So, it’s not surprising that Canada, Mexico, and the United States are among each other’s top trade partners. Canada and Mexico have been one of the top three merchandise export markets for 49 states in the United States, the U.S. Chamber of Commerce reports.

“Cross-border trade with respect to Mexico, the United States, and Canada is more relevant than it ever has been. We have a stable geopolitical environment, free trade, and half a billion people between the three countries,” says David Cox, chief executive officer of Polaris Transportation Group, a provider of less-than-truckload (LTL) service between Canada and the United States, and other services. Each of the countries also boasts an educated workforce, making cross-border trade even more efficient, Cox says.

The focus on business opportunities within North America has grown over the past few years. “After 2008, we saw a lot of companies open up shop across the world, but predominantly Asia,” says Andreea Crisan, president and chief executive officer with ANDY, a provider of transportation and supply chain solutions, based in St-Laurent, Quebec.

For example, annual foreign direct investment (FDI) into China grew from around $40 billion in 2000 to $124 billion in 2011, and then growth rates dropped. In 2022, FDI into China hit about $189 billion—a massive number, but up just 4.5% from the previous year.

Rising costs for shipping, labor, and other expenses, along with the push for sustainability, have prompted companies to consider a wider range of countries when locating operations. Many organizations based in North America are assessing opportunities closer to home.

“It’s a natural transition, given all that’s going on, to come back on to the North American continent,” says Crisan. It’s also good for the planet to manufacture closer to the market for a company’s products, cutting the distance items have to be transported, she adds.

A growing number of U.S. companies are turning to nearshoring, typically in Mexico, for greater visibility, shorter delivery times, and a greater ability to influence the quality of their products, says Jose Minarro, managing director with Sunset Transportation’s Cross-Border Operations.

Mexico’s proximity to the United States, its availability of skilled labor, competitive labor costs, favorable trade conditions, and tax exemptions make it attractive for manufacturing, he adds.

The shorter transportation times are especially significant for products that are seasonal and/or time sensitive, like fashion items, says Jerry Haar, professor of international business at Florida International University. In addition, by shifting some operations from other parts of the world to Mexico, companies diversify their supply chains, lowering risk, he adds.

Boosting Nearshoring Benefits

Trade agreements between Canada, Mexico, and the United States further boost the benefits of nearshoring and cross-border trade. The most prominent, the United States Mexico-Canada Agreement (USMCA) went into effect July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). The USMCA contributes significantly to stability in rules and norms, reducing the risk to trading and investing across North America, Haar says.

The USMCA allows for a wide variety of duty-free items that can be exchanged among the United States and Mexico, Minarro says. An added benefit: Many manufacturing companies that set up shop in Mexico end up selling a portion of their production into the domestic market of approximately 130 million people, he says.

Surging Trade

“Since the inception of USMCA, trade throughout North America has experienced a surge, accompanied by a substantial uptick in investment within industries capitalizing on this opportunity,” says Rachel Honbarger, project manager with Tompkins Solutions, a provider of supply chain solutions.

In 2022, exports of U.S. goods with the USMCA were $680.8 billion, up 16% from 2021 and a 34% jump from 2012, according to the Office of the United States Trade Representative. Imports of goods through the USMCA also grew, rising 20.5% between 2021 and 2022, to total $891.3 billion.

Cross-border trade and nearshoring within North America offers companies based in Canada, Mexico, and the United States greater opportunity for profit and growth. At the same time, companies need to consider potential risks.

One is potential changes to trade agreements or policies. Even minor adjustments can profoundly affect the functionality or expenses associated with operating such a supply chain.

An example is recent efforts by some policymakers to amend aspects of Section 321, which allows many imported items to enter the United States free of duties and taxes, so long as the aggregate retail value of the products imported in one day and exempted from the payment doesn’t top $800. A slight modification to the scope of duty-free exemptions could lead to substantial shipping expenses, making nearshore distribution economically unviable, Honbarger says.

In addition, locating manufacturing operations across the border from distribution networks increases transportation expenses due to tariffs, longer travel distances, and a rise in shipment volumes to compensate for extended travel times.

Pulling Off Cross-Border Operations

Executing a cross-border operation requires complex technological integration to ensure seamless oversight and control of the entire supply chain process.

Without this, businesses face potential product loss, challenges in restocking distribution centers or meeting customer demands, and expenses stemming from inadequate visibility into operations.

Achieving the benefits of cross-border trade and nearshoring within North America—including increased profit and accelerated growth—demands an in-depth knowledge of the relevant regulations and documentation requirements to minimize the risk that shipments are held up by the authorities.

Working with a logistics provider with expertise and a commitment to this trade area is essential. “We’re in a 24-hour industry,” Cox says. Partnering with a quality broker that can support its clients around the clock cuts the chance of border mistakes and delays, he adds.

These providers can help shippers navigate trade across North America.

ANDY: High Standards and Customized Services

Supply chain solutions provider ANDY is well equipped to manage cross-border shipments, relying on its experience and expertise on the processes and requirements.

From its start with a single, burgundy-colored delivery truck, ANDY has grown into one of the 250 largest fleets in North America, as well as one of the fastest growing companies in Canada.

It also holds the distinction of being one of a handful of women-owned companies in the supply chain and transportation sector. “We try to empower women and place them in pivotal roles where they’re decision makers,” Crisan says.

At the same time, the men who are part of ANDY also contribute to its success. “Great men work here as well,” Crisan says. “It’s a diverse place. Our success boils down to our company culture.”

The culture has helped fuel ANDY’s tremendous growth since its start in 2001. That’s when Crisan and her father, Ilie Crisan, emigrated from Romania to Canada. A former bus driver, the older Crisan tried to find a job as a truck driver in Canada but was unable to. With savings running low, he purchased his own truck and got to work. “That’s how it started,” Crisan says.

Then 11 years old, Andreea Crisan has been key to ANDY’s growth. Among other responsibilities, she helped her father translate documents. “I grew in parallel with the company and so did my responsibilities,” she says.

ANDY now operates out of 15 locations across Canada, including eight terminals that are CTPAT and PIP certified, as well as a fleet of about 300 trucks and 800 trailers.

Its clients range from industrial and natural resource firms to retailers and manufacturers, and they can choose from drayage, transportation, logistics, distribution, and warehousing, and other transportation and logistics services.

Shippers also can choose from flatbeds, less-than-truckload and full truckload, and dedicated transport, among other options, as well as brokerage, warehousing, cross-docking, and other services. “We can act like a one-stop shop,” Crisan says. All trucks are outfitted with live tracking technology, providing clients with visibility into the movement of their shipments. They also can assess performance through reporting and analysis.

