The WTO’s revised forecasts project modest growth in global trade, driven by easing inflation and interest rates, but caution remains due to geopolitical tensions and unresolved regional conflicts. Emerging markets, particularly in Asia, the Middle East, and South America, are set to lead growth, while advanced economies navigate persistent inflation and evolving supply chain dynamics.

From the potential impact of U.S. trade policies under the incoming Trump presidency, to the continued growth of e-commerce and technological innovations in trade finance, the year promises to reshape global commerce.

Risks such as economic downturn, supply chain disruption, and geopolitical instability create an atmosphere that highlights the need for agility, adaptability, and diversification in 2025.

Read on for our 10 2025 trends.

Curious about our past predictions? Check out what we thought 2017-2024 had in store.

• 10 global trade trends we’ll be watching in 2024
• 10 global trade trends we’ll be watching in 2023 
• 10 global trade trends we’ll be watching in 2022 
• 10 global trade trends we’ll be watching in 2021 
• 10 global trade trends we’ll be watching in 2020
• 10 global trade trends we’ll be watching in 2019
• 10 global trade trends we’ll be watching in 2018
• 10 global trade trends we’ll be watching in 2017

1. Global trade growth expected amidst transition and uncertainty

In October 2024, the WTO released their revised global trade outlook for the remainder of 2024, and looking ahead at 2025. In it they increased the growth forecast for world merchandise trade in 2025 by 0.3% from the previous estimate, bringing it to 3.3%.

The WTO clearly pointed out that the risks to this forecast were for growth to be slower, rather than higher. Meaning that uncertainty in geopolitical tensions, policy (this was before the results to the U.S. federal election were known), and regional conflicts could end up reducing growth, despite the predicted increase.

However, the WTO does see gradual trade recovery continuing in 2025 among declining inflation and therefore lowering interest rates, which generally stimulate consumer spending and investment.

Overall, it looks like 2025 will be another active and transitional year for trade.

2. Stubborn inflation and uncertainty in 2025 global economic outlook

Global inflation is slowly coming down from the global peak of 9.4% in 2022 during the pandemic. The global inflation rate is expected to come in around 4% during 2025 according to the IMF.

Most of the advanced economies will come in under 2% in 2025, with developing economies averaging just under 6%.

The major central banks including the Federal Reserve, Bank of England, Bank of Canada, and the European Central Bank are all expected to continue to ease their interest rates over the course of 2025.

While the supply chain disruptions that brought inflation up to its 2022 high have mostly been resolved, new risks remain in play, as we’ll discuss in more detail later in this article. The above-mentioned geopolitical and trade tensions could have an upwards impact on inflation as well.

Modest growth is the overall prediction when it comes to the global economy in the year ahead, particularly in emerging markets. The caveat being that challenges remain, and there is still a significant amount of transition and uncertainty in the global environment that throws risk at any solid economic prediction.

3. Enhanced customer service in e-commerce delivery

The pandemic accelerated a shift in consumer behaviour, driving widespread adoption of e-commerce, particularly for “big and bulky” items like furniture and appliances. Today, online shopping continues to dominate with consumers expecting streamlined delivery experiences, including real-time tracking, timely scheduling, and exceptional service.

For retailers, delivery is no longer just about price but providing seamless customer experiences. This trend has intensified competition, especially as giants like Walmart and Amazon are projected to dominate 60% of online retail by 2027, prompting smaller retailers to prioritize affordability, speed, and personalized service.

Technological integration is key, and many retailers are bringing in platforms and tools that can enable real-time visibility, automated operations, and flexible scaling for peak periods. Companies are also enhancing services, such as pre-assembly and installation, to meet evolving consumer expectations. However, challenges remain, including rising operational costs, workforce shortages, and the need for advanced supply chain solutions.

Despite hurdles, the last-mile delivery market is poised for growth, driven by increasing online sales of bulky goods. Companies focusing on consumer trust, technological innovation, and efficient operations are likely to thrive in this competitive landscape.

4. Threats of supply chain disruptions continue in 2025

Many of the supply chain disruptions that plagued shippers throughout 2024 continue to threaten operations into 2025, including Red Sea diversions, the risk of labour disruptions, and tariff threats. This means fluctuating demand and high rates are likely for the year ahead.

To mitigate the risk of delays and disruption companies are turning to “frontloading”, filling their warehouses early to ensure they have access to the inventory they need to serve their customers, ahead of any incoming tariffs.

Canada just weathered a difficult holiday season with the Canada Post strike impacting deliveries during peak season. This labour disruption is estimated to have cost more than $1billion dollars in damages to small Canadian businesses, according to the Canadian Federation of Independent Business.

In the U.S., the USMX – the union representing container shipping lines and port operators along the East and Gulf Coast ports – are currently on a short-term contract extension that is set to expire on January 15, 2025. If they fail to reach an agreement with the International Longshorement’s Association (ILA), any resulting labour action could disrupt almost 50% of U.S. ocean freight volumes.

Between political, environmental, and labour disruptions, things remain uncertain in the international supply chain industry in 2025.

5. Trade Wars & Tariffs & Trump

Donald Trump’s second presidential term may bring significant changes to global trade policy, including increased tariffs and retaliatory measures. These actions are expected to heighten global economic uncertainty, disrupt supply chains, and strain international trade relationships. Analysts predict tariffs could be used as leverage in negotiations on issues like immigration and foreign currency policies.

Europe, already grappling with internal political challenges, faces particular risk with U.S. tariffs. These measures could reduce European exports, hamper economic growth, and complicate efforts to stabilize the eurozone economy.

China, a primary target of U.S. trade policies, may retaliate by targeting American agricultural exports and diversifying its trade relationships. Countries like Mexico and Vietnam could benefit as companies seek alternative supply chain locations.

U.S. corporations dependent on global supply chains are preparing for potential disruptions, while economists warn of unintended consequences, including higher consumer costs and distorted production networks.

The possibility of widespread retaliatory measures raises fears of a global trade war, with Europe, China, and North America among the most affected regions. But going into the start of 2025, it remains uncertain whether Trump will follow through on these threatened tariffs and to what degree.

6. Digital transformation in trade finance technology

Despite an incredible amount of work being done, the digital transformation of trade finance is a slow process. The complexity involved in creating and standardizing policy, regulations, systems, and languages presents enormous challenges. But progress continues to be made.

According to Euromoney, major financial institutions including DBS, ING, Lloyd’s and Santander are seeing 30-70% of trade transactions initiated digitally.

Among TradeReady’s most-read articles of 2024 were 2 articles focused on TradeTech and electronic trade documentation. So we know this is a topic to keep up with in 2025.

We’ll be checking in with CITP Craig Atkinson, an active member of the WEF’s TradeTech community, throughout the year for further developments in digital tools that will help businesses trade more easily, effectively, and efficiently.

7. Growing focus on skills-based hiring and retention in global trade roles

“Skills-based hiring”, or hiring based on evidence of a candidate’s specific skills rather than years of experience or formal education, has been a growing trend since the term was first coined back in 2012.

The upsides include a decrease in turnover, reduction in training time and cost, increased productivity, and universality (a more standardized process of finding a vetting candidates makes hiring easier and increases inclusivity).

For international trade roles especially, the complexity and specificity of skills needed to successfully complete trade transactions and processes makes this hiring strategy particularly useful.

And this trend is growing worldwide:

• This study found that 79% of companies now look for skills when hiring, vs. 21% that prioritize experience and education.
• Between 2017 and 2019, 46% of middle-skill and 31% of high-skill jobs moved away from requiring job applicants to have a formal college education.
• In India, where 50% of recruiters use skills as a key factor when searching for candidates, skills-based hiring is also on the rise.
• In 2022 the US government released new guidelines on applying a skills-based approach to hiring for federal positions.

In 2025, “right-skilling” will be a top trend in talent acquisition as companies continue to focus more on finding the right people for the job, rather than the right degree, or years of experience.

Secure, verifiable digital credentials will continue to play a key role in the finding and hiring of individuals with the right skills to do the job in the year ahead.

8. Regional trade growth

In 2025, global trade growth is projected to be led by emerging markets in Asia, the Middle East, South America and the CIS region. As a result of expected incoming tariffs for goods entering the U.S. market from major trading partners like China, many companies are looking for new manufacturing locations. This could continue to benefit other manufacturing regions like Vietnam.

Overall, according to the World Bank and the World Trade Organization (WTO), global trade is expected to increase in 2025, with the following regional trade forecasts:

• Asia: The fastest growing region for exports and imports, with a 4.7% increase in exports and a 5.1% increase in imports
• Middle East: The fastest growing region for imports, with a 9.0% increase
• South America: A 4.6% increase in exports and a 5.6% increase in imports, but a small decline in exports (-0.1%)
• CIS region: A 4.5% increase in exports and a 1.1% increase in imports
• Africa: A 2.5% increase in exports and a 1.0% increase in imports
• North America: A 2.1% increase in exports and a 3.3% increase in imports
• Europe: A -1.4% increase in exports and a -2.3% increase in imports

Friendshoring, nearshoring, and supply chain diversification will likely continue to transform global value chains in the year ahead.

9. WEF’s top 10 global risks

The World Economic Forum puts together an annual list of the most urgent global risks that organizations face in its Global Risks Report. As we await the release of the 2025 report in January, we can expect a continuation of many of the risks expected to be forefront in the time period of 2024-2026 listed in last year’s report.

These risks included, in descending order:

1. Misinformation and disinformation
2. Extreme weather events
3. Societal polarization
4. Cyber insecurity
5. Interstate armed conflict
6. Lack of economic opportunity
7. Inflation
8. Involuntary migration
9. Economic downturn
10. Pollution

As you peruse the list, you’ll see that several of them are already included in the top international trade trends we’ll be watching in the year ahead. We’ll be ready for updates in January.

