and the opportunities they present. Panelists and participants recounted their experiences during the pandemic and how they used these to create opportunities for themselves:

Final Thoughts and Questions

And with that, the official questions were over and the panelists and participants were given an open mic to talk about topics, such as their CITP experiences:

And the single most important thing they did to weather-proof their business over the past year:

A fantastic gathering of great business minds, the Startup Chat gave emerging entrepreneurs and SMEs a lot to think about, in addition to access to Startup Canada and Startup Global’s plethora of resources, contests, and funding opportunities too.

Learn more about Startup Canada’s Startup Global Portal here: http://ow.ly/OBns50FXewH

Don’t forget, once you register, you can access several FITT presentations, workshops, videos, and even a discount on FITTskills training.

The post How to weather-proof your business: CITPs weigh-in with Startup Canada appeared first on Trade Ready.

Ben Chutta’s initiation into international trade began when, as an Asper School of Business student, he earned a scholarship to do a one-semester exchange in Pécs, Hungary. During his time there, he took Master’s courses in international business, European Union law, and Corporate Social Responsibility and had the opportunity to travel to 14 countries throughout the continent.  

This exchange motivated him to apply for another scholarship, which he won as well. This time it was in Guadalajara, Mexico. There, he learned about global marketing and competitiveness with a focus on Latin America. He also got a chance to travel with his group to Mexico and Ecuador.  

These opportunities set him firmly on the path to an international business degree and brought him his very first global role of selling luxury cinema seats to movie theatres all over the world.  

“Within four years, I led our market entry into 15 countries and managed a team in the UAE, France, The Netherlands, Canada, USA, and Mexico.” 

Business trips through Europe—traveling to five countries in five days 

In 2019, Ben and his French colleague traveled through Europe on five business trips. Each trip typically consisted of a meeting with the largest movie theatre in each of the five countries, and they would visit one country a day.  

“One trip example is a meeting in Paris then a drive to Gent, then a drive to Amsterdam, followed by a flight to Bremen, and finally a flight to Krakow. As a Canadian, nothing seemed “far,” but to our friends in Europe, we were crazy! Throughout these trips, I learned so many valuable lessons, built great connections, and had a lot of fun along the way.” 

Winning an award at the “Spirit of Winnipeg” gala 

Every year, the Winnipeg Chamber of Commerce holds the “Spirit of Winnipeg” gala, where leaders from the business community, politicians, and award nominees are invited for an evening of recognition. There were 50 submissions for the “International Trade” award category, and to his pride and delight, Ben and his previous company were declared as the winners. He had the honour of accepting the award and giving a speech in front of 600 of Winnipeg’s business leaders. This was a truly memorable experience for Ben that he will always cherish. 

In 2019-2020, he was invited by the World Trade Centre of Winnipeg to speak as an alumni success story to 32 SMEs in the Trade Accelerator Program. Ben spoke about his company’s international success and drew from his personal experiences to provide direction to the companies involved with the program. 

A piece of advice that Ben would like to share with his Canadian counterparts: 

“Don’t underestimate your ability to work internationally. As a Canadian, you are exposed to different cultures every day, which many countries do not have the privilege of. You already have an advantage, so make sure to leverage it.” 

Enrolling in trade training to gain holistic knowledge and to fill in the gaps 

Having set the CITP designation as his final goal, Ben began his journey towards achieving it by signing up for FITTskills courses in international trade. The modular learning format made it manageable, and he found that the online learning worked with his busy travel schedule.  

The courses, coupled with his hands-on experience, helped him polish and refine his international business professional skills. Although sales and marketing are his main areas of expertise, the FITTskills courses taught him a great deal about international finance and the global value chain. 

“My favourite course was International Trade Finance. Before the first module, I knew finance was my main weakness. Once I completed the course, I immediately felt adept and knowledgeable in this area, which gave me the confidence to now call myself an international business expert.”

After completing his FITT Diploma in International trade, Ben decided to apply for the prestigious credential he had long been aiming for—the  CITP®|FIBP® designation, which he earned in May 2021. He considers the designation to be a valuable addition to his professional profile as it sets him apart as an expert in his field, validating the skills and knowledge he has worked so hard to achieve. 