Building Cross-border Expertise

Since its earliest days as a company, ANDY has been handling cross-border shipments. “We’re experts on the processes and requirements, and well equipped to manage cross-border shipments, so there are no delays,” she says.

Because of its commitment and responsiveness to its clients, ANDY earned all the transportation business of one of its clients, in a dedicated contract arrangement. “We’ve become this company’s outsourced, dedicated private fleet,” Crisan says. For this company, ANDY provides planning, cross-docking, and daily deliveries and other services.

It’s an important and challenging role, and ANDY is more than up to the task. Because the client ships every day, its customers can place orders until late afternoon, and be confident their products will be shipped the next day.

“That’s our client’s promise to its customers, and our partnership makes us a very integral part of that promise,” Crisan says. Through the dedicated contract arrangement, the client gains quality service, predictability, and cost savings, she adds.

To achieve these benefits, ANDY worked with the company to truly understand its needs, and then tailored its services to meet them. “It’s a true partnership, and we’re working together to provide the services that can help our client achieve its objectives,” Crisan says.

Polaris Transportation Group: Customer-Focused Logistics Specialists

Along with its cross-border service, Polaris Transportation Group offers third-party logistics, warehousing, distribution, and supply chain management services.

Over the past three decades Polaris, one of the largest privately held Canadian LTL carriers, has moved 6 million shipments between Canada and the United States. “At Polaris, our principal activity is quick, transparent, cross-border transportation,” Cox says.

To ensure it can continue providing this, Polaris has cultivated an in-depth understanding of customs regulations, as well as strong relationships with customs and border protection agencies in both Canada and the United States, Cox says.

He and his team also have been very deliberate in investing in technologies that enable Polaris’ clients to work in a digitally transparent fashion.

Polaris ships a range of commodities, with a specialization in dry goods and high-value products. It also works in all transport modes. Along with its cross-border service, Polaris offers third-party logistics, warehousing, distribution, and supply chain management services.

Customers come in all sizes. “Smaller companies may move a handful of shipments a month, but those shipments impact their business, their well-being, and their reputation. I am equally in love with those businesses as much as I am the larger ones,” Cox says.

Four companies make up Polaris; three are Polaris Transport, Polaris Global Logistics, and Polaris Commercial Warehousing. In 2019, with the launch of NorthStar Digital Solutions—the fourth Polaris company—the head office housed a state-of-the-art digital lab. Among other initiatives, NorthStar Digital Solutions has explored artificial intelligence and machine learning, enabling it to continue searching for efficiencies within its processes.

Making Strategic Investments in Technology and Workforce

Polaris has also invested in robotic processing automation, artificial intelligence, and blockchain. By deploying a mobile driver application (FR8Focus) and integrating it into their TMS, clients can check the location of their freight through the customer portal in real-time.

“Everyone wants to know where their shipments are. This needs to be transparent,” Cox says. That holds true even when Polaris is working with supply chain partners, such as other carriers. “It’s seamless, transparent, and digital,” Cox says.

The use of systems like intelligent document workflow for order entry, accounts payables, and other functions, offers a “wealth of insight that enables the Polaris team to focus on managing complex situations,” Cox says.

Polaris operates a consolidation program for several U.S.-based clients that are shipping products to Canada from various regions within the United States. For this program, Polaris directs the companies’ shipments to a hub in the central United States, and then transports the cargo across the border on a single trailer.

“Shippers gain savings and certainty,” Cox says. They can be confident of the date their inventory or merchandise will arrive in Canada. This is harder to predict when products move in a piecemeal fashion.

Along with technology, Cox has been deliberate about searching for top employees, implementing best-in-class processes, and making sustainability a foundation of Polaris. “Whether it’s the environment or the social issues that affect business and the communities we’re working within—these are important to me as a business owner,” he says.

Sunset Transportation: Family Roots and Global Reach

Sunset Transportation offers all the services shippers need to conduct cross-border trade, from import/export transportation management to warehousing and transloading services.

The employee roster at Sunset Transportation includes a farmer, an Emmy winner, an Arabic speaker, a hometown pageant queen, and an amateur tractor pull competitor, along with several military veterans. The range of interests and experience among Sunsetters, as the employees are known, mirrors the broad roster of transportation and logistics services Sunset offers.

Sunset Transportation was founded in 1989 by Jim Williams. However, Sunset traces its start to 1861, when Jim Williams’ grandfather opened Williams Paper Company, which remains in operation today. Williams Paper Co. expanded its operations in 1970, when Jim Williams began managing the business’s fleet of trucks and established a thriving backhaul program.

In 1989, Sunset Transportation launched. In 2022, Sunset joined Armada Supply Chain Solutions, a food and restaurant logistics company.

For companies looking to do business between the United States and Canada, Sunset offers transportation services in all 10 Canadian provinces. It also provides import/export transportation management, truckload and LTL service, international export and import management, customs filing and management, financial support of goods and services tax (GST), and warehousing and transloading services. “We offer everything you need for cross-border trade,” Minarro says.

Working Between Mexico and the United States

Sunset also provides expertise and services for companies looking to trade between Mexico and the United States.

To help clients streamline their supply chains, Sunset takes a strategic approach to mapping their flows for inbound and outbound shipments, analyzing historical shipping data to identify sustainable opportunities to optimize freight, enhance service, save money, and improve technology. Using this insight, the Sunset team then presents a cross-border logistics solution that incorporates all the services needed for a streamlined supply chain.

In 2019, Sunset added a branch office in Laredo, Texas, offering cross-border logistics and border warehouse solutions. This was bolstered in 2021 with the opening of a cross-border office in Querétaro, Mexico, which includes an airport customs office, as well as a sales office.

Today, Sunset Transportation offers a range of services, including expedited freight, cross-border and customs solutions, international logistics, logistics management, and domestic, Mexico, and drayage carrier solutions. It also provides a comprehensive line of customs, warehouse, and freight brokers.

As important, Sunset internally handles every link of its supply chain services. “We don’t outsource customs and compliance functions,” Minarro says.

With CTPAT-certified warehouses in Laredo and Nuevo Laredo, Sunset can offer shippers solutions that keep them CTPAT-compliant from a warehousing and transloading perspective.

Sunset Transportation continues to innovate and adapt. Over the past three years, the company has collaborated with companies from Europe, Asia, and North America that are looking to establish new operations in Mexico. “Different industries, but all have the same goal: choose the best location within Mexico to manufacture a finished product or sub assembly that will be shipped into the United States,” Minarro says.

The Sunset team interacts with the customers from the planning stage onward and takes a holistic approach with every engagement.

“The deliverable at the end of the process is to provide suggestions on how to set up the logistics strategy, incorporating import and exports flows, technological requirements, and process automation,” Minarro says. “We listen to our customers and their needs, in addition to listening to the market, so we can provide the best, most efficient, and tailored solutions for our customers.”