10. AI use-cases for trade activities

Artificial intelligence is ubiquitous, groundbreaking, a timesaving gamechanger, a cybersecurity and intellectual property nightmare, it’s good, it’s bad, it’s ugly. It’s everywhere. And it’s certainly not going away in 2025, despite some backlash.

Within the international trade environment we’ll be following along with AI developments and use cases in the following areas:

• AI in hiring processes
• AI in supply chain visibility
• AI in supply chain management & sustainability
• AI in customs & documentation
• AI in inventory management
• AI in demand forecasting
• AI in trade finance

The post 10 global trade trends we’ll be watching in 2025 appeared first on Trade Ready.

These issues not only underscore the canals’ vulnerabilities but also their crucial role in maintaining the rhythm of global trade. We also explore the strategies traders are employing to navigate these challenges and the outlook for 2024, offering insights into the future of these vital trade routes.

The importance of the Suez and Panama canals on global trade

The Suez Canal, opened in November 1869, is a 193km waterway connecting the Mediterranean Sea and the Red Sea. It provides a direct route for shipping between Europe and Asia, bypassing the need to navigate around Africa.

Approximately 12% of global trade, representing 30% of all global container traffic and over USD $1 trillion worth of goods per annum, passes through the Suez Canal.

This includes energy, commodities, consumer goods, and componentry from Asia and the Middle East to Europe.

The Panama Canal, opened in 1914, is another vital link in global maritime transportation, connecting the Atlantic and Pacific Oceans. It allows ships to avoid the lengthy and hazardous voyage around Cape Horn at the southern tip of South America.

The canal plays a crucial role in global supply chains, supporting the movement of various commodities, including dry bulk, container, chemical tankers, and more.

Both canals have had significant impacts on global trade patterns and the economic geography of many countries. They have facilitated faster delivery of goods, but their importance also highlights the vulnerability of global supply chains, as blockages or disruptions in these canals can have far-reaching effects on global trade.

What the drought has meant for the Panama Canal

Drought has led to decreased water levels in the Panama Canal. Water is crucial for its operation as water is used to raise and lower ships. This has forced officials to reduce the number of vessels they allow through the canal, creating expensive complications for shipping companies.

The decreased water level in the canal is due to a reduction in rainfall in Panama, leading to one of the driest years in the country’s history. The water levels in the Gatun Lake, which feeds the canal, have reduced significantly compared to usual levels during this period. This has led to a severe drought, with water levels in the canal at their lowest in decades.

The drought has also led to delays in transit times, impacting the ability of large cargo ships to quickly traverse the Panama Canal. The Panama Canal Authority has had to implement new operational measures to minimize the impact of the drought. These measures include reducing the number of available reservation slots, which is likely to hinder trade levels, particularly for the U.S. East Coast.

The drought has also forced the Panama Canal Authority to reduce the number of daily transits and the maximum weight of ships. This has led to a significant reduction in vessel traffic, affecting the flow of trade. Shipping containers are piling up along the Panama Canal, triggering a wave of supply chain disruptions. This has led to additional container surcharges imposed by ocean carriers on shippers.

Conflict in the Red Sea – and its implications for Suez Canal attacks

The current conflict in the Red Sea involves Houthi rebel attacks on maritime vessels, which has escalated military tensions in the region. The Houthis, who control a portion of Yemen’s Red Sea coastline, have launched missiles and drones against ships, asserting that their actions are retaliatory against Israel’s military operations.

These attacks have disrupted international shipping and led to a multinational maritime security force, including the U.S. and U.K., to protect ships passing through the Red Sea. The implications for the Suez Canal are significant, as it is one of the world’s most crucial maritime chokepoints, facilitating a substantial portion of global trade.

Any disruption in the Red Sea could impact the flow of traffic through the Suez Canal, potentially causing delays and economic repercussions due to the canal’s strategic importance in connecting the Mediterranean Sea to the Red Sea, and thereby Europe to Asia.

The conflict has attracted international attention, with various nations responding to the threat against shipping in the Red Sea. The U.S. and U.K. have conducted airstrikes against Houthi targets in response to the attacks, and there is concern that the conflict could widen, affecting not just regional but global stability and trade.

Understanding the aggregate effect

The aggregate effect of restrictions on both the Panama Canal and the Suez Canal can be profound for global trade.

These two canals are essential shortcuts for maritime shipping, with the Panama Canal facilitating about 6% of global trade and the Suez Canal handling around 12%.

When operations at these canals are restricted, it can lead to significant delays, increased shipping costs, and disruptions in supply chains.

For instance, the Panama Canal drought meant that ports in Panama, Nicaragua, Ecuador, Peru, El Salvador, and Jamaica have seen 10% to 25% of their total maritime trade flows affected. The Suez Canal’s disruption could add about 10 days to the duration of trips, forcing ships to reroute around the Cape of Good Hope, adding about 3,000-3,500 nautical miles to journeys.

These disruptions can also lead to increased prices for goods. The Panama Canal disruption has resulted in generalized price increases for agricultural commodities and food industry produce in Europe. The Suez Canal disruption could lead to surging prices on goods like oil and gas.

Moreover, these disruptions can force shipping companies to seek alternative routes or modes of transportation, which can further increase costs and lead to delays. Some shipping companies have started redirecting shipments from Asia away from Panama and through the Suez Canal due to the Panama Canal’s drought.

However, with the ongoing conflict in the Red Sea, these companies may have to reroute their vessels around Africa, adding at least a week to the journey.

5 strategies importers and exporters can action to avoid disruption

Goods and commodity traders can employ several strategies to compensate for disruptions in the Panama and Suez Canals:

• Diversification of supply chains: One option is to diversify supply chains to reduce dependence on a single route. This could involve using alternative shipping routes, such as the Cape of Good Hope, or exploring other modes of transportation like rail or air freight.
• Stockpiling and strategic reserves: Traders can maintain larger inventories or strategic reserves of key commodities to buffer against supply chain disruptions. This strategy, however, increases storage costs and may not be feasible for perishable goods.
• Insurance and hedging: Insurance can cover losses from supply chain disruptions. Traders can also use financial instruments, such as futures and options, to hedge against price volatility caused by disruptions.
• Investment in technology: Considering investing in technology to improve supply chain visibility and resilience. For example, supply chain control towers, which use artificial intelligence, can provide timely alerts about possible delays, allowing companies to adjust their strategies quickly.
• Trade shifts: Traders can shift their trade towards regions or countries that have increased their exports due to the disruptions. For instance, traditional trading partners like the United States, Canada, Australia, and New Zealand have heavily increased their exports towards the EU27.

While disruptions in the Panama and Suez Canals pose significant challenges, traders have a range of strategies at their disposal to mitigate the impacts.

The choice of strategy will depend on the specific circumstances of each trader, including their risk tolerance, financial resources, and the nature of the commodities they trade.

The Panama and Suez Canal outlook for  2024

In the Panama Canal, daily vessel passages, expected to reduce to 18, have instead increased to 24, and delays have been minimal. Despite this, water levels remain below average, and the long-term outlook for the canal is concerning.

Meanwhile, the Red Sea crisis has seen increased security issues, with attacks by Yemen’s Houthi forces on commercial vessels causing most container lines to reroute around Africa and the Cape of Good Hope.

It is arguably the Suez Canal that poses the biggest ongoing threat to global trade flows. The lack of security in the Red Sea has led to a halt in transits, and any potential military action to increase security will risk escalating the regional conflict.

Users of freight shipping are advised to monitor the port outlook as 2024 is set to see problematic conditions for at least the first quarter. Resolving the issues in both the Panama and Suez Canals is crucial for the industry, but there are no quick or easy solutions to the challenges currently faced.

The post How international trade will be impacted by Suez and Panama Canal disruptions in 2024 appeared first on Trade Ready.

Some of these topics keep reappearing year after year, due to new developments and their continued place of prominence in the minds of global trade practitioners. This year the atmosphere of volatility and uncertainty continues, leaving many to question the value in forecasting at all. But, as global economist Peter Hall put it:

“Here’s the deal: forecasting is alive and well, if the impact of structural changes is properly understood. Data and cyclical fundamentals together show that the global economy is stronger than news reports have indicated. This will help it to absorb higher interest rates without drastic fallout, and to continue growing for a number of years to come. To do this successfully, more capacity will be needed to deal with rising demand.”  – Watch the full video “Is Forecasting Passe?”

Read on for our 10 2024 trends.

Curious about our past predictions? Check out what we thought 2017-2023 had in store.

• 10 global trade trends we’ll be watching in 2023 
• 10 global trade trends we’ll be watching in 2022 
• 10 global trade trends we’ll be watching in 2021 
• 10 global trade trends we’ll be watching in 2020
• 10 global trade trends we’ll be watching in 2019
• 10 global trade trends we’ll be watching in 2018
• 10 global trade trends we’ll be watching in 2017

1. 2024 global trade outlook “uncertain but pessimistic”

Not exactly a cheerful headline. The United Nations Conference on Trade and Development (UNCTAD) released its Global Trade Update on December 11, projecting a highly uncertain and generally pessimistic outlook for 2024.

Factors contributing to this outlook include ongoing geopolitical tensions, escalating debt, economic fragility, lower demand in developed countries, reduced trade in East Asia, an increase in trade-restrictive measures, commodity price volatility, and lengthening supply chains, especially between China and the United States.

Despite these challenges, the report notes some positive trends in 2023, including a slight increase in trade volumes, indicating resilient global demand for imports, and a $500 billion growth in trade in services, boosted by delayed COVID-19 recovery.

The report also highlighted the impact of “friend-shoring, and a general decrease in the diversification of trade partners. For more on friend-shoring, skip to Trend 6.

The update provides a mixed picture across economic sectors. Looking ahead to 2024, the commodities sector faces continued uncertainty due to regional conflicts and geopolitical tensions. Overall, the report paints a complex and challenging landscape for global trade in the coming year.