“After five years of international business experience, completing all six courses to receive the FITT certificate and diploma, the designation was the icing on the cake. I am honoured and excited to join the thousands of CITPs helping to create a more globalized world.”

On how he foresees his CITP designation playing a role in his future career 

“As I continue to build my international consulting business, the CITP designation will reinforce to my customers my education, skillset and experience, and give them more confidence that I am someone who has what it takes to help them expand globally.” 

Ben’s enthusiasm and passion for his profession have already earned him several well-deserved successes. We have no doubt that his energy, knowledge, and focus will spur him on to achieving greater laurels in the years to come. 

The post CITP Spotlight: Ben Chutta, International Business Consultant  appeared first on Trade Ready.

Officially enacted in 2000, the African Growth and Opportunity Act (AGOA) has shown promising results, with ITA (International Trade Administration) noting, “Since its implementation, AGOA has encouraged substantial new investments, trade, and job creation in Africa. It has helped to promote Sub-Saharan Africa’s integration into the multilateral trading system and a more active role in global trade negotiations. It has also contributed to economic and commercial reforms which make African countries more attractive commercial partners for U.S. companies.” 

For international business professionals looking into new markets, especially U.S. markets, this trade act is compelling in many ways. However, many details cannot be overlooked, and any international trade plans using AGOA require strict oversight, guidance, and strategy. That’s why FITT and our partner Africa Business Venture held a joint event on AGOA on July 7, 2021.

This event, Understanding the African Growth and Opportunity Act (AGOA) and How It Can Benefit Your Business with U.S. Trade featured CITPs, International Trade Lawyers and African Business Experts—each of whom gave insights into some of the most common questions about Africa, AGOA and international laws pertaining to business between Africa and the United States.  

With fantastic questions from attendees and detailed answers from the panelists, the event provided a wealth of information for anyone interested in AGOA, international trade in Africa, and overall global trade practices, highlighted below: 

Event Panelists:

• Host: Sonia Galat, Director, Africa Business Venture 
• Moderator: Rob Howard, CITP, Of Counsel, Canada, Givens & Johnston PLLC 
• James (Gar) Hurst: Partner, Givens & Johnston 
• Karl Miville de Chêne: CITP, MBA, Partner at TFO Canada 
• Nilesh Mistry: Customs & Trade Consultant Misca Advisors Ltd. 

Why was AGOA created? 

Karl Miville de ChêneKarl Miville de Chêne: CITP, MBA, Partner at TFO Canada:  

AGOA has been put in place in order to favour less developed countries in the southern part of the continent of Africa. These countries produce all kinds of things: edible food, minerals, arts and crafts and, also, technical objects. Now they’re producing cars and airplanes…you’d be surprised what they can offer. In regard to services, tourism, the IT and IP sectors in countries like Rwanda or Nigeria are humongous and can be used in many ways for American companies.

Now, one of the reasons AGOA was put in place was to be favorable to exporting African producers, but it also was put in place to build a commercial bridge between the United States and these parts of the African continent. There are all kinds of training and support trade missions in different African countries when they adapt to the AGOA requisite… [together] it helps create a better commercial environment.

What kind of services and products does Africa have to offer? 

Nilesh Mistry, Customs & Trade Consultant, Misca Advisors Ltd: 

In terms of products and services, Africa’s got a diverse range of products and services to offer. You’ve got tourism opportunities, you’ve got IT opportunities… Africa is really a growing continent, especially the youngsters who are getting into a lot of technology products that are really quite world-class. But, again, understanding a market means having to spend time in that market, having to do due diligence to find out who you can talk to and who can give you what you need.

You’ve got to be very careful. Yes, international trade is a good business, but it’s a very risky business and, as a business, you’ve got to ask, “How can I reduce and minimize my risks?” Don’t go in thinking, “I can make a lot of money.” Instead, go in asking “What are the risks involved and how can I avoid them?” Africa, like every other country, has its share of shocks, so  you can use distributors and agents, but make sure that you’ve vetted them thoroughly and know what they can offer you and what you can give them. 

What is required to be an AGOA-eligible country? 