Here are four sets of rules and regulations likely to make some of the biggest impact on supply chains in 2024.

1. Uyghur Forced Labor Prevention Act

Under the Uyghur Forced Labor Prevention Act (UFLPA), which U.S. Customs and Border Protection (CBP) started to enforce in 2022, companies may not import into the United States any products with content made by forced labor in China’s Xinjiang province, or products sourced from companies with links to forced labor there.

While the UFLPA is about two years old, CBP keeps expanding its list of companies associated with forced labor, and it keeps sharpening its focus on certain products.

“Going into 2024, I see more fixation on the different sectors within electronics,” says Jamie Wallisch, regulatory and sustainability expert at Assent, an Ottawa-based global firm that helps manufacturers use data to comply with supply chain regulations.

When a company imports a product with materials that CBP considers high risk, the importer must prove that the product doesn’t involve forced labor.

“It’s called rebuttable presumption; it’s like guilty until proven innocent,” says Jerry Peck, vice president of product strategy at QAD, a supply chain solutions provider based in California.

High-risk products include: items that contain certain industrial metals; clothing and apparel; industrial and consumer electronics; automotive parts; and construction and building materials, among others, according to a document published by QAD. And just because a supplier isn’t based in Xiangjiang, or anywhere at all in China, doesn’t mean the import is safe.

“Transshipments come out of China, and go into Malaysia, Thailand, and other countries where they produce the finished goods,” says Peck. Shipments from those countries could also draw scrutiny.

If CBP detains a shipment and the importer can’t prove that it complies with the UFLPA, the government can seize the goods. Even if CBP ultimately clears the import, a shipper that can’t make its case quickly will suffer.

“It’s costly for companies, every single day, to hold their goods until they’re able to provide that evidence,” Wallisch says.

A company needs to lay the groundwork for UFLPA compliance long before goods go on the water.

“First, become educated on what the forced labor requirements are,” suggests Peck. “Then include those as part of your corporate ESG [environmental, social, and corporate governance] program.”

Next, analyze overseas suppliers and their products to determine which ones might pose a risk under UFLPA. When you identify such a product, you need to trace it back to its raw materials, gathering proof that there’s no forced labor in the supply chain.

“You have to assume that your shipment will be selected for detention and have that rebuttable evidence prepared in advance of the importation,” Peck says.

Some of the evidence may come from publicly-available sources such as news articles, reports from non-governmental organizations, and corporate tax records. A shipper should also press suppliers for information: “How are they dealing with concepts of forced labor? What is their process for validating or onboarding their tier one and tier two suppliers?” Peck says.

Assent monitors publicly-available information on behalf of customers, and it administers a survey called the Slavery and Trafficking Risk Template to gather information from vendors.

QAD, through its supplier relationship management solution, also helps importers administer questionnaires. “You have to vet your suppliers and their supply chain—everyone who’s touching those goods,” Peck says.

2. European Union Deforestation Regulation

To facilitate compliance with the EUDR, Source Intelligence offers software that identifies risks to ensure suppliers, parts, and products meet core compliance obligations and uncovers possible exposure to suppliers engaged in human rights violations.

Manufacturers, distributors, and retailers that operate in the European Union will soon have to prove that their products aren’t complicit in stripping the world of trees. The European Union Deforestation Regulation (EUDR) takes effect at the end of 2024 for large companies and in June 2025 for small and mid-sized ones.

The EUDR covers seven commodities—timber, beef, palm oil, soy, coffee, cocoa, and rubber—plus certain products derived from those commodities, such as leather, chocolate, and furniture.

Any company that sells a product covered by the regulation will need to: gather information on that product; assess the risk that it has contributed to deforestation; take steps to mitigate that risk; and place a statement about these efforts in an information system developed by the European Union.

The information a company collects must first show that the commodity was sourced legally, and that it doesn’t involve any human rights violations.

“The second part is to obtain geolocations for where your commodity was grown or harvested,” says Charles Getter, sustainability consultant at Source Intelligence, a San Diego-based firm whose software and services help supply chains comply with government regulations. “You need to be certain that that particular plot of land had not been subject to deforestation.”

Responsibility to comply with the EUDR runs up and down the supply chain. But, luckily, the law doesn’t force each trading partner to perform due diligence from scratch if another supplier has already completed that function.

For example, a supermarket chain whose products include thousands of packaged foods made with soy can check to see if food processors or distributors have already performed due diligence on those products. “If so, you can just quote the reference number associated with that statement,” Getter says.

To prepare for the EUDR, first determine whether you already use a due diligence management system to comply with other government rules, such as the EU Timber Regulation. If you don’t have such a system, start planning to implement one, and start gathering data to populate the system. “You might discover that you don’t exactly know where a lot of your products are coming from, or the legality around your products,” Getter says.

In addition, study the EUDR, particularly Annex I of the regulation, which lists the Harmonized Tariff Schedule (HTS) code of all commodities the law covers.

It’s also important to pinpoint exactly where products were produced—where the soybeans were grown, for example, or the cattle grazed. Source Intelligence uses these geolocations, plus high-resolution satellite imagery provided by the EU, to look for signs of deforestation.

“We can check for conversion of forest to agricultural land by applying designations to satellite imagery and mapping land use,” Getter says.

Thanks to its automated processes, Source Intelligence can quickly conduct due diligence and risk assessment for products that originate in hundreds of locations. “We can check commodities and the legality around them, and get almost instant verdicts on whether or not deforestation was detected on that plot.”

3. Drug Supply Chain Security Act

The final phase of the Drug Supply Chain Security Act stipulates that pharmaceutical products in the United States must be electronically traceable at all times in the future, not only at batch level but also at package level. (Photo: ©Arvato)

Since 2013, the Drug Supply Chain Security Act (DSCA) has required all parties from manufacturers to pharmacists to track and trace prescription drugs and certain prescription medical devices throughout the entire supply chain.

Currently, companies can use paper-based systems and capture data on products at the lot level. But starting in November 2024, they will need to use electronic systems to collect, store, and share their data, and each product will need to carry a unique serial number at the lowest unit of sale.

Congress designed the DSCA to prevent drug counterfeiting and theft and to make it easier to recall drugs when necessary.

“It allows the supply chain to have visibility of a drug as it moves throughout the supply chain,” says Andre Caprio, director of business development, pharmaceutical and health care at Covectra, a company in Westborough, Massachusetts that provides serialization, tracking, and tracing solutions.

When the new requirements take effect, each case, vial, or other sellable unit will carry a two-dimensional barcode with data such as the product’s name and dosage, a lot number, expiration date, and a unique serial number.