2. Inflation and the global economy

The global economy remains fragile and uncertain, revealing and worsening structural weaknesses in an interconnected global system. Again, we need to look to the emerging trend of offshoring, reshoring, and friend-shoring, creating an overall realignment of global trade between rival blocs. This is expected to reshape supply chains, necessitating adjustments in company relationships and giving rise to new competition.

One of the central challenges facing the global economy in 2024 is of course inflation, with projections indicating a global inflation rate of 5.8%, and core inflation not expected to return to target levels of around 2% until 2025, according to the International Monetary Fund (IMF). However, variations in inflation rates are anticipated across countries and regions based on economic conditions, policy responses, and external shocks.

While the United States experiences relatively low inflation rates, the global average masks substantial differences among countries and regions. Advanced economies are projected to see inflation below 3.0% in 2024 after averaging 4.6% in 2023. In Canada, inflation is expected to continue to decline, staying between 2% and 3%, stabilizing at 2% toward the end of 2024, according to the Business Development Bank of Canada (BDC). Notably, the economic landscape includes a weak Eurozone and a particularly challenged United Kingdom.

Altogether, the realignment of global trade relationships and ongoing inflation challenges are expected to have a significant impact on supply chains, corporate relationships, and competitive dynamics in the coming year and beyond.

3. Cybersecurity risks continue to rise

2023 was a big year for cybersecurity, during which we saw the biggest ever denial of service (DDoS) attack and an increase in cyber attacks with big impacts such as the cyber attack that forced the FAA to ground all flights due to issues with a critical system.

The WEF listed “Widespread cybercrime and cyber insecurity” as the 8^th biggest risk in its Global Risks Report 2023.

Forbes lists 12 predictions for cybersecurity in 2024:

1. Rise In Ransomware Attacks
2. Increased AI-Powered Attacks
3. Flipside: AI As A Cybersecurity Tool
4. IoT Vulnerabilities
5. Electric Vehicle Hack Apocalypse
6. Quantum Computing Threats
7. Data Velocity And Hybrid Infrastructures
8. Need For DevSecOps
9. More Zero Trust Adoption
10. Stricter Data Privacy Regulations
11. Additional Supply Chain Attacks
12. Biometric Authentication Challenges

Ramping up cybersecurity action plans and closely monitoring the latest emerging threats will top many companies’ agendas for 2024.

4. Policy impact after COP28’s first ever “Trade Day”

At the COP28 climate summit in October, global leaders marked the first “Trade Day” as part of the UN’s annual climate conference, underscoring the crucial role of trade in combating climate change. Trade is seen as a powerful tool in addressing climate change, influencing global carbon emissions as well as facilitating the flow of green goods and services essential for the low-carbon energy transition.

The global production and distribution of goods and services contribute to roughly a quarter of all carbon dioxide emissions, according to UNCTAD.

During Trade Day’s launch a roadmap of trade policy options were outlined aiming at an equitable and ambitious response to climate change. Discussions throughout the day centered on leveraging trade policies to decarbonize global supply chains, incentivize businesses toward a net-zero future, secure value chains related to the energy transition, and integrate environmentally responsible practices into trade finance.

Emphasis was made on the need for a multi-lateral approach to creating climate and environment regulations so that small businesses and vulnerable countries aren’t entangled in a complex web of rules.

How this multilateral approach to more equitable and environmentally friendly trade policy will come together remains to be seen, and we will be watching for updates throughout 2024.

5. Trade-restrictive measures on the rise

Returning to UNCTAD’s The Global Trade Update, the report highlights a notable rise in trade-restrictive measures in 2023, particularly non-tariff measures (NTMs). This has been attributed to an increase in industrial policies and added pressure for countries to fulfill their climate commitments. As a result, nations are adopting policies that favor domestic industries and aim to decrease dependence on foreign supply chains.

A recent report from UNCTAD, titled “Trade regulations for climate action,” identified 2,366 NTMs related to climate change, impacting 3.5% of potentially tradable goods and representing 26.4% of global trade. For better or worse, UNCTAD has predicted that these policies are likely to reduce the growth of international trade in the year ahead.

6. Friend-shoring planning in 2022 and 2023 is coming to fruition in 2024

The continue swing toward “friend-shoring” for geopolitical closeness and overall risk reduction has led manufacturers to invest billions in building factories that are either closer to the end consumers or in less risky regions.

This trend continues after years of supply chain upheavals caused by a litany of weather, geopolitical and Covid-10 disruptions. The transportation sector is responding by increasing capacity in regions such as cross-border connections between Canada,U.S. and Mexico connecting to Latin America.

“During 2022, 14% of all U.S. imports by value originated in Mexico, according to data analyzed by Supply Chain Dive. Similarly, U.S. firms have long been financially active in the country, and are responsible for 42% of the total foreign direct investment in Mexico since 2006,” according to SupplyChainDive

There has been a general trend of re-organization of shipping routes enacted over the last couple of years that are now starting to operate at full capacity. Logistics companies are racing to fill the demand. Intermodal logistics services out of Mexico have been steadily growing as the CUSMA trade agreement increased demand in the region and became even more attractive within near-shoring and friend-shoring strategies.

UNCTAD also highlights a marked increase in trade concentration. “There has been an overall decrease in the diversification of trade partners, indicating a concentration of global trade within major trade relationships.”

7. Digital trade growth continues, particularly in Africa and Asia Pacific

Digital trade, comprising all digitally ordered or delivered transactions, is reshaping the global economy.

A significant trend in this digital era is the remarkable growth of digitally delivered services, which have nearly quadrupled in value since 2005, passing the growth of goods and other service exports. In 2022, these digitally delivered services made up 54% of total services exports, offering new opportunities for players in the global market, including micro, small, and medium-sized enterprises (MSMEs).

Although developed economies lead in exporting digitally delivered services, developing economies, including those in Africa and Asia Pacific, are increasingly participating in this trend. However, least-developed countries (LDCs) are experiencing slower growth in the export of digitally delivered services.

Governance in digital trade is also growing, and significant progress has been made through bilateral and regional trade agreements. Today most FTAs include digital trade provisions. On top of trade rules, regulations addressing cross-border data flows, consumer protection and issues around competition are being addressed through digital trade policy.

We’ll be watching for developments in the technology, standards and trade policy that come into play in 2024.

8. AI in everything

AI is transforming international trade, along with everything else, at a breakneck pace. This is presenting as many challenges as opportunities to businesses facing cybersecurity risks aided by AI, as well as using AI to find and protect against potential cybersecurity vulnerabilities.

It’s providing a myriad of supply chain technology solutions to improve processes in managing inventory and production, and automating logistics. It is also being used to ease cross-border regulation by automating form filling, checking for documentation errors, and help with compliance checks.

Financial institutions are using AI to assess financial risk and detect potential fraud. Small businesses are benefiting from productivity gains by using AI to generate trade documents, assist with translation, customers service and much more.

As AI is increasingly coming into play in business and in every day life, we will be watching with a particular eye on how it’s being used in trade functions and international businesses.

9. Supply chain volatility is still a huge factor in 2024

At the time of writing, shipping lines are being diverted from routes through the Suez Canal as attacks on cargo ships have recently escalated. At the same time, drought in the Panama Canal region is causing a major bottleneck and disrupting trade flows as shippers look for alternative routes or face delays.

Supply chain disruption has been the name of the game for several years now, with major challenges in capacity amid labour shortages and fluctuating demand during the Covid lockdowns of 2020-2021, geopolitical conflicts and weather-related delays.

While things have now largely stabilized since the pandemic with less congestion and a more normalized supply-demand, new risks such as cyberattacks, continued geopolitical conflicts, and labour shortages and strikes.

Fortunately, there are several tools and new technologies emerging to assist businesses with better plan and risk mitigation including the use of AI tools, digitization of trade and shipping documents, and increased transparency.

10. Gaining new skills most important in getting hired and promoted in 2024

An Employ Recruiter Nation Report shows that 39% of employers plan to focus on internal mobility in 2024. This indicates HR decision-makers’ awareness that in a competitive job market, hiring highly qualified candidates is challenging, necessitating a focus on retaining existing employees.

To do this, there’s a growing trend for organizations to offer career pathing, reducing employee turnover and enabling them to transition into roles that offer challenges and new learning opportunities. This eases the burden on hiring teams, as businesses seek to acquire new skills rapidly through upskilling and internal mobility.

Providing stipends for certifications, mentorship programs, and career development training will be crucial for leaders to empower employees to enhance their skill sets and advance within the organization. While external talent sourcing remains important, prioritizing internal mobility is set to be a major focus in 2024.

At the same time, emphasis will shift from the prestige of past employers on resumes to the importance of individual skills, which also improves diversity, equity, and inclusion. This shift benefits organizations as it broadens the talent pool. Businesses are expected to concentrate on addressing skills gaps which will help achieve the organization’s long-term strategic goals.

The renewed focus on skills is in both technical and leadership competencies, evident in job postings and internal opportunities. Recruiters will continue to prioritize leadership skills, ensuring that the current short-term focus doesn’t lead to leadership skill gaps in the future.

The post 10 global trade trends we’ll be watching in 2024 appeared first on Trade Ready.

With the Teamsters union reaching a tentative contract deal with UPS management just days short of the July 31 deadline, what is said to be the largest strike in a century against any U.S. employer, has been narrowly dodged.

Since UPS is responsible for almost a quarter of all U.S. deliveries, the strike would’ve been devastating on the U.S. economy. According to a study conducted by the consulting firm Anderson Economic Group, a 10-day UPS strike would stand as the costliest strike in at least a century, inflicting a staggering $7 billion economic impact on the U.S. economy.

UPS delivers more than 24.3 million packages everyday and its competitors like FedEX and DHL would not have been able to bear that kind of backlog had the strike taken place. “In the event of a market disruption, no carrier can absorb all UPS volume,” FedEx executives wrote earlier this month.

These disruptions have far-reaching implications for U.S. imports and exports, as delays and bottlenecks in key ports can ripple through the entire supply chain, affecting businesses across the continent.