 Rob Howard, CITP, Of Counsel, Canada, Givens & Johnston:

To be an AGOA-eligible country, a country has to prove that it’s establishing and following market-based economies and the rule of law. Things like the elimination of barriers to U.S. trade, investment protection of intellectual property, efforts to combat corruption, policies to reduce poverty, increasing the availability of health care and education, protecting human rights, worker rights, and the elimination of childhood labor practices.

When I first heard about AGOA, I thought, why would it be in the country’s best strategic interest to just lower all their tariff barriers and then not demand anything in return? The answer is, I think the U.S. is looking at this as a way to put forward their values and develop these relationships with countries. Kind of like Karl was saying, that’s in their best interest as well. 

What’s the difference between qualifying for AGOA and claiming the country of origin? 

James (Gar) Hurst, Partner, Givens & Johnston: 

There are actually two different things: there’s qualifying for AGOA, which means that 35% of the costs have to be realized in the AGOA country. And then there’s shifting the country of origin which is a slightly different concept. There’s a number of rules and tests that have to be looked at but, essentially, the idea is this: if all you’re doing is repackaging, cleaning, washing, or, in some cases, just merely assembling already manufactured parts, then that is not going to be sufficient work in the country to determine the origin.

What is transshipment and why is it such a concern for US customs? 

James (Gar) Hurst, Partner, Givens & Johnston: 

Transshipment means a couple of different things. Most of the world thinks of transshipment as “Hey, you know, we took the ship from Legos to Rotterdam, and we took the container off of that vessel and put another vessel and went from Rotterdam to the United States. A lot of people think of that.

Transshipment in customs means something different. It means that you’re taking goods from one country, China, for example, and are trying to pass them off as products of another country. That’s important because a lot of goods from China are subject to extremely high duties—in some cases, well over to 300%—in the United States. So, there’s a real temptation there for those producers who now have lost their market to sell to anyone who will take it, then stamp Made in India or Made in Bangladesh, and then try to turn around and sell it to the United States. That is a crime. It’s a crime if you’re doing it fraudulently.

If you’re doing it just sort of negligently the problem is that those goods are still subject to those duties which can be a really nasty surprise for your customer when they’re importing these goods. And now, suddenly, the government comes to them and says, “Oh you owe us you know hundreds of hundreds of thousands or millions of dollars in duties that you weren’t expecting to pay—that would be a problem for profit margin.”

To discover more questions and answers about AGOA, watch the event recording. To learn more about FITT and Africa Business Venture’s partnership, read Looking to diversify? Here’s how and why you should consider entering African markets  

The post Understanding the African Growth and Opportunity Act (AGOA): Event Recap  appeared first on Trade Ready.

In a recent press release, The WTO (World Trade Organization) predicted that world trade was set for a strong but “uneven recovery” in the aftermath of COVID-19, with the volume of global merchandise trade expected to increase by 8.0% in 2021 after having dropped 5.3% in 2020.

They were also cautious to note: “The relatively positive short-term outlook for global trade is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries.”

Considering the simultaneous feeling of optimism and uncertainty in the current economic climate, FITT recently hosted an online panel discussion as part of our Challenge and Change series of events to discuss the next phase of business as vaccinations begin to roll out across the world.

For some, there is a light at the end of the tunnel, while others feel they are still very much in the woods, so we turned to a panel of international business experts to draw up useful insights and strategies that businesses could use to move forward in the current climate.

The event, From Reactivity to Adaptability—Advice and Resources for Businesses on the Rebound, explored

• How various industries were faring
• Shipping and supply chain trends
• Risk mitigation strategy for the coming months
• Available businesses support resources, networks, and organizations
• And much, much more.

See what some of the speakers had to say below:

Watch the full event including a LIVE Q&A with the panel below

SME and industry insights, the new normal and innovation in tech

Bernadette Fernandes – Founder & CEO, The Varanda Network

Bernadette’s global business career began in 1986 and has spanned several sectors. She has spent the last 10 years consulting her Varanda Network clients all over the world. She is passionate about helping SMEs develop their export readiness and connect them to business opportunities in markets worldwide.

As circumstances are changing, and many are looking forward to getting back to normal, what type of approach do you think a business can take for preparing for a more normalized market?