Each entity in the supply chain must capture that data and store it for at least six years. Say, for example, that manufacturer Pfizer ships a product to a distributor. “Pfizer sends an electronic file that says, ‘I’m shipping 10 units of this particular product. Here are the serial numbers,” Caprio says. Receiving the product and data, the distributor verifies that they match.

“As they push that product downstream, they need to send the same information to the downstream partner, which needs to receive and store that data as well,” he adds.

Most companies in the drug supply chain are still working to comply with the new requirements, Caprio says. One key step is to implement a DSCSA compliance technology solution from Covectra or another provider. The company also needs to collaborate with its suppliers and customers, creating links that will allow them to share data.

Even before choosing a solution, a company should reach out to the Healthcare Distribution Alliance (HDA), an industry organization that includes panels for pharmacies as well as distributors. “The HDA is the best neutral resource for a company to get insight on DSCSA,” says Caprio. Companies may also get valuable advice from peer organizations.

4. SEC Climate Disclosure

Since March 2022, the U.S. Securities and Exchange Commission (SEC) has been preparing to release a new set of rules that will require publicly traded companies to report how they are managing their climate risk, and also report on their greenhouse gas emissions. While the plan could face further delay, the SEC expects to release the new rules in April 2024.

Once that happens, companies will have between one and three years to comply, depending on what’s known as their “filer status” at the SEC, says Deon Glaser, senior vice president of sustainability, social impact and ESG at The Uplift Agency, a social impact and sustainability services firm based in Detroit.

The main point of the rules is to give investors information they can use to assess, for example, how climate-driven events such as floods or wildfires might affect a company’s operations, or how much carbon the company releases through its activities.

“Investors have demanded that companies report this information,” says Mark Mellen, industry principal, ESG at Workiva, a company in Ames, Iowa that provides a cloud-based compliance reporting platform. “They want the same caliber of disclosure from organizations that they see for financial statements.”

The proposed rule divides greenhouse gas emissions into three categories:

• Scope 1: Direct emissions, such as the carbon released in a manufacturing process.
• Scope 2: Indirect emissions from purchased services such as electricity, heat, and cooling.
• Scope 3: All other emissions linked to the company’s activities, including its supply chain.

It’s not yet clear whether the SEC will include Scope 3 in the final rules. If it does, then companies will have to take a hard look at their supply chains to estimate how components, materials, or finished goods they buy contribute to emissions, both when these items are made and when they’re transported.

Just like companies affected by the UFLPA or the EUDR, companies may need to gather information from several tiers’ worth of suppliers. Fortunately, those suppliers—if they are publicly-traded in the United States—will be doing their own research. “They need to follow the same process that you are with them, with their own suppliers,” Glaser says.

To get ready for compliance, companies should first set up a governance structure. “Get the right teams together within the organization,” says Mellen. Many companies have already created such structures to comply with other sets of rules and regulations, such as those focused on conflict minerals.

Workiva offers technology to support this kind of cross-functional collaboration, helping teams assemble data and create reports, Mellen says.

Many companies already calculate their climate risk and emissions so they can comply with rules from other jurisdictions, such as California or the European Union. But those who haven’t made that move should start right away.

The first step is to study how the SEC’s rules, and other climate disclosure rules, apply to the company’s situation. Then figure out which requirements the company is not already equipped to meet, and map out how to get into compliance. “We do that all the time with our clients, to help them understand what their existing capabilities are and where they will need us to help—what gaps to fill.”

Gateway to Delays

Thousands of Porsche, Bentley, and Audi finished vehicles were reportedly impounded at several U.S. ports in mid-February 2024 due to allegations that the vehicles were manufactured using Chinese subcomponents called gateways that breach U.S. anti-forced labor laws under the Uyghur Forced Labor Prevention Act (UFLPA).

As automakers struggle to find parts that are in compliance with UFLPA, they face backlogs that will likely extend the current expected delivery delays, putting revenue and reputation at risk.

Jena Santoro, senior manager of intelligence solutions at Everstream Analytics, which has been tracking this situation, shares some key points:

1,000 Porsche sports cars and SUVs, several hundred Bentleys, and several thousand Audis were impacted.

• A vehicle gateway is a crucial component in modern automotive manufacturing as it facilitates communication and data exchange between different networks or systems within the vehicle. Without it, a vehicle’s electronic control units operate independently and much less effectively. More importantly, gateways also fortify against cybersecurity issues, and are critical in the development of autonomous vehicles that rely on advanced data exchange and safety protocols.

Though the vehicle manufacturers are now working diligently to replace the parts with those that are in compliance with U.S. laws, delivery delays to dealerships, and therefore to customers, are expected at least until the end of March.

Depending on the complexity of the vehicle concerned, the part can be replaced within between 30 minutes to several hours. The issue, however, is identifying alternate sources of reliable product that will not be found in violation of the UFLPA, and procuring them quickly.

Luckily, the landscape for global automotive central gateway manufacturing is highly competitive and not as centralized regionally like some other automotive components, such as semiconductors.

In this case, the supplier found in violation of forced labor was farther down the sub-tier automotive supply chain. As such, it will take time to verify that alternate product suppliers do not have the same vulnerabilities in their extended networks. As seized vehicles mount at U.S. ports of entry, automakers will be faced with backlogs that will likely extend the current expected delivery delays.

RFS Document Defined

The Received for Shipment (RFS) document in ocean shipping indicates that a carrier has received the cargo at the port but still needs to load it onto a vessel. It’s a pre-printed bill of lading, formalizing other packages’ receipts before loading, and is crucial in transactions involving Letters of Credit. 

The RFS document confirms receipt but doesn’t guarantee shipment loading, making it different from an onboard bill of lading. This distinction is vital for freight logistics and payment processes in international trade​​​​.

How An RFS Shipment Works

In an RFS shipment, in this shipment status, the shipping line issues a bill of lading indicating cargo receipt at the port, yet to load onto a vessel. This facilitates tracking and confirms receipt for buyers and banks, especially in LC transactions. However, it doesn’t guarantee subsequent loading onto the ship​​​​.

RFS and Bill Of Lading Status

When cargo is confirmed as loaded and shipped, the RFS notification changes to an onboard bill of lading, typically showing a shipped-on-board date. This transition is crucial for banks and financial institutions involved in Letter of Credit transactions, as it provides the necessary assurance about the shipment of goods.

Details On A Received For Shipment

The document issued includes the carrier’s acknowledgment of cargo receipt, detailed cargo description and quantity, terms and conditions of the bill of lading, and relevant information for customs and tracking. 

It often accompanies a packing list commercial invoice and the certificate of origin, which are essential for customs clearance and shipment management​​​​​​.