And as we talk about supply chain disruptions, the impact of the Canadian BC port strike adds further challenges to North American shipping. Canadian National Railway Co., the country’s largest railway, predicts it will take two months to recover from the B.C. port strike. The recent two-week strike at B.C. ports halted freight flows through West Coast terminals, leading to a minor impact on earnings this quarter.

Projected impacts on North American shipping

The strikes have triggered considerable supply chain disruptions across North America. Additionally, freight forwarding and shipping services are under pressure due to increased demand amid global trade uncertainties. These disruptions have led to delays, congestion at ports, and challenges in meeting delivery timelines.

“I expect we’ll see shortages of inputs, higher shipping prices, which will ultimately be passed on to consumers, and longer lead times for deliveries if the strike takes place,” Bart De Muynck, chief industry officer at project44, a supply-chain data company told Bloomberg in an email.

According to survey results released by the Canadian Federation of Independent Business 53% of business owners believed that the strike will affect their operations.

Even though a tentative resolution has been met in both cases, the surge in freight forwarding demand will likely cause prolonged delays in the supply chain. This situation can lead to increased costs, reduced profitability, and potential damage to business reputations. As U.S. and Canadian imports and exports are affected, industries relying heavily on timely shipments, such as retail and manufacturing, may face significant challenges in meeting customer demands.

7 ways businesses can mitigate the unforeseen

As the shipping industry grapples with ongoing disruptions, businesses must consider mitigating actions to protect against further crises.

1.    Diversify shipping routes

To mitigate the impact of port strikes and disruptions, businesses should adopt a proactive approach and work to diversify their shipping routes. It is crucial to collaborate with reliable freight forwarders who can assist in identifying alternative routes that can be utilized during times of disruption.

By exploring and establishing contingency plans for various shipping options, they can ensure smoother operations and minimize the adverse effects of potential disruptions on their supply chains.

2.    Leverage multiple carriers

Relying solely on a single carrier at any point along a shipping route can leave businesses vulnerable to delays and bottlenecks when a strike occurs.

Experienced freight forwarders and logistics experts can help you plan for back-up carriers, both domestic and international, to spread the shipment load and minimize dependency on one provider.

This strategy not only minimizes the impact of major disruptions but also enhances flexibility and adaptability in the face of even minor challenges, allowing for the best service available.

3.    Optimize technology and tracking

Businesses can utilize advanced tracking systems and technology to monitor shipments in real-time. These systems enhance visibility and enable more proactive responses to potential delays or rerouting. This enhanced visibility provides businesses with crucial data and insights, allowing them to stay informed about the location, status, and potential challenges their shipments might face.

With real-time tracking, companies can  identify any potential delays or deviations from the planned routes sooner, enabling them to take immediate actions to address these issues.

4.    Re-evaluate contracts

Having full clarity on liability and compensation terms within shipping contracts and freight forwarding agreements is essential to navigate through periods of uncertainty. Are the correct Incoterms identified throughout the contract? Seeking professional legal advice during contract negotiations can help businesses to identify potential gaps or loopholes that could leave them vulnerable during crises.

By renegotiating contracts to include specific clauses that address issues related to labour disruptions, force majeure events, and supply chain delays, they can establish a solid framework for handling unforeseen challenges.

5.    Proactive communication

When faced with potential delays or disruptions, it is essential to keep customers informed in a timely and honest manner. Openly sharing information about the challenges being faced and the steps being taken to address them fosters trust and confidence in the business relationship.

By providing regular updates on the status of shipments and any possible delays, businesses can manage customer expectations and allow them to plan accordingly.

6.    Identify opportunities for flexibility

Another important thing businesses can do to is assess their logistics operations and identifying areas where they can be flexible. This involves recognizing parts of the supply chain where slower delivery or alternative transportation methods can be accommodated without compromising overall operations.

By identifying areas of flexibility, businesses can proactively communicate with suppliers, freight forwarders, and customers to set appropriate expectations and develop contingency plans.

7.    Invest in risk management

Investing in risk management is crucial for businesses seeking to enhance their supply chain resilience. By developing robust risk management strategies, companies can proactively address potential disruptions before they escalate into significant challenges.

A comprehensive risk management approach involves carefully analyzing the supply chain from end to end, identifying vulnerabilities, and understanding how various scenarios could impact operations.

What does the future look like for businesses impacted by the North American shipping strikes?

In the face of ongoing challenges, businesses must prepare for a future that prioritizes resilience and adaptability.

The recent strikes and disruptions have highlighted the need for diversified shipping routes, efficient risk management strategies, and transparent communication with customers.

Embracing advanced tracking technology and collaborating with reliable freight forwarders will become essential components of successful supply chain management.

Looking ahead, the future of shipping in North America will likely witness a growing emphasis on optimizing imports and exports through robust and flexible logistics networks. By proactively addressing potential disruptions and investing in innovative solutions, businesses can position themselves to thrive in an evolving and dynamic shipping environment, where the new normal is to expect the unexpected.

The post Supply chain affected by recent labour disruption? Here are 7 steps to mitigate shipping risks appeared first on Trade Ready.

Ongoing supply chain woes dating back to the beginning of the COVID-19 pandemic in late 2019, continue to affect the entire supply chain industry.

The combination of shipping delays and product shortages around the globe means that retailers and consumers alike do not have access to all the products they need. Small and large businesses have been affected all year round, but these problems are only compounded during the holiday season due to the increase in demand.

Why Should You Already Be Prepping Your Supply Chain?

If you don’t prep your supply chain for the upcoming 2022 holiday season months in advance, you will be stuck in reaction mode if anything inevitably goes astray.

As a result, your business will suffer and it may take quite some time to rebound.

Whether you are a retailer planning your holiday inventory, a supplier trying to serve your clients needs, or a manufacturer keeping up with orders, it is important to be aware of the challenges on the horizon and begin prepping your business early. Let’s get into it.

Pandemic Supply Chain Challenges That Get Worse During Holidays

There are two main challenges that have affected the supply chain since the start of the pandemic.

The first is shipping delays.

There are a myriad of causes of these delays, including increased demand and longer processing times for goods. Since online ordering exploded in popularity after the pandemic hit, it was inevitable that standard shipping times from retailers like Amazon and direct orders from overseas would take longer; there simply aren’t enough trucks or cargo ships to meet the increase in demand.

The pandemic also slowed down processing with safety protocols and quarantining for transporters exposed to COVID-19, on top of increased demand for online ordering during lockdowns.

As you can imagine, the increased demand on these delivery routes during the holidays only compounds these problems. Even with lockdowns lifted and people able to shop in stores again, it has not been uncommon to have even major box stores suffering from lack of stock due to shipping delays.

The second main challenge affecting the supply chain industry is manufacturing delays.

Countries need to work together to produce products. Everyone is aware of the microchip shortage that affected vehicle output, the production of PS5 consoles, and so much more.

With manufacturing facilities all over the world working at reduced capacity and struggling to receive raw resources, the supply chain has been affected at every level.

While many of the delays have been resolved with relaxing safety protocols and procedures, the supply chain industry is still playing catch up in many areas.

Until the industry fully rebounds from the pandemic, manufacturers, delivery specialists, large and small retailers, and consumers all need to make some changes in the way they prep for the holiday season in 2022.

Another minor challenge that some companies will face is storage capacity. Below-average sales and overstocking can result in limited storage capacity. Some companies have had to build additional warehouses, issue refunds without accepting the products back, and cut down on the number of products they sell in order to have space to store them.

Stocking for the Christmas holidays is only going to compound these storage issues.

How To Prep Your Supply Chain for the 2022 Holiday Season

Prepping for the holiday season this year has been started as early as 6 months in advance of Christmas eve. Whether your company is involved in only one component of the supply chain or you are responsible for the entire process, there are preparatory strategies you can implement to reduce the disruption encountered during the holidays.

1. Order Early

One of the best ways for retailers to meet the holiday demand is to order early. Since it is impossible to predict what the delays will be like closer to the holidays, placing orders of high-selling products early on is the best way to maximize your ability to meet demand right through the Christmas season.

Giving the supply chain a few extra months to get your products manufactured and delivered is one of the only ways to guarantee that you have the products when you need them.

2. Order Big

Another strategy you can implement as a retailer is to place larger orders less frequently. If you have a product that you know sells well, overstock your facilities so you don’t have to worry about placing an emergency order later on as you get close to selling out.

If you are purchasing items coming from Asia, these two strategies are even more important since the shipping time has nearly doubled from 40-50 days to 80-90.

3. Don’t Accept Labour Shortages

If labour shortages continue to be a problem for your supply chain, it is time to invest in more automated procedures or make changes such as consolidating inventory locations or changing partners to maximise efficiency of your time and money.

4. Track Shipments

Tracking the progress of your deliveries is an excellent way to keep on top of your supply chain and manage any delays that come up. For example, if one of your warehouses has a delay for a certain product but another location has some to spare, you may be able to shuffle the inventory temporarily to ensure both locations are stocked with the supplies they need until your shipment arrives.

5. Improve Yard Efficiency

Yard efficiency is one of the most complicated components of the supply chain since many drivers from many companies may be coming and going at all hours of the day and night.

Optimizing the procedures to limit gate congestion, filling empty dock slots, and tracking the drivers to know exact arrival times are all strategies that will benefit yard efficiency.

Keeping the internal warehouse organized will also contribute to your ability to get the trucks out in a timely manner and reduce shipping delays for every other component of the supply chain.

The post If You Haven’t Prepped Your Supply Chain for Holiday 2022 You’re Already Behind – Here’s What You Should Do appeared first on Trade Ready.

By now we’ve all experienced the effects of supply chain disruption that began with the pandemic in late 2019/early 2020. Between worker shortages, inventory shortages, high costs, long wait times and unpredictability, the challenges, for those doing business across borders especially, have been incredibly difficult to manage.

As part of Startup Global (Startup Canada’s annual  program empowering founders to start their business with a global mindset) FITT teamed up with them for this fascinating and informative Twitter chat on how to build a resilient supply chain – no easy task.