Bernadette:

With the exception of travel…we now see a lot of things that we want to do differently or less of, like not having to go into a workplace and, instead, having a more balanced life.

I know some technology companies that are actually now more successful because they are able to offer alternatives to travel. I look at Kognitive Spark, a software company based in New Brunswick where I live, and they’ve seen an increase in clients, applications, target market and revenue because they offer an augmented reality solution with the Microsoft hololens that provides things like maintenance support remotely to onsite staff instead of sending a technician from wherever that expertise happens to be.

Having said that, I do believe that there are many businesses that want to establish some semblance of normal, even if it’s not the normal we were used to. So there are things that businesses are doing or can do to prepare themselves for this new normal—most of which seems to be around digital transformation. To establish or grow an online presence, pivoting and transformation seem to be the things within our control these days, so instead of sending salespeople to tradeshows or to client premises, we’re now relying on e-commerce or social media sales.

Risk mitigation strategy and how to best prepare your business for market changes

Enrique Sobalvarro: CITP, Director-at-Large, The GoldMind Project

Enrique is an international trade professional, connector, entrepreneur, strategist, and expert advisor with over 20 years of experience. He is now working as the Director-at-Large for The GoldMind Project. He is also a member of the Advisory Board of the Small Business Initiative at Calgary Catholic Immigration Society and, recently, contributed to Calgary’s post-pandemic recovery as a Business Mentor the Bounceback YYC (a Mount Royal University and the City of Calgary initiative) helping hundreds of entrepreneurs to launch their businesses.

Rahim Mohtaram – Ph.D., Professor at Saskatchewan Polytechnic

Rahim has been working in global supply chains for 15 years and has negotiated and executed more than 155 international contracts in sales, purchasing, agencies and distributors in 25 countries. He is also a CIFFA certified instructor and provides consultation on cost reduction strategies.

The last time we were together on a panel, we talked about smart cost-saving logistics strategies that businesses were employing during the pandemic. Have you seen these strategies change at all in 2021?

Smart finance options to carry your business through all conditions, plus the importance of having a documented business plan.

Amesika Baeta, CITP – Senior Account Manager, Export Development Canada (EDC)

As a senior account manager at Export Development Canada, Amesika works with companies of all sizes, of all industries, helping them take their business abroad providing them with trade finance, knowledge and risk mitigation strategies. She has worked in international trade for over 10 years.

Amesika Baeta:

Finances are always top of mind for a lot of SMEs. Though many are looking forward to a normal economy, the truth is that we’re not out of the woods yet. What are some insights you can share with those looking to tread this uneven scenario?

For many, we’re still trying to find ways to access working capital to support their needs. Over the last year, the support for SMEs has quickly changed to adapt to the needs that we see that they need. The reality is that this current economic climate has come, and EDC is one of those agencies where we had to really pivot to figure out how we serve our exporters. Now, in March of last year, the Government of Canada expanded EDC’s mandate to specifically help Canadian companies take on the risk of doing international business. But in times like this, the Canadian government said, no, we need to stretch beyond your mandate to help non-exporting Canadian companies face the financial challenges that they’re experiencing due to the pandemic. As a result, we had to make the necessary changes to adapt and extend some of our focus and our solutions to support needs like this, literally overnight.

We went into problem-solving mode to figure out how does EDC fit into this and what can we do? What are the mechanisms that we have to change to really grow and meet the demands of Canadian companies? So, our goal was to minimize the impact of this pandemic on all businesses—all Canadian businesses. One of the things that we did is create a business credit accessibility program, or what’s most know as the BCAP guarantee program, which is a stepping stone off of another financial guarantee program that we have at EDC that is traditionally for commercial bank clients. So this guarantee program was created in partnership between EDC and Canadian financial institutions to help businesses of all sizes and sectors and all across Canada to address the financial impacts that COVID-19 was having on companies. So, qualified applicants could be quickly approved to help meet their cash flow needs through their bank or credit unions to help manage their day-to-day expenses.

This guarantee is being served through your financial institutions and it is specifically done in new operating lines or term loans, if that’s what your bank has determined in order to really help sustain your operations. So, to pay rent, to pay employees salaries, to, you know, keep the lights on, and to keep operations moving. That program is there to try and help bring the cash into the economy to help companies survive and really, it’s been a program that has been very successful for companies of all sizes and shapes. It’s still available today, so, if you’re not speaking to your bank about it, I would highly recommend going and speaking to them to see whether you qualify.

