Five Critical Steps for Supply Chain Management

Exporting creates many opportunities for American manufacturers, producers, and distributors in all industry verticals. Through the COVID-19 Pandemic of the past three years, exports from the United States faced many challenges including delays, cost increases, and uncertainty. This included limited access for outbound freight, increases in trucking, ocean, air, and drayage costs, and limited access to required equipment including containers, trucks, and drivers. Procurement, customer service, and business development efforts were continually stymied.

All of the above led to uncertainty, which impacted the decision-making process and caused disruption in demand planning, shipping schedules, and overall performance in global supply chain operations. But, for many industries, exports grew through the pandemic for U.S. companies due to:

• The U.S. transportation structure, manufacturing, agricultural, and distribution capabilities were less impacted than in other countries which allowed U.S. companies to continue to fulfill the need for foreign sales.
• The U.S.’ ability to offer credit terms when the world was teetering on financial disaster. 
• The U.S.’ ability to provide products with high degrees of quality control, value add, and consistent performance was an advantage over exporters from other global markets.
• The U.S. customer service is second to none on a global basis. Certain companies value those credentials and are willing to pay for that benefit.

Blue Tiger International, an Export Management Company in New York, sees significant opportunities for companies here in the United States, but with that opportunity comes risk. The goal is to manage the risks by maximizing the odds of success. Strategies must be created that continually offer value adds and differentiation, while also factoring in due diligence.

Blue Tiger recommends 5 Critical Steps to accomplish “Best Practices in Exporting.”

1. Marketing is a critical first step:

You need to first make sure your product has marketability overseas and then, determine which markets are best for the product. This is followed by differentiation, supply chain solutions, and pricing assessments. It is recommended to choose markets where you were able to find customers, retailers, and distributors who value your product, customer service, and pricing structure. You need to be:

• Patient in this process
• Diligent in vetting
• Cautiously accept small amounts of risk

Most companies Blue Tiger has worked with apply a carefully strategized marketing approach which significantly increases their odds of export sales. The U.S. Commercial Service is an excellent resource for exporters in creating a successful marketing strategy, including the RAISE reports that help rural exporters with in-depth country and potential partner identification.

2. Pay attention to detail:

When exporting you need to pay attention to numerous areas including documentation, Incoterms, regulations (both export & import), packing, marking, and labeling issues. Incoterms play a very critical role in both import and export trade as they define a point in time and trade where responsibility and cost transfer between the seller and buyer.

You need to dot the “I’s” and cross the “T’s” on all matters within the export process. The consequences when problems occur can be significant and costly. It is a much better idea to be detailed oriented to proactively avoid problems and increase the opportunity for successful exports.

3. Align with a quality service provider:

Finding freight forwarders that can support the shipping of your product overseas is an extension of your supply chain and customer service capabilities. Delivering freight on time, in sound condition, and cost-effectively is an aspect of export sales. Blue Tiger International, the export consultant for numerous exporters and associations, maintains a dossier of service providers/freight forwarders and can be an excellent referral source for exporters.

Export Management Companies provide many services including experienced professionals on staff, freight pricing, technology capabilities, credit terms, carrier relationships, and a network of foreign relationships.

4. Develop robust resources:

Exporting successfully requires access to numerous support services and resources. The USDOC’s International Trade Administration is an excellent resource in several ways:

• Export assistance specialists in over 70 U.S. cities and in 80 international markets
• Country desk officers in Washington, D.C., and in major cities in most U.S. trading partners
• Industry analysts for major US industries 
• Market research analysis with the Rural Export Center and RAISE Research reports
• A connection to local District Export Councils which provide mentoring, advocacy, and training

5. Pay attention to trade compliance potential issues:

Exporters need to pay attention to export regulations to comply responsibly and avoid delays, fines, and potential financial consequences. Areas such as but not limited to Schedule B Classification (HTSUS), record keeping, documentation accuracy, Denied Parties checking, and unauthorized export sales all need to be managed diligently and with reasonable care. 

There are areas of the world, specific companies and individuals, and some products that have significant restrictions limiting or denying export sales. You must have procedures and resources in place to prevent these types of export sales from occurring. Additionally, some exports will require permission to export where E-export licenses may be required.

U.S. Customs and Border Protection, the Departments of Commerce, State, and Treasury all have regulations governing export activity, along with a host of other government agencies such as but not limited to the U.S. Department of Agriculture, Food and Drug Administration, Centers for Disease Control and Prevention, Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Energy, etc. We also recommend that all exporters, as well as importers, consider joining the Customs (CBP) Program … Customs-Trade Partnership Against Terrorism that will raise the level of your compliance and security profile to the government and be an excellent “Best Practice.”

Summary

Exporting when done right can be a critical ingredient to any business model. Developing resources and skill sets are necessary to do it right.

A good resource: Blue Tiger International stands ready to work with any of the companies associated with the U.S. Commercial Service who seek assistance in their export business model.

Contact: Thomas Cook, tomcook@bluetigerintl.com, 516-359-6232