We brought 6 CITPs on board to share their knowledge and experience, and the insights were too great to limit to Twitter. So for those that missed it live, here are the conversation highlights.

CITP Panel:

• Greg Gerritson, CITP, Global Logistics and Trade Compliance Manager at Phoenix Technology Services
• Rahim Mohtaram, CITP, Supply Chain Management Program Coordinator at triOS College
• Audrey Ross, CITP, Trade Compliance Specialist at Orchard Custom Beauty
• Clarecia Christie, CITP, Professor International Business, Marketing and Management Studies at Algonquin College
• Igor Chigrin, CITP, Senior Business Advisor, International Expansion at
  BDC
• Veronica Abella, CITP|FIBP, Bachelor’s Degree in International Business

In your own business or as a customer of a business, what was your biggest supply chain challenge?

The biggest supply chain challenges nowadays are various risks (political, currency exchange rates, shutdowns, delays), cost pressure (raw material and energy costs, logistics freight,), and digital transformation requirements. #StartupChats

— Rahim Mohtaram (@RahimMohtaram) May 25, 2022

A1 – adjusting to
1) the new timing, ex. no more last minute bookings, have to book ocean 5 weeks in advance. Ports taking waaaayyyy longer to offload.
2) the amount of chasing! Nothing is on track, every project constantly monitored. #StartUpChats pic.twitter.com/WPxHAFrIx4

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

#StartupChats #CITP pic.twitter.com/Q4nOuSgmXr

— FITT (@FITTNews) May 25, 2022

When it comes to international business and your supply chain, how can you protect yourself?

A2 – Understanding true “landed costs” and associated supply chain intricacies within your business. #startupchats

— Greg Gerritsen (@greg_gerritsen) May 25, 2022

A2 From B2B perspective there are a number of risk mgmt tools to tap into such as export credit insurance, maritime insurance, inventory loss insurance, etc. @FITTNews #StartupChats

— Clarecia Christe CITP ?? (@ClareciaChriste) May 25, 2022

Ensure your contracts & documents are accurate, precise and compliant.
Now is the time to get super detail-oriented bc you cannot afford the extra charges for storage or delays.
Control what you can control – the precision of your paperwork. #StartupChats

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

Selecting reliable suppliers, early involvement of professional 3PL service providers, cargo insurance (Clause A plus war & SRCC), hedging, redesigning supply chain network, nearshoring or reshoring mixed with offshoring. #StartupChats

— Rahim Mohtaram (@RahimMohtaram) May 25, 2022

Let’s talk about Incoterms. What are they and how do they help entrepreneurs mitigate risk?

They regulate where the costs and risks transfer between the buyer and the seller in the international shipping transactions. So, you need to know incoterms to know when you start being responsible for the loss or damage of the goods in transit. #StartupChats

— Igor Chigrin (@winglobal_igor) May 25, 2022

The @iccwbo #Incoterms® rules are used in contracts to clearly communicate the obligations, costs, and risks associated with the transportation and delivery of goods, providing clarity for sellers and buyers and helps facilitate trade.
Learn more: https://t.co/Rs0PAq4F2n

— FITT (@FITTNews) May 25, 2022

Understanding INCOterms is crucial in import / export biz. Obvi, you want to choose the one w/ most advantage to you… but then you have customers & DDP is a real value add. You just have to ensure (& insure!) you plan for the costs & risks involved. #StartupChats

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

What problems are small businesses currently facing when taking their business internationally and exporting to new markets?

Recruiting experienced traders, finding a practical method for selecting the right target markets, finding a suitable and reliable agent, distributor, or partner in the target market, negotiating and drafting a comprehensive contract, and logistics coordination. #StartupChats

— Rahim Mohtaram (@RahimMohtaram) May 25, 2022

Finding and marketing to the right buyers or customer segments is also a problem, on top of all others. #StartupChats

— Igor Chigrin (@winglobal_igor) May 25, 2022

High costs! Freight rates being just one example.#StartupChats #SupplyChain #SME #CITP pic.twitter.com/jrxHreNlsJ

— FITT (@FITTNews) May 25, 2022

A4 Understanding industry regulations of international markets which affects their goods accessing the market, using incorrect HS Codes, assuming an homogenous culture, not using a customs broker. @FITTNews #StartupChats pic.twitter.com/1CxbSojCJP

— Clarecia Christe CITP ?? (@ClareciaChriste) May 25, 2022

A4. Generally what I see is an assumption that conditions, market and regulations will be similar to the home country. Not doing your homework. Also- – not bringing on paid advice (legal, financial, trade compliance) early enough. #StartupChats

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

A4- Marketing plan (online?), Financing (distribution, landed costs) and reverse logistics (returns/damages, customer service). #startupchats

— Greg Gerritsen (@greg_gerritsen) May 25, 2022

The pandemic has clearly shown the interconnectedness of our global supply chains. How do you navigate difficult conversations between all your different stakeholders?

Having a long-term view, creating cross-functional teams, early involvement of customers and suppliers in projects, honest and open negotiation and creative problem-solving technics, and strategic cooperation with preferred partners. #StartupChats

— Rahim Mohtaram (@RahimMohtaram) May 25, 2022

A5. Have them early and come with solutions.
It is a reality that you will not always have awesome convos with your customers. Be responsible, honest and get it over with so you can move forward together. #StartupChats

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

A5 – Being aware of cultural and business process differences in different regions and educating yourself so to have productive dialogue to overcome challenges, and help achieve goals. #startupchats

— Greg Gerritsen (@greg_gerritsen) May 25, 2022

A big part of being resilient is having a support system and strategies to overcome hard times. For supply chain issues, what might this look like for entrepreneurs?

A6 As we are in the #digitalage Entrepreneurs have new tools to use tracking shipments and communicating with 3PL partners; her the use of AI, Blockchains is playing a big part in managing some supply chain issues @FITTNews #StartupChats

— Clarecia Christe CITP ?? (@ClareciaChriste) May 25, 2022

A6. It’s connections and knowing who is in the community. @Startup_Canada @FITTNews @wekh_pcfe @ExportDevCanada @TCS_SDC , Chambers of Commerce, @OWITintl etc. #StartupChats

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

A6 – Relationships with trusted experts and resources who understand your vision and business. #StartupChats

— Greg Gerritsen (@greg_gerritsen) May 25, 2022

Knowing the impact supply chain issues have had in the past few years, will you structure your team differently in the future? Who can help entrepreneurs tackle these challenges?

A7. If you haven’t already adopted some digital tools and moved away from excel spreadsheets – the time is now.
Also- you can’t copy & paste someone else’s supply chain design. We all tried copying toyota JIT model… #StartupChats

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

Yes, We need cross-functional and cross organizational teams including all links in our supply chain, from third-tier suppliers to end-users. @FITTNews, @StartupsCanada, and @ExportDevCanada can help with their professional advice. #StartupChats

— Rahim Mohtaram (@RahimMohtaram) May 25, 2022

A7 first the entrepreneur must know the trade ecosystem and the players, budget for paid professional advisors such as CITPs @FITTNews in the business and hire great custom brokers, freight forwarders, etc. #startupChats

— Clarecia Christe CITP ?? (@ClareciaChriste) May 25, 2022

I’d say that a good freight forwarder can make a difference. They are not all equal. #StartupChats

— Igor Chigrin (@winglobal_igor) May 25, 2022

A7 – Talented CITP certified staff! #StartupChats

— Greg Gerritsen (@greg_gerritsen) May 25, 2022

What are some strategies you can adopt to make sure your customers remain happy even if there is a delay with shipments and product delivery?

Being proactive, considering pessimistic transit times, managing expectations when signing contracts, being realistic and honoring promises, clear and fast communication and explanation, increased visibility by online tools, hard work, and honesty. #StartupChats

— Rahim Mohtaram (@RahimMohtaram) May 25, 2022

A8 Bring customers in the supply chain journey with you with tracking technology, be transparent and realistic on arrival times, provide complementary services e.g. inventory management software, future discounts, etc. #StartupChats @FITTNews

— Clarecia Christe CITP ?? (@ClareciaChriste) May 25, 2022

A8. Over-communicate, provide them expectations in advance and sometimes you have to throw in a “we’ll cover the expedited delivery cost for this one!”

— audrey ross citp|fibp (@tresAudrey) May 25, 2022

A8 – Real time tracking and tracing, and visibility of your goods in transit. Regardless of mode, air (courier or heavy freight), land or Ocean. #StartupChats

— Greg Gerritsen (@greg_gerritsen) May 25, 2022

Yep! There will be a quiz later! https://t.co/AOYkY90git#Incoterms2020 pic.twitter.com/kVfQHsjQHn

— FITT (@FITTNews) May 25, 2022

Learn more about Startup Canada’s Startup Global Portal.

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 build a resilient supply chain – CITPs weigh in with Startup Canada appeared first on Trade Ready.

As e-commerce continues to grow and supply chains become more complex and global, logistics is skyrocketing in importance. Customers want their purchases faster and cheaper, and the logistics power of behemoths like Walmart and Amazon is forcing all kinds of other businesses to step up their performance to stay competitive.

However, the 21st century logistics market presents more than its fair share of unique challenges, and the truth is that it’s often simply not realistic to address them in-house, particularly for small and medium businesses.

Outsourcing logistics to third-party logistics providers, known as 3PLs, is an increasingly popular option. What’s behind the surge in popularity for 3PLs, and why does it make sense for many businesses to use them? Here are seven reasons that outsourced logistics are taking over in road, rail, sea and air.

1. Helps leverage the benefits of experience and expertise

A 3PL will be able to provide a level of knowledge and experience that most companies won’t have access to in-house. Working with a good 3PL, a business can expect to have access to:

• Extensive knowledge of shipping laws and regulations.
• More experienced and knowledgeable drivers.
• Insider information on receiver locations and delivery windows.
• Streamlined, expert-designed systems that cut out waste and reduce cost.
• Faster and more accurate paperwork.