RFS Bill Of Lading Vs. On Board Bill Of Lading

In international shipping, the dynamic between the Received for Shipment (RFS) Bill of Lading and the On Board (SOB) Bill of Lading is vital for efficient cargo management and adherence to trade finance protocols.

RFS Bill of Lading

This document is issued initially when the carrier receives the cargo at the port. It serves as a preliminary acknowledgment of cargo receipt without confirming its loading onto the vessel. The RFS Bill of Lading is crucial in the initial documentation, facilitating planning and logistical arrangements for the upcoming shipping process.

SOB Bill of Lading

Following the RFS Bill, the SOB Bill of Lading comes into play once the cargo is loaded onto the named vessel. This document confirms the loading of the shipment, thereby advancing the cargo’s status in the shipping cycle.

Entities Involved

The interplay between these two bills of lading ensures a transparent and systematic progression of the cargo shipment. It involves multiple stakeholders, including shipping carriers, shippers, consignees, and financial institutions like banks. 

Each entity relies on the accurate and timely issuance of these documents to track the shipment’s journey and fulfill various contractual and financial obligations.

Trade Finance Compliance

The transition from RFS to SOB Bill of Lading is a procedural and compliance step. It aligns with international trade finance requirements, providing necessary assurances to involved parties, particularly in transactions involving Letters of Credit.

Importance for Stakeholders

These documents provide crucial information about the cargo’s status and location for shippers and consignees, aiding in logistics planning and management. Banks and financial institutions offer assurance about the cargo’s journey, mitigating risks associated with international trade financing.

Global Shipping Operations

RFS and SOB Bills of Lading are standard practices in global shipping operations, ensuring that cargo movements are documented and managed effectively from the point of receipt at the port to the final loading onto the vessel.

Moreover, the RFS and SOB Bills of Lading work in unison to ensure a smooth cargo transition through various stages of international shipping, maintaining transparency, compliance, and assurance for all involved parties.

FAQs

Here are some common FAQs about the received for shipment.

What Does Received For Shipment Mean?

Received for shipment is a notation on a bill of lading that indicates the carrier has received the cargo at the port for loading onto a specific vessel or voyage.

What Is Received For Shipment Bill Of Lading?

A shipment bill of lading receipt acknowledges the cargo receipt by the carrier at the port facility for loading onto a specific vessel or voyage. It indicates the cargo has been accepted but has yet to be loaded on the vessel.

What Is The Difference Between SOB And RFS?

The difference between them is RFS indicates that the cargo has been accepted by the carrier at the port for loading, but it doesn’t guarantee that the shipment has been loaded on the vessel. Conversely, SOB confirms that the shipment has been loaded and shipped on a vessel.

Summary Of Received For Shipment

In conclusion, understanding the concept of ‘Received for Shipment’ is important in the shipping industry. This notation indicates that the carrier has received the cargo at the port facility for loading onto a specific vessel or voyage.

It’s important to note that “Received for Shipment” doesn’t mean the cargo has been shipped on board yet. This notation and other notations like “Shipped on Board” and “Clean on Board” help satisfy the buyer or banks that the cargo has been received or delivered. 

Visit inbound logistics to research warehouses, factories, and catch up on important logistics insights.

The ongoing conflict between Russia and Ukraine is emblematic of an increasingly volatile geopolitical moment—the kind of global environment that suggests risks around every corner and few things that can be considered truly stable.

This is the world that logistics managers must navigate. Businesses are increasingly global—their suppliers especially so. This leaves them even more susceptible to the risks of data security, privacy, and fraud.

This is in part because a more sprawling global network of suppliers requires more efficient and detailed management processes at that scale, but also because regulations vary from country to country and region to region, and staying in line with them all is an incredibly complex task.

Those regulations are not done being implemented, either. Just look at the Uyghur Forced Labor Prevention Act, the German Supply Chain Due Diligence Act, and the EU’s Corporate Sustainability Reporting Directive. Each of these, and many more, are currently or will soon require companies to take steps to limit ESG—environmental, social, and governance—risks and document these efforts.

These aim to reduce carbon emissions, increase sustainability, and eliminate modern slavery around the world by prohibiting trade with those who are engaged in or selling products made from forced labor.

Compliance Issues on the Rise

The likelihood of compliance issues for unprepared companies is rapidly increasing, whether or not they are global in nature. There can be incredibly damaging consequences for businesses that don’t know how to navigate the rapidly shifting regulatory landscape; one act of noncompliance averages about $14 million between fines, penalties, and other costs.

Companies that are taking steps to build out their supply chain management tools, particularly with regard to vendor-facing technologies, will have an advantage when it comes to adapting to new global regulations.

This is because compliance risk is just the latest in a long string of risks that are best mitigated by visibility into suppliers, easier integration between tools and communication among parties, and the ability for data to be easily and securely accessed across a network of systems.

Supply chain managers are turning to automation that allows for full data capture during onboarding and visibility into vendors at a glance. This can allow for quick checks on which suppliers are subject to a given regulation, show if they’ve provided the required data the company needs to report, and prompt them with a timely reminder to provide this information when they fall behind.

If vendors don’t do their part, it will be easy for supply chain managers to see what they need to become compliant or drop them in time to avoid penalties.

Properly monitoring for regulatory changes in any region a company does business in is more important than ever. Building the capability to swiftly adapt to changes in that environment is a competitive edge that only companies committed to compliance will enjoy.

Artificial intelligence (AI) and blockchain are two technologies that are quickly becoming indispensable tools within the global supply chain sector.

Artificial intelligence, with its ability to analyze vast datasets and forecast trends, helps to enable the proactive decision-making needed to optimize logistics, predict demand, and enhance overall efficiency. Its role in predictive analytics, route optimization, and demand forecasting has become paramount in addressing the complexities of global trade.

Today, 37% of supply chain leaders are currently using AI or are planning to deploy it within the next 24 months, according to data compiled by zipdo. The market for AI in the supply chain is expected to hit $10 billion by 2025.

Blockchain technology promotes transparency, traceability, and security by creating an immutable ledger of transactions across the supply chain network. This decentralized and tamper-resistant system goes a long way toward instilling trust among stakeholders, while it streamlines documentation and significantly reduces the risk of fraud.

Blockchain is still a nascent force in the supply chain, but its supply chain market size is expected to grow from $0.56 billion in 2023 to $4.21 billion by 2028, at a CAGR of 49.87%, according to Mordor Intelligence.

Together, AI and blockchain are drastically altering how companies manage, secure, and optimize operations within the intricate web of global supply chains and trade networks. Here’s a closer look at some companies that create, produce, and use these advanced tools.