I must preface that EDC’s program has set parameters and how each bank or credit union applies those parameters differs. So, again, I highly recommend that you and speak to your financial institution and see whether the BCAP guarantee program is a good fit for your cash flow needs. Now, there’s been other things EDC has done. We’ve taken on more credit appetites when it comes to insurance. We’ve made special accommodations to consider if companies had to pivot their business models to sell PPE or start manufacturing PPE and other types of things during the pandemic. So, we’ve made a lot of adjustments to our own regular programs that we provide in order to try to help companies through this pandemic. I welcome people to come to EDC either through the website or online or contact me directly, and I can put you in touch with the appropriate colleagues in the organization to talk through any of those programs to see whether they’re the right fit for your needs right now.

There’s a number of other programs that have been created through our sister crown corporation. Business Development Bank of Canada, there’s provincial programs, federal programs, some municipal programs have all been done to try and help companies survive this pandemic. We’re not out of it yet, so don’t be too proud to go out and ask for what help is out there because that’s the only way that we’re going survive. I also really recommend that you don’t make assumptions as to what you think you are eligible for. Just go and ask an expert to see whether your business could be eligible for these programs. The skilled team at EDC can also answer any kind of trade-related questions that you might have.

If you’re interested in specific COVID-related programs, there are a number of different resources that you can leverage. Virtual tradeshows that you can attend or industry reports or the Canada Export program—that’s run through the Trade Commissioner Service.

In terms of things that I’ve been seeing in my role as an account manager specifically in the GTA region, I’ve seen how important it is for companies to really have a good sense of where they are financially. So, as Enrique mentioned, the importance of having a business plan that addresses what the current needs are—not from when you wrote it, five, 10, or 20 years ago. You may have revamped it for today, and there has never been a time where it has been so needed for companies to make sure they take the time to stop and re-evaluate and readjust themselves as well. And, when it comes to working capital, that is extremely important because your bank is going to be asking for that organization. Any financial institution is asking to see a business plan. One, they want to understand how did you survive the pandemic, what do you do when you had a bad year and because you lost a few clients, that’s ok, but what did you do to pivot? What did you do to counteract that dip in sales? Are things starting to turn around in 2021? Have you had to start selling a different product? Did you move your product online?

We want to know that story as to what your business had to go through, so it’s important that you are building comprehensive financial statements, that you’re keeping interim statements up-to-date and your sales projections. The more organized, the more prepared you are to answer these questions, we’ll only ever be more in your favour and allow you to have more productive conversations with your financial institution.

The post Event Recap: From Reactivity to Adaptability: Advice and Resources for Businesses on the Rebound appeared first on Trade Ready.

On Monday, March 29th, ships stuck behind the colossal Ever Given vessel in the Suez Canal heard the echo of blaring boat horns and triumphant chanting. These were the sounds of celebration and hope, for the Ever Given, a 400m-long, 200,000-tonne (or 1,312-foot, 220,000 ton) ship carrying 18,300 containers, finally showed signs of movement. The ship had been wedged between the canal shores since Tuesday, March 23rd, causing a delay in an estimated $9.6 billion USD of trade goods per day, and an estimated $95 million in toll revenue for the canal, according to data firm Refinitiv—all in just under one week.

Image by kees torn – EVER GIVEN, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=89201715

A tenacious and exhausted team had been working to unblock the canal and managed to free the ship’s stern on Sunday. The next morning, they liberated its mammoth bow deeply embedded into the canal’s eastern bank. This set in motion the final stages for the ship’s full re-floatation and, later, the canal’s reopening at 6 pm local time.

All the manpower in the area wasn’t enough to complete the task, however. Truly, the strong rising and falling full-moon tides played a significant role in the operation—giving crews and other personnel a small window of time in which to take advantage of the gravitational gift, along with the team of tugboats that had presumably pulled and pushed one of the heaviest loads they’ve ever moved, with the Ever Given being one of the world’s largest and longest container ships.