These benefits can substantially improve operational performance, and they’ll continuously create value throughout a shipper’s supply chain.

2. Reduces or eliminates the expenses of maintaining a vehicle fleet.

Maintaining a vehicle fleet can be incredibly expensive, particularly for businesses that need to ship using larger vehicles such as tractor-trailers. An in-house vehicle fleet usually means substantial investments in equipment, maintenance, training, fuel, taxes, inspections and safety equipment.

A 3PL has already made all of these investments as part of their core business model.

3PLs take on these considerable investments in capital and maintenance so that their customers don’t have to make them.

They can also use their expertise to stretch these resources farther through techniques such as LTL (less than truckload) shipping.

3. Allows businesses to focus on core competencies.

The logistics sector is complex and competitive, and it takes a long time to learn the ropes. Employees who have to become logistics experts in addition to their other duties can find their time consumed by delivery coordination, maintenance, billing–and the many other daily tasks of logistics management. Bringing logistics experts on board can work, but it’s unlikely to be cheap.

Using a 3PL’s services helps a business to cut out these expenditures. By using a carrier with ready-made capacity, a business can focus on its core competencies without having to worry about complex matters of logistics in which they might not have expertise.

4. Provides access to a well-developed network of resources.

Networking is everything in logistics. Operational performance depends on having access to a wide network of carriers and drivers, and creating that network requires a substantial investment of time, effort and money. Logistics partners also have to be vetted. It’s important to ensure that they have a broker license, carrier surety bonds, proper insurance and other credentials.

A 3PL has already done the hard work of cultivating resource networks across a wide area and a wide range of services. Businesses working with 3PLs get access to these well-built networks.

3PLs with a national or global reach also make it much easier to expand operations into a new area because they’ve already laid the groundwork by extending their network there.

5. Offers more scalable and customizable services.

Flexibility is invaluable for creating better logistics performance, so the ability to adapt and scale is another significant advantage of using a 3PL. In the e-commerce era, it’s common for many businesses to experience large and sudden swings in demand, and a business that relies on its own logistics capacity can be left scrambling for the ability to fulfill a key order on time.

Working with a 3PL means a business will have less trouble scaling up their services when needed, and they can also coordinate with the 3PL to ensure that they’re well-prepared for busy seasons. Specialty needs such as refrigerated shipping are also usually easier to find through a 3PL that can tap into their sophisticated resource networks.

6. Provides improved last mile solutions.

Last mile logistics has always been notoriously tough to master. It’s gotten both more complex and more important in the e-commerce era, when consumers expect packages delivered to their doors lightning-quick.

Businesses that need last mile logistics can easily find a 3PL that specializes in last mile solutions. What’s more, 3PLs often provide services that are in high demand among consumers, such as white glove delivery, and they’ll have more resources to bridge the last mile in remote areas that are tough to access.

7. Creates better options for dealing with obstacles.

Everyone who’s ever worked in logistics knows just how common it is to encounter a breakdown, a bout of inclement weather, a backed-up loading dock or any of dozens of other things that can go wrong. For a business that doesn’t have the resources of a 3PL, these challenges can cause huge disruptions in the supply chain and create destructive ripple effects.

For a 3PL, these problems are old hat.

A quality 3PL will have backup systems in place to address the many common hiccups of logistics, from dispatching roadside mechanics to rescheduling other shipments to accommodate a delay.

That kind of peace of mind is difficult to put a price on.

With the many excellent 3PLs available today, many businesses have found that it doesn’t make sense to devote time and resources to in-house logistics. A good 3PL can help a business remove the headaches of logistics so they can get back to what they do best while the 3PL leverages its technology, network and expertise. Teamwork powers the best 21st century businesses, and it’s increasingly apparent that a 3PL is an indispensable addition to many teams.

The post 7 reasons e-commerce businesses are hiring 3PLs to help them navigate complex supply chains appeared first on Trade Ready.

COVID-19 is continuing to influence international trade. The supply chains of small and medium-sized enterprises (SMEs) are facing all kinds of disruption due to the current fast-moving situation.

The reality is that many SMEs are struggling to continue their businesses, an element of which has been conflicts or disputes with their suppliers.

Here’s why, and here’s what you can do.

• Which SMEs characteristics make them more vulnerable in COVID-19 situation?
• Which probable problems will SMEs encounter in the next months due to COVID-19?
• What are the common mistakes of SMEs in drafting a purchase and sales contract?
• What are the short-term measures that SMEs can take to reduce disputes and problems with their international suppliers?

Characteristics of SMEs

SMEs’ have characteristics that make them more vulnerable  to encountering problems with their suppliers than large enterprises. Why?

Because, in general, SMEs:

• Are not critical customers of suppliers, and there are many of them
• Do not purchase a large portion of a supplier’s total output
• Purchases are not a significant portion of a supplier’s annual revenues
• Are not agile enough to switch to another product or supplier quickly
• Cannot take swift legal actions against suppliers
• Cannot be protected individually by governments in international trade disputes

Common problems SMEs are facing

As mentioned above, most SMEs are not the first priority of suppliers in difficult situations. Furthermore, they might not have a suitable contract to protect themselves. Therefore, suppliers may decide to deprioritize some SMEs or even become delinquent.

In the current situation, many suppliers are shutdown, working at lower capacity, encountering internal finance problems, or experiencing other issues with production and operations.

This may force them to:

1. Fail to deliver or cancel some orders
2. Delay orders
3. Partial delivery
4. Decrease the quality of the goods in different methods
5. Increase the price or change the currency of the transaction
6. Change the terms and method of payment to safer methods for themselves
7. Decrease the packaging quality
8. Change the delivery conditions
9. Change the country of origin or place of departure
10. Announce bankruptcy or insolvency

Due to a variety of factors such as low expertise, bargaining power, or financing capabilities, SMEs might not write and sign professional contracts in their international activities.

Common mistakes cause losses and increase their vulnerability. Identifying the errors can help to avoid them in future cooperation contracts and mitigate their adverse effects in the current situation.

Here are some common mistakes and related solutions during the current world health crisis:

1. Problem: Not having a written contract

Some companies prefer to cooperate solely based on trust and do not write a detailed, comprehensive contract.

Trust is good, but not enough. The contract is will work when trust has failed.

The details of the business relationship should be written and signed by authorized officers of all parties. A purchase order, proforma invoice, quotation, and other instruments are not usually capable of covering all crucial details.

It is undeniable that when you do not write a contract, you are silent about most aspects of your business relationship, and details of the business will be ambiguous. Therefore, they will be up for interpretation and construction.  Never exit a successful meeting without a written text. It is crucial to write down what you have agreed to.

One clear written sentence is more valuable than ten pages of explanation in a petition to the court or arbitration centre.

Some companies that do not have a written contract are now struggling with their suppliers due to the effects of COVID-19, such as delays and non-delivery. Some businesses don’t even know which mechanism should be used to settle the disputes because they have not been specified in the details of an agreement.

Solutions:

If you are experiencing conflicts in a business relationship without a contract, finding the best operational solution depends on many factors, including:

• Type of conflict (number 1 to 10 mentioned above)
• Method of payment (open account, advance payment, documentary credit, etc.)
• The importance of continuing the business relationship for the parties, and level of trust
• Incoterms rule used
• Level of ambiguity in current business settings between the parties
• The importance of timely delivery of the product in the supply chain
• Ability to quickly find a substitute supplier
• Previous customary procedures between parties

Learn how to Ensure your company adheres to legal and ethical best practices as you discover what proactive and reactive measures you should take.

If you are experiencing conflicts with your supplier and you do not have a written contract, try to solve your problems via amicable solutions. In the meantime, consult with an experienced international trade lawyer to avoid more mistakes, analyze the above factors, and decide on your next steps based on international trade rules, your previous agreements, business settings, and your bargaining power.

All of your emails, phone calls, communications, and typical business actions matter in this type of situation.

So, analyze and confirm your decisions with experts before actioning them.  You need to be aware of the positive and/or negative effects of your messages. Keep an archive of all your correspondence and your partner’s acknowledgment of their receipt. Instead of phone calls, send emails or mail communications to the formal contact channels or the legal and registered domicile of your partner. Send emails to official business addresses under your partner’s formal website domain to ensure that the message arrived in the right place.

Giving proper notices at the right time and with the correct media is vital. You might need to analyze this situation and craft your messaging to partners with a multi-skill team, including commercial and legal experts. The following subjects should be the most critical priorities in your analyses:

• Global presence of your partner (the countries that your partner has a type of property)
• Governing law
• Dispute settlement
• Force majeure
• Termination
• Consequences of termination
• Terms of payment
• Delivery and Incoterms rule
• Price and currency
• Specifications of the goods
• Usual time of delivery

You should also consider several possible scenarios of how to proceed to resolve the challenge and do a full analysis of the pros and cons of each option.

2. Problem: Inaccurate description of goods

Parties do not usually describe the goods with as much detail as needed. The essential details that should be indicated in the contract of different products are not all the same. Buyers should define the exact details of the goods in an article or an attachment to the contract. Some companies may use qualitative expressions such as “standard, first-class, suitable, in a good state,” or others to describe goods.

Avoid using imprecise phrases and instead define each quality using measurable criteria.

You must decide which of the following items should be utilized for your particular product:

• HS code
• Packaging type
• Material
• Marking and labelling
• Weight
• Size
• Exact quantity of goods shipped
• Country of origin
• Product code
• Product analysis
• Standard type
• Year of production or crop year
• Performance
• Guaranteed figures

Solutions:

If you have not precisely defined the specifications of the goods in your contract, refer to your previous cargoes and send approved documents and notices to your partner to remind them of the quality standards.

You may also decide to employ an independent testing or inspection agency to evaluate the goods before shipment. For a list of credible companies, you can check  https://www.tic-council.org/.