ARTIFICIAL INTELLIGENCE: A Better Way to Analyze Data

Global household appliance brand Dyson uses an AI- and automation-based technology that aggregates and contextualizes data to help make more effective supply chain, procurement, and product decisions. The solution also enhances visibility and collaboration.

A lack of information visibility and collaboration across its procurement, supply chain, and product engineering teams was causing issues for Dyson, a multinational provider of household appliances such as vacuum cleaners, fans, air purifiers, and other items. The company needed a better way to analyze data across departments—and a fresh mindset around embracing AI.

“It’s fantastic to have a system that can analyze the data and give you insights, but you won’t go anywhere if your mindset is still stuck on spreadsheets,” says Michelle Shi-Verdaasdonk, chief supply chain officer at Dyson.

The solution came from LevaData’s proprietary AI- and automation-based technology that aggregates and contextualizes data to help supply chain, procurement, and product teams make better decisions faster. The company’s solution helps sourcing teams reduce costs and mitigate risk at the part, ingredient, and metal level, arming procurement teams with built-in capabilities that provide improved visibility and increased collaboration.

The end game? A greater ability to take decisive actions.

“LevaData is equipping teams with the insights and intelligence they need to execute with higher velocity and greater accuracy,” says Keith Hartley, CEO of LevaData.

By contextualizing complex data from hundreds of data sets, the LevaData platform provides actionable insights and potential cost-savings opportunities to companies like Dyson that are looking to gain a competitive edge. The platform’s custom dashboards provide spend intelligence using real-time data and interactive visualizations, which “can dramatically accelerate decision-making,” Hartley notes.

Probabilistic Planning is the Right Tool

Seeking efficiencies on its path to business growth and network expansion, Grupo Mercury, a Latin American importer and marketer of wholesale electronics products, went searching for an AI partner. It selected an AI-driven planning suite called Service Optimizer 99+ (SO99+) from ToolsGroup, a global retail and supply chain planning and optimization software provider.

SO99+ is an AI-fueled supply chain planning tool that helps retailers, distributors, and manufacturers improve the resilience and performance of their operations. Its effectiveness comes from a probabilistic planning approach that leverages AI and real-time data from across the enterprise for fast decision making. The solution accounts for variability and tailors inventory to demand, helping to mitigate risk and uncertainty in demand and supply planning.

By leveraging ToolsGroup’s native AI and automation, Grupo Mercury says it can navigate complexity, satisfy demand, and achieve enhanced business performance amid network expansion.

“We chose ToolsGroup to accompany us on this journey because the company had the maturity to support our expansion plan, an in-depth understanding of the Latin American marketplace, and a track record of handling similar challenges and product types efficiently and profitably,” says Fredy Martinez, regional director of supply chain for Grupo Mercury.

By working closely with Grupo Mercury, ToolsGroup can “build a more resilient supply chain that will help them convert growth potential into real-world benefits,” says Inna Kuznetsova, CEO of ToolsGroup.

Microsoft Serves as an AI Copilot

Georg Glantschnig, Vice President, Dynamics 365, Microsoft

Microsoft has long provided supply chain management solutions. Its Dynamics 365 Supply Chain Management suite offers a unified view of inventory, manufacturing, service, and logistics functions, and uses predictive analytics to turn data into insights that support strategic decision-making.

The company’s newer, AI-powered user experience is known as Copilot for Dynamics 365 Supply Chain Management. Microsoft introduced Copilot capabilities that enable procurement teams to handle purchase order changes in a scalable, efficient manner and assess the impact of those changes downstream to production and distribution.

Microsoft’s AI tool also offers natural language-based conversational help and guidance on next best actions within workflows to improve productivity, collaboration, and performance.

For example, users no longer need to leave their workspace or toggle between multiple tabs to act on insights. These capabilities enable supply chain teams to mitigate potential disruptions rapidly.

Most importantly, Microsoft says, it will guide teams on how to execute with step-by-step conversational help and enhance their user experience.

“Generative AI and Microsoft Copilot have opened the door for us to reimagine how workers and employees engage with their everyday tools and workflows,” says Georg Glantschnig, vice president of the Dynamics 365 ERP portfolio at Microsoft.

“Empowering supply chain workers is no longer just about building new workspaces to work from—like control towers or command centers—but rather about how we surface relevant information and enable quicker decision-making in the flow of work,” Glantschnig says.

BLOCKCHAIN: Blockchain as Digital Provenance?

Measured by financial assets under administration, Provenance is the largest public blockchain in the world. Created in 2018, the open source blockchain is part of the Cosmos ecosystem and is designed for the regulated financial services industry.

The Provenance Blockchain Foundation supports the development and growth of Provenance Blockchain, working to steer the blockchain toward developing, enabling, and securing a robust environment for global digital financial-asset use cases.

“Trade finance, which traditionally relies on paper or outdated centralized infrastructure, remains a constant thorn in the side of a rapidly changing and complex global trade sector,” explains Dan Garzia, CMO of the Provenance Blockchain Foundation.

By contrast, he says, blockchain technology enables immutable transparency, which reduces administrative overhead and settlement times through elements such as smart contracts and Markers (smart contract capabilities engineered directly into the blockchain protocol), and offers real-time tracking.

Public blockchains such as Provenance offer benefits for data privacy and data security, as well, including decentralization (improving data’s resistance to hacking and data breaches), transparency (improving audits and data tracking), and cryptography (protecting data from being accessed or altered without permission).
Healthcare providers, for example, can better manage patient records and clinical trials data securely and privately.

One company succeeding with Provenance is ZorroSign, a global provider of data security solutions built on blockchain—including a digital signature solution that allows users to sign security documents online. The company recently announced its advanced integration with Provenance.

End-to-End Traceability for the Win

When VeChain Technology launched in 2015, it was rare to see major business applications running on public blockchains, and the company acknowledges that the level of enthusiasm was low.

However, VeChain’s leadership team endeavored to raise acceptance by differentiating the company from the many speculative crypto projects in the marketplace and saw the opportunity for enterprises to capitalize on blockchain even beyond the digital realm.

One strategy was to offer end-to-end traceability. VeChain’s blockchain platform enables an ongoing view of all transactions among supply chain participants.

“Blockchain technology continues to disrupt the supply chain,” says Kuan Thurow, assistant vice president, VeChain US, Inc. “Decentralization, an important trait of public blockchains, provides a trust mechanism. It makes data more robust and reliable when managing multiple competing stakeholders.

“Record-keeping, compliance, and dispute management are several ways blockchain can ensure product quality throughout the supply chain,” Thurow adds.

In 2022, VeChain entered into a strategic integration partnership with TruTrace Technologies, developer of a fully integrated blockchain platform for the cannabis, food, apparel, and pharmaceutical industries. The direct connection between the companies allows TruTrace to offer a seamless way to utilize blockchain without large investments in network infrastructure or management of cryptocurrencies.