At first, what seemed to be a comical social media meme quickly turned to panic as the crisis revealed a much-overlooked reality within the international trade community: Most businesses and consumers take the world’s shipping routes for granted, vastly underestimating their fragility and vulnerability to accidents and delays—weaknesses that can breakdown supply chains in the blink of an eye.

With the Ever Given now freed and traffic in the canal slowly moving again, it’s a good time to reflect on the lessons learned from the 6-day ordeal, giving international trade and business professionals much to think about in the aftermath. Here are some of the most prominent international trade lessons from the Suez Canal obstruction:

1. Contingency and risk mitigation planning make crises manageable

It’s cliché, but always expect the unexpected. The most prudent businesses perform thorough commercial risk assessments that cover all areas prone to hazard, allowing them to identify weaknesses in their business strategy (such as international shipping risks).

This allows them to create contingency plans that involve having the proper financial resources, inventory, supplies and supply-chain alternatives in times of crisis or delay.

Many risk mitigation and contingency strategies include proactive contract negotiations at the start of trading relationships that clearly define accountability for unforeseen shipping delays, as seen in the image below:

FITTskills Lite: Analyzing and Mitigating Commercial Risk, copyright © 2017,2019,2020 FITT

Interested in this topic? Get our FREE FITTskills Lite Download here:

2. Know your Incoterms® and who is responsible for shipping delays in your contracts and negotiations.

Incoterms® are integral for creating bullet-proof contracts that clearly define who pays for shipping charges and when. Businesses engaging in international trade use The International Chamber of Commerce Incoterms^® rules in contracts to clearly communicate the obligations, costs and risks associated with the transportation and delivery of goods, providing clarity for sellers and buyers.

Businesses who know their Incoterms® well, carefully use them to ensure there are no areas of risk or uncertainty between the seller and buyer in the contract—and specifically, with shipping, no questionability as to whom is responsible for shipments and costs in the various stages of transport. They are essential for avoiding costly disputes between both parties.

Incoterms® also make it easier for the buyer and sellers to

• outline their individual obligations in the trade transaction
• determine when risk moves from the seller to the buyer under each specific rule
• define the buyer and seller costs and responsibilities.

Last year, Incoterms 2020® was released with updates and changes from their previous version. Those seeking to create advantageous contracts should make sure their knowledge or credentials are up-to-date, especially in light of recent events.

3. Option just-in-case supply chains

In recent years, “just-in-time” supply chains—supply chains that transport items to factories on an as-needed basis for manufacturing—have been popular. But with the glaring effects of the Suez Canal playing out in real-time, experts are predicting that some companies will move toward “just-in-case” supply chains that focus less on predicting the right amount of demand and goods in the moment, and more on having goods in stock and ready at all times—just in case delays occur.

“We are moving towards a just-in-case supply chain, not just-in-time,” noted Søren Skou, CEO of shipping firm Moller-Maersk, in an interview with The Financial Times on Monday, adding “It’s great when it [just-in-time supply chains] works, but when it doesn’t you lose sales. There’s no just-in-time cost savings that can outweigh the negative of losing sales.”

4. Think about more than one supplier

It’s not uncommon for international businesses to have more than one supplier because of scenarios like the Suez Canal incident. Even before the blockage, many businesses around the world were already in the midst of diversifying their supply chains and suppliers because of COVID-19-related shipping delays and restrictions.

The Suez Canal obstruction only served to amplify this need even more, serving as a sober reminder of the importance of planning for anything and everything that can go wrong when it comes to international shipping and international trade.

In a Forbes article, Mark Dohnalek, President and CEO of Pivot International, a global manufacturing, engineering, technology, product development company, also suggested another way for companies to avoid unpleasant surprises: “… have multiple sourcing options in place, as we learned during the pandemic. Another element of this recommendation would be to do business with one preferred vendor that has multiple operations across many regions of the world. This will avoid the massive impact a single location event would have on their business. This is by far the key toward mitigating exposure to these types of events in the future.”

*Main image contains modified Copernicus Sentinel data [2021], processed by Pierre Markuse – Container Ship ‘Ever Given’ stuck in the Suez Canal, Egypt – March 24th, 2021, CC BY 2.0. https://commons.wikimedia.org/w/index.php?curid=102400564

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