3. Problem: Writing ambiguous obligations

A common problem in international contracts is writing commitments without sufficient clarity. When writing outstanding obligations, you should define these aspects of the duties:

• When should the obligation be fulfilled?
• What are the consequences of a delay?
• What are the consequences of non-performance (the obligation has not been met)?

Because the contract is written in good faith and an amicable situation, the parties usually do not clarify the above issues in the contract. SMEs are more vulnerable and should be more cautious with this subject. Imagine that an SME has ordered some products and paid a 15% advance payment. The balance should be paid within 90 days, and the delivery term is “FOB a port in departure”. Now, can anyone answer the following questions?

• When should the product be delivered?
• What if the seller delivers the product with delay?
• What happens if the seller does not deliver the product? What about the 15% advance payment?
• When should the 85% balance be paid? Ninety days is the period, but when is the commencement date of that period?
• What happens if the shipping company delays in getting delivery of the cargo?

Solutions:

Have your contracts investigated by a professional multi-skill team including a lawyer, a logistics expert, technicians, and a financial expert, and check for the aspects that need clarity.

Inform your supplier and redefine your agreements in writing. You might need to add an addendum or amendment to your contract. At least try to redefine and add transparency to the material conditions of your contract. These modifications should be in writing and signed by authorized officers of all parties.

Send some notices to your partner on letterhead to remind them of your customary and reasonable actions in previous transactions.

In case you agree to waive a default in the current situation, make it clear that this waiver will apply solely to that particular default and will not be a continuing waiver, nor will it excuse any later defaults.

If you are going to pay or have paid a considerable amount as an advance payment, and the product will not be delivered for a long time, you should request a receipt for the advance payment as proof it has been accepted by the partner. You might also need to ask your partner to provide you with a standby letter of credit or advance payment bank guarantee.

4. Problem: Writing conflicting conditions

You can find this problem in many contracts. This is usually because the contract text has been drafted by one individual who cannot analyze all four aspects (technical, financial, legal, and commercial) of an international business contract. Look at the following condition as an example:

• The delivery is on the base of “FOB port”
• The seller will deliver full set clean on board B/L, indicating freight prepaid

If the terms of delivery are on the base of FOB, the freight condition in B/L shall be “collect” and not “prepaid.” This is a conflicting condition and may cause disputes and require interpretation.

Solutions:

If you identify that your contract contains conflicting conditions, have it investigated by a professional multi-skill team.

To prevent major issues, write to your partner to solve the conflicting conditions quickly and prevent future problems. First, try to solve this type of problem through amicable communication. Write to your supplier and redefine your agreements in writing. You might need to add an addendum or amendment to your contract. At least try to redefine and add transparency to the material conditions of your contract.

Send proper notices to your partner on your letterhead to remind them of your customary course of action in previous transactions.

5. Problem: Unsuitable governing law and dispute settlement method

Try to select the rules of a third party country as the governing law. When you select the rules of your partner’s country, the possibility of fair settlement will decrease. You should also consult with local lawyers to investigate the effects of governing law on your contract. The next point is selecting the dispute settlement mechanism. Arbitration is one of the best methods for solving international commercial disputes.

Learn how to ensure your success in new markets by conducting proper research, selecting the most effective entry strategy and implementing it efficiently.

Solutions:

Consult with a professional law firm or expert to analyze this subject for the worst-case scenarios.

For future contracts, try to select the rules of a neutral state. Furthermore, the text of arbitration clause should at least include the following items:

• Scope of arbitration
• Type of arbitration
• Number of arbitrators
• Proceedings of arbitration
• Venue
• Costs
• Severability of the arbitration clause

What are the short-term measures that SMEs can take to reduce disputes and problems with their international suppliers?

• Avoid legal actions as the first step.
• Try to solve disputes via amicable or expert team negotiations.
• Make a written archive and write and sign all new agreements and modifications to your contract with your partner.
• Employ an independent testing or inspection agency to check the quantity, quality, and/or packaging of goods before shipment.
• After consultation with experienced lawyers, send official and informative notices to your partners regarding your agreements, expectations, and consequences for breach of conditions. In this step, avoid using aggressive and offensive tones.
• In case the price was fixed in your contract, do not accept the changes in price and consult with your legal team or law firm about “hardship” and/or “price revision conditions”.
• If you received a Force majeure notice or statement, immediately consult with your legal team or law firm. Judicial courts or arbitration centres do not accept some statements.
• Inform your supplier immediately if you face new rules, regulations, and restrictions in your national trade system.
• Study the standard international rules mentioned in your contract and analyze their effects on your agreement. Incoterms, UCP600, URDG758, URC522 are some samples.
• Look for new suppliers in case you are experiencing severe issues with your current supplier, but try your best to have a comprehensive, clearly written contract before starting your new relationship.
• Beware of scam suppliers on the net or on some B2B websites. If you find sources on the internet, verify their credit before engaging with them. It’s a good time for phishing.

From a business perspective, and global economic perspective, we are dealing with unprecedented and unpredictable times. It has never been more crucial to ensure we are all staying informed through credible sources. FITT has collected COVID-19 global business resources from world-leading organizations collected in one place. 

The post The 5 most common mistakes SMEs make in drafting purchase and sales contracts + solutions for SMEs during the COVID-19 crisis appeared first on Trade Ready.

We usually write contracts based on good faith and mutual understanding, but we read the contract just two times, once, when we sign it, and the second time, when we encounter a dispute.

The contract should help us settle our disputes cases where amicable negotiation does not work. Unfortunately, COVID-19 will increase trade disputes around the globe.

General effects of COVID-19 on international trade and supply chains

Coronavirus will continue to be a proximate cause for delay and non-delivery of goods and services from previous months to the next few months.

The delays in the supply chain are mainly because of:

• Factory shutdowns and production with low capacity
• Governmental prohibitions and restrictions on export and import
• Drastically increased prices for certain goods
• Transportation and logistics companies’ limitations; and
• Order cancellations by the customers

Companies have responsibility toward societies, employees, suppliers, and customers while still being profitable. This is an exceedingly difficult balance for business owners to handle all of these issues together.

Since the first main consequence of COVID-19 to businesses worldwide is delays in the supply chain, how will these delays effect international trade processes?

Delays in sales and purchase contract

COVID-19 seems to be a case of “Force Majeure”. Force Majeure generally means unavoidable, uncontrollable, and unforeseeable events. And much like some travel insurance providers, insurance companies have the ability to alter the dates around known and unknown hazards. This is why it is so important for companies to fully understand the details of their contracts and coverage.

When a party is encountered with a Force Majeure case, it should be deemed relieved of its duties and obligations, and, therefore, the contract may become suspended or, in some situations, terminated when the Force Majeure case endures over weeks and months, rather than a more limited time period.

Parties should have defined the consequences of termination and suspension in the contracts. What happens to advance payments, consignments, delays, and non-deliveries?

Some parties may abuse the current situation and increase the prices or not deliver the sold goods. In a situation where  a party claims that has encountered a Force Majeure, it is expected to mitigate the consequences, notify the counterparty, and provide proving documents indicating that its business is affected by the case.

Delays and Incoterms

Based on the EXW rule, the Seller is not responsible for export and import clearance, but the Seller is expected to deliver the product at the named place. In DDP rule, the Seller is responsible for both export and import clearance. In the other rules, the Seller is just accountable for export clearance. What happens if a government prohibits the exportation of a product, which is highly crucial for a supply chain in the Buyer’s country? What if the Seller is not able to deliver because of the factory shutdown?

Delays and cargo shipping insurance

If the delay is because of the seller’s activity and the product is not delivered to the shipping company or has not left the warehouse or place of storage that is named in the insurance policy, the underwriter or insurance company has no obligation because the insurance contract is not effective yet. See Section 8 Duration of the Maritime Cargo Clauses.

In case the delay occurs after starting the transportation, and such delay is the proximate cause of loss, it might not be covered by the insurer based on the Exclusions section.

Delays and international transport

Many international conventions govern carriage contracts, which are usually mentioned on the Bill of Lading. We can name Hague-Visby, Hamburg, Rotterdam (for marine transport), Warsaw and Guadalajara (for air transport), CMR, and Vienna convention (for road transport), COTIF and OTIF (for rail transport).

These conventions govern the transportation relations between the Shipper, Consignee, and Carrier. Each convention indicates unique responsibilities and liabilities for delay, and in most situations, carriers assume limited liability based on the weight or quantity of packages.

The important point that many companies neglect, is that the carriers’ liability is limited and not always equal to the actual value of the product in most situations.

There are too many articles in different conventions about delay and its consequences. This issue should be investigated based on the nature of the consignment, the governing convention, and the specific agreement of transportation. For example, in article 5.7, 6.1.b and 19.5 of Hamburg convention, it is mentioned:

5.7. Where fault or neglect on the part of the carrier, his servants or agents combines with another cause to produce loss, damage or delay in delivery the carrier is liable only to the extent that the loss, damage or delay in delivery is attributable to such fault or neglect, provided that the carrier proves the amount of the loss, damage or delay in delivery not attributable thereto.

6.1.b The limit of liability of the carriers for the delay in delivery, according to the provisions of article 5, is limited to an amount equivalent to two and a half times the freight payable for the goods delayed, but not exceeding the total freight payable under the contract of carriage of goods by sea.

19.5 No compensation shall be payable for loss resulting from delay in delivery unless a notice has been given in writing to the carrier within 60 consecutive days after the day when the goods were handed over to the consignee.

In some situations, like bulk cargoes and charter contracts, the delay may occur due to quarantine regulations at departure and destination. This issue may cause demurrage charges in charter contracts when the carrier has properly issued the NOR (Notice of Readiness), and the port authorities may not allow berthing.

In case the laytime is over a certain period, the importer may be liable for demurrage and any related charges. The details of the demurrage and dispatch (DEM/DES) article of the charter contract are essential for analyzing this issue. We should also pay attention to the 4W acronyms in the DEM/DES article (WIPON, WIBON, WIFPON, WICCON).