Shoppers Drug Mart, Canada’s largest retail pharmacy chain, currently uses TruTrace’s platform as its underpinning technology infrastructure for traceability and accountability associated with its medical cannabis program.

“When we began the development of TruTrace, our mission was to serve as an interconnected blockchain-secured product registry and traceability solution that could bring all stakeholders together and track and manage variabilities from batch to batch and lot to lot,” says Robert Galarza, CEO of TruTrace.

Early on, they encountered difficulties using this technology, including onerous transaction fees and being limited to permission-based systems. VeChain’s solution helped TruTrace get back on track. The company now has “a true enterprise-grade blockchain that understands how to bring value to clients at a reasonable cost with the ability to scale at a global level,” Galarza says.

Decentralizing the Chain

An IoT-enabled device that can recognize when a load arrives, send an update that triggers an invoice, and facilitates payment automatically used to sound too good to be true. But today it’s available through the use of blockchain networks such as Chainlink, a decentralized blockchain oracle network built on Ethereum.

The Chainlink platform provides a suite of services connecting global trade systems with one another and to real-world data in a reliable, secure, and decentralized manner.

Chainlink Cross-Chain Interoperability Protocol (CCIP) provides a universal interoperability standard that securely connects data and value to both legacy and blockchain systems and enables interoperability between them.

“The exchange of trade data and the verification of the movement of goods along supply chains is impeded by a fragmented trade ecosystem, where isolated systems lack access to critical information and interoperability with other systems,” says Chirag Dhull, head of product and industry marketing, Chainlink Labs.

Changing the Game

Blockchain changes all of that. “Additionally, Chainlink Functions [an additional offering from Chainlink] can be used to fetch data from any API, trigger events, and secure trade finance operations,” Dhull says.

Ultimately, Dhull says, Chainlink can increase the transparency of supply chains, reduce administrative costs, enhance materials traceability, expand trade access to emerging markets, and establish high-integrity supply chains with end-to-end verification.

That combination was appealing to global telecommunications provider Vodafone, which recently announced a collaboration with Chainlink, as well as Sumitomo Corporation and InnoWave, to address longstanding challenges in the $32-trillion global trade ecosystem.

“The integration of IoT and blockchains has the potential to provide new monetization opportunities for IoT devices,” says David Palmer, chief product officer for Vodafone’s Digital Asset Broker (DAB).

“Three billion IoT devices are forecast to be transacting in the economy of things by 2030. Securing consensus and validation between DAB and Chainlink will be important to drive this growth,” he adds.

As is becoming increasingly clear, the time is ripe for companies to embrace new technologies that help streamline, strengthen, and secure global supply chains.

Technophobes be warned: proceed at your own risk.

SPOTLIGHT ON GLOBAL TRADE MANAGEMENT

While not as buzzy as next-gen tools like AI and blockchain, global trade management (GTM) systems—arguably the workhorse of global supply chain software—still play a vital role in the supply chain tech stack of many global firms. Thanks to its ability to enable agile and compliant performance in the face of fluctuating trade regulations and increasing penalties for non-compliance, companies can use GTM systems to automate international trade management processes to mitigate risks, ensure compliance, and minimize costs. Here are two examples of GTM in action.

Opening Up Partnership Opportunities

Companies engaging in global trade want to be confident that they are in compliance with a variety of global regulations and protected from potential risks that pop up across the global supply chain. Those needs have driven some 400,000 manufacturing, logistics, channel, and distribution partners to connect on the SaaS-based global trade application suite from e2open.

The company’s cloud-native global platform enables these partners to operate as one multi-enterprise network tracking more than 12 billion transactions annually. The platform is designed to anticipate disruptions and provide opportunities to help companies improve efficiency, reduce waste, and operate sustainably.

The software is backed by a comprehensive database and business rules covering 98% of world trade. It can automatically apply regulatory rules to all cross-border transactions, helping organizations mitigate non-compliance risks such as border clearance delays, fines, loss of trade privileges, and criminal liability. Organizations also gain the ability to minimize duty costs and speed imports and exports by accessing the connections in e2open’s network of global trade partners.

Fast and Easy Filing

Filing documents required by U.S. Customs is standard fare for organizations involved in global trade. The process, however, can be anything but cut and dry—especially at scale. That challenge became evident for many ecommerce companies when Customs implemented a program (Section 321, 19 USC 1321) related to de minimis value shipments. (De minimis allows articles to be imported free of duty and import taxes when the aggregate fair retail value of the articles imported by one person on one day does not exceed $800.)

With the implementation of Section 321, many ecommerce companies took advantage of the program by fulfilling de minimis orders overseas through partnerships with international freight forwarders. The international freight forwarders were also freight consolidators who would package and sort each individual shipment into totes and load those totes into 40- or 45-foot containers so that when they arrived in the United States, the individual totes could be dropped off at a last-mile courier.

However, for an importer to take advantage of the program and avoid paying duties, they have to file three entries with Customs. Most ecommerce companies ship tens of thousands of shipments per container. In an example of 15,000 shipments in a single container, this would mean 45,000 filings, notes Darrell Ortiz, founder and CEO of CDM Software Solutions, a Customs-certified software application provider that helps carriers, NVOCCs (non-vessel operating common carriers), shippers, and importers facilitate export and import shipments into and out of the United States.

GTM solutions like CDM’s play a key role in helping companies with these cumbersome processes. “By automating the process of filing certain documents required by Customs, CDM’s Global Shipment Compliance solution has improved the efficiency of filing those documents by 90%,” says Ortiz.

CDM Software Solutions created a single-message format that enables importers to provide all the data elements for each of the three required customs filings. CDM’s internal system processes the message and sends the data to the appropriate Customs system and returns the appropriate acceptance or rejection response back to the importer. This streamlines the process and empowers companies to benefit from smart global trade strategies.

There are dozens of GTMS available, but not all of them are leaders in the industry. Below you’ll find 20 leading global trade management systems providers. 

What Are Global Trade Management Systems?

A global trade management system is a software solution that companies can use to manage all international trade. It helps them comply with the complex international trade regulations related to commerce. Global trade management systems can automate trade processes, lower the risk of being non-compliant, and even streamline supply chain operations. 

3rdWave

Toronto, Canada | 3rdwave.co

3rdWave is a cloud-based GTMS launched in Canada in 2002, with its headquarters in Toronto. With over 20 years of experience as one of Canada’s largest GTMS, they have developed solutions for many large importers and exporters. 

Several leading industry experts are running the operations at 3rdWave, including their Chief Product Officer, Ned Blinck. Some of the services this GTMS provides clients include import and export management and master data management. 