Delays and international payment

Based on Incoterms 2020, the first primary obligation of the buyer is the payment of the price as provided in the contract of sale. Considering the current situation, delay in payment may happen because of problems on the Buyers’ end, banks working days, country of origin or limitations in governmental departments.

The payment terms article in the sales agreement and Force Majeure should be accurately analysed and investigated.

Delay and customs clearance

Governments and customs administrations may take special measures for health and sanitary controls at the border. This issue may be more affected by the country of origin and departure. On the one hand, the controls may decrease to make the delivery process faster for some necessary products, such as food and produce. On the other hand, some products may get stuck at the border for customs care for necessary products. Therefore, warehousing charges in border/port holding facilities and freight surcharges may increase.

Customs administrations and other government departments may start to request health or quarantine certificates for the products that has never previously required this type of documentation. In some bulk cargoes, fumigation, health, sanitary, and phytosanitary certificates may be added to necessary shipment documents.

Resources and advisors who can help

We are experiencing a Force Majeure and emergency for all players in the supply chain, especially for exporters and importers. The first and most applicable solution is mutual understanding of exact and on-time coordination of shipping and delivery.

Understandably, companies try to make a profit for their owners and shareholders while respecting the interests of society, employees, suppliers, and customers.

For a while, the goal of business owners should change from singularly making a profit to broader social purposes such as survival.

And higher levels of mutual understanding should be established between importers and exporters to avoid disputes. More prominent companies are expected to protect their suppliers and customers as much as possible.

We interact based on the good faith principle, but business owners should be prepared for disputes. Consultation and cooperation with professional teams in the following areas help to mitigate the effect of this specific situation:

Government trade agencies

These experts can provide insight and advice on the ever-changing landscape regarding any country restrictions/bans.

In house legal, trade, and finance compliance team

This team is responsible for taking protective measures and foreseeing probable issues in the company’s supply chain.

Insurance companies

Consult with your insurer and check for all the solutions they may offer you. It’s not just about cargo transportation insurance.

Transport and shipping companies

Transport companies do not necessarily have control over the process. Most of them are a type of intermediary. Study your contracts carefully and consult with your shipping company for the right time, route, and shipping details such as stuffing, packaging, and documentation.

Banks and Financial institutions

Consult with your bank’s experts. When we encounter discrepancy in a documentary credit, the applicant (Buyer) and banks may treat it on an approval or collection basis. In some situations, there are national restricting rules by central banks or other government departments in which the buyer is not permitted to approve the discrepancy. In other words, the buyer may decide to accept delays or other discrepancies, but the governmental organizations do not respect such a decision.

Get a customs broker to help with customs clearance process

The final and most important governmental physical controls on the product happens during the customs clearance process. Companies should hire professional, experienced, and knowledgeable customs brokers.

The first contact with the customs broker should be before finalizing the order, and brokers should search and transmit the most updated information to their customers. This information includes rules and regulations about prohibitions, quotas, documents, HS codes, valuation, and in one phrase, comprehensive trade compliance.

Customs brokers are expected to act proactively and inform traders about the most recent decisions of governmental departments. As a customer, companies deserve to have dedicated teams to support their business and products which are responsive to the unique needs and questions whenever required.

24/7 service is crucial because of time differences between countries and customer service expectations.

Most companies love win-win cooperation, but we might not win too much in the current situation. Survive-survive is a more reasonable and logical strategy for some businesses these days. Those companies who like to gain more by employing the Win-lose strategy will be accused by society for neglecting social and corporate responsibilities. It’s not a good time to pursue profit over social well-being.

It is a good time to position your company as a pioneer in respecting human values.

Sources:

https://iccwbo.org/

https://www.admiraltylaw.com/statutes/hamburg.php

https://www.letterofcredit.biz/index.php/2018/10/05/mt-700-swift-message-field-specifications/

https://www.marrisk.com/pdf/clauses/INSTITUTE%20CARGO%20CLAUSES.pdf

The post Guide: How COVID-19 delays could affect your supply chain from contracts to insurance and custom clearance appeared first on Trade Ready.

As the rate of technological development zooms ahead, and global value chains evolve, companies will need to be ready to open their eyes and minds to the possibilities of new processes and the skills that go with them.

Here, we are predicting the top 8 ways supply chain management will be different in 2018, and how you can keep up.

Check out Part 1 in this series to see the first 4 changes we have forecast in the year ahead.

Read on for 5-8.

5. Self-driving fleets will move from testing to implementation

Recently Tesla has been making headlines with the reveal of their Tesla Semi – the electric car company’s first foray into transport trucks. While there is no clear date for the roll out of the trucks, equipped with advanced autopilot, orders have already started pouring in from big names including Pepsi Co, UPS and Walmart.

Companies that invest in the electric fleets should see a cost savings of 20% over a standard diesel truck, according to Tesla CEO Elon Musk.

Tesla won’t be the first to put a “robotruck” on the road. Daimler’s Freightliner division began testing out its autonomous tractor-trailer in Nevada back in 2015.

But with significant regulatory hurdles, will this new type of vehicle really take off in 2018? The momentum is certainly building, and with good reason. The benefits of autonomous trucks are plenty, and the need to address a rapidly growing demand and diminishing workforce are driving the adoption of the vehicles among the industry’s major players. According to Wired, the trucking industry is now short 50,000 drivers, and as current drivers retire that number could reach as high as 175,000 by 2024.

According to the New York Times, in 2017, companies and investors are on pace to invest $1 billion into self-driving and other trucking technologies – a tenfold increase over 3 years ago. That number is set to increase exponentially over the next few years. Companies of all sizes, including small start-ups are joining Google, Uber and Tesla in developing and testing their own autonomous trucks.

Silicon Valley start-up Embark have partnered with Frigidaire, and have been hauling their refrigerators 650 miles down the I-10 freeway using their robotrucks since October. For now, all automated trips are being supervised by a driver, but Max Fuller, executive chairman of trucking giant U.S. Xpress, has stated that he expects to see Level 4 autonomous vehicles (those that can fully operate without a driver present) to be hitting the roads within in three to four years.

6. Last mile delivery gets disrupted by sharing economy

Thanks to ecommerce pioneers such as Amazon, consumers now expect and demand ever greater control over the delivery of their purchases. Same day delivery has become a reality in major cities all over the world. In order to compete, retailers must now embed logistics into the customer experience from the very beginning.

Lessons learned from the hospitality, staffing, and mobility sectors provide successful examples of how to use sharing across all parts of the logistics value chain. There are infinite ways this can and will transfer over to other parts of the supply chain industry.

Oft-cited giant of the sharing economy, Uber, has taken their ride-sharing service a step further with “UberRUSH”, using GPS enabled apps to connect drivers to ecommerce customers in real time for fast, last-mile delivery. It integrates with ecommerce platforms like Shopify and Bigcommerce.

In urban centres, urban discreet warehousing can enable companies to become more agile in delivering goods on demand.

Logistics providers will need to learn to adopt capacity sharing platforms to remain competitive – or risk losing out to niche companies providing this as a specialty.

The sharing economy also presents new options for businesses to improve efficiency and productivity within their own organization with on-demand staffing (think TaskRabbit, Fiverr and Upwork).

The sharing economy provides endless opportunities for companies of all sizes, and after a few years of proven successes, 2018 will be the year it really explodes into supply chain management.

7. ‘Amazon effect’ moves into industrial manufacturing, high tech and more

Several times a year Amazon makes new announcements about how they are further revolutionizing ecommerce and delivery. The bar continues to be effectively raised and Amazon has become a model to innovative companies who recognize that they must “evolve or die”.

Though it may seem a daunting prospect, omni-channel logistics companies will be looking to rise to the occasion and compete with Amazon head on.

And in order to do that they will have to get on board with some of the best tech tools being developed for business today.

Real-time data collection is now a reality with the adoption of business-ready IoT. Companies that are able to leverage the data they are collecting can better service their customers by not only meeting their needs but anticipating them, and providing convenience through omni-channel ordering from any device.

Now that customers are able to order from anywhere, anytime, the same expectations are raised for delivery. One technology allowing companies to better meet these raised expectations is 3D printing. We talked about 3D printers in our #TradeElite Twitter chat at the end of 2016, and since then the technology has continued to gain momentum in adoption, allowing companies to react quickly to changing customer demands by producing parts in house, as needed.

As mentioned in Part 1 of this article series, AI will also empower companies to become more agile, fast and cost-effective in this post-Amazon era of global logistics. With the adoption of these new technologies into supply chain processes anything is possible.

8. Climate change will increasingly disrupt supply chains

Debate it all you want, but the science is in on climate change. And this global reality is adding risk and complexity to international supply chains. The increasing frequency of extreme weather conditions will continue to disrupt transportation, availability of raw materials and labour.

In the last two decades associated costs from supply chain disruption due to extreme weather events has grown staggeringly, averaging tens of billions of dollars per year.

Particularly susceptible commodities include agriculture products and oil & gas, but all transportable goods will be at increased risk of weather-related supply chain disruptions in 2018. Businesses need to be prepared to weather these storms. Building more resilient supply chains with built in safeguards is no longer an option. Companies can do this by diversifying their supply chain with alternative suppliers to lessen the impact from one disrupted vendor, or suppliers concentrated in one region.

In contingency plans, supply chain managers should also look at different transportation options and determine how goods would travel if one method of transport was disrupted. Having backup routes and transport options available at the ready will allow companies to act fast in the case of disruption and reduce the financial and consumer impacts.

We would be remiss to talk about the effects of climate change without mentioning the efforts being made to reduce them. Joining big names such as Unilever, Procter & Gamble, PepsiCo and General Mills in incorporating sustainable practices in your supply chain can save you money on packaging, waste and logistics and reduce your company’s impact on the environment.

That will look good on your ledger and your global reputation in 2018.

The post 8 Ways Supply Chain Management will change in 2018 (Part 2/2) appeared first on Trade Ready.