3rdWave can help with commerce worldwide, even though they’re based in Canada.

Acuitive Solutions 

Charlotte, NC | Acuitivesolutions.com

Founders Phillip Marlowe and William Robbins Jr. founded Acuitive Solutions in 2002. The company’s headquarters is in Charlotte, North Carolina. Since starting Acuitive Solutions from the ground up, they’ve become a leader in cloud-based global supply chain management. 

With over 20 years of experience, Acuitive Solutions has become a global trade provider to some of the world’s largest companies, like Ralph Lauren and Home Depot. Some of their services include freight bill audits, rate management, and supply chain sourcing software.

This GTMS has substantial revenue, with their last reported one at just under $5 million.

Aptean

Atlanta, GA | Aptean.com

One of the best global trade management companies for apparel retailers is Aptean. This global trade management service was founded in 2012 when Consona Corporation and CDC Software merged to provide more in-depth global trade operations. 

Aptean offers enterprise asset management, product lifecycle management, compliance services, and more. They also help companies in various industries like retail, food and beverage, and equipment dealing companies. 

Bamboo Rose

Gloucester, MA | Bamboorose.com

Bamboo Rose is a newer GTMS with origins dating only back to 2014. They’ve quickly become one of the leading options worldwide. Their headquarters is in Gloucester, Massachusetts, but they help suppliers worldwide with supply chain management. 

Some of the best services you can use with Bamboo Rose include a multi-enterprise platform that provides complete visibility on one platform. 

Centrade Mendota 

Heights, MN | Centrade.io

If you want a GTMS with decades of experience, then Centrade Mendota is it. It began as a logistics company in 1973, providing air freight assistance to companies. Now, they’re one of the leading companies for global trade management, with headquarters in Heights, Minnesota. 

When you use Centrade Mendota, you’ll benefit from supply chain visibility that customers will appreciate, advanced analytics, and cloud-based software that you can utilize from anywhere. 

Cleartrack Information Network

Brentwood, TN | Cleartrack.com

Cleartrack Information Network is a subsidiary of MercuryGate International that opened in 2000. Their operations stem from Brentwood, Tennessee. It’s one of numerous global trade

management services that assist with free trade agreements, end-to-end visibility, and more.

Other services Cleartrack Information Network offers suppliers include logistics management, global sourcing, trade compliance, and other things to make business processes more efficient. 

Descartes Systems Group

Waterloo, Ontario | Descartes.com 

Descartes Systems Group operates out of Waterloo, Ontario, and has been operational since the 1990s within the supply chain management industry. The company helps focus on international trade. 

Descartes System Group’s solutions include easier cross-border transactions, shipment tracking, financial forecasting, and more. They strive to connect parties worldwide through a cloud-based system. 

Descartes Visual Compliance 

Buffalo, NY | Visualcompliance.com

Descartes Visual Compliance is a GTMS founded in 1981 in Buffalo, New York. It’s part of the larger Descartes Systems Group. Their goal is to provide comprehensive global trade compliance solutions. 

When you work with Descartes Visual Compliance, they offer services such as export classification, audit and resolution, export automation, and compliance solutions all on one global trade management software. 

e2open

Austin, TX | e2open.com

e2open launched in 2000 but didn’t start providing cloud-based software solutions to companies until 2001. The company’s base is in Austin, Texas, but they help companies worldwide with end-to-end visibility. 

Companies using e2open can control costs more effectively and conduct all business operations more efficiently. 

• IDC recognizes e2open as a leader (highest and furthest) in its MarketScape for Global Trade Management.
• E2open’s customers cross nearly every major industry vertical. The 20 that Gartner lists in its Market Guide all have “yes” for e2open.
• Annual GTM transactions exceed 113 million.

Elemica

Wayne, PA | Elemica.com

Elemica stems from significant chemical companies Bayer, BASF, and Dow Chemical coming together to create a global supply chain network. Their solutions work more for the chemical industry and serve 1,300 clients. 

Wayne, Pennsylvania, is their headquarters location, but they serve clients in over 80 countries. Elemica developed integrated solutions to help mitigate risks, provide visibility, and increase efficiency. 

Freightgate

Fountain Valley, CA | Freightgate.com

Freightgate is a logistics cloud platform with headquarters in Fountain Valley, California. This business has been providing logistics solutions since its founding in 1998, but in 2000, it launched its comprehensive solution to trade management. 

Key features of Freightgate include cross-border trade, freight forwarders, and regulatory compliance. Their centralized solution can help streamline trade processes. 

Freightos

Miami Beach, FL | Freightos.com 

Zvi Schreiber founded Freightos in 2012 in Miami Beach, Florida, intending to make access to a freight marketplace easier for businesses. He remains the CEO of Freightos, which launched its global trade management software in 2013. 

Freightos’ global trade operations include a more visible supply chain, free trade agreements, a duty savings program, and more. 

Freightos has an average number of customers for a global trade management system, with about 2,000, and their revenue in 2022 exceeded $20 million. 

IntelliTrans

Atlanta, GA | Intellitrans.com 

IntelliTrans has been around since 1994, but it wasn’t until the early 2000s that it offered suppliers and brokers a cloud-based solution to global trade management. Even though their headquarters are in Atlanta, they’ve expanded to have offices in Europe and Asia. 

This global trade management system is part of Roper Technologies. Intellitrans offers solutions to global shipments like visibility, compliance, and managed services. It’s a privately held business with just under $28 million in revenue. 

Log-Net

Tinton Falls, NJ | Log-net.com

John Motley is the founder and CEO of Log-Net. He launched this GTMS in 1990, and in 1998, it started offering global trade content to suppliers. 

Log-net is a comprehensive global trade solution that offers clients document management, easy data transfer, access to various supply chains, and compliance operations. 

The company’s goal is to reduce risks associated with global trade, one client at a time. 

Navegate 

Mendota Heights, MN | Navegate.com 

Navegate is part of Radiant Logistics and has been operational since 1996, with a GTMS that launched in 2009. The main office is located in Minnesota, but they have expanded to have offices in Asia and Europe to serve customers more effectively. 

Key features that Navegate offers include product management, customs brokers, export compliance, and more supply chain operations. 

nVision Global

Atlanta, GA | Corporate.nvisionglobal.com 

nVision Global has been providing GTMS to businesses since opening in Australia in 2003. This all-encompassing global trade management software has expanded rapidly and has become one of the best worldwide. 

Those who use nVision Global can take advantage of their real-time shipment visibility and trade compliance and avoid costly penalties for not being compliant.

nVision Global helps businesses in industries like healthcare, retail, and others deliver goods in a timely manner without dealing with trade agreement issues. Larry DeLeon has been running nVision successfully since 2014. 

QAD Precision 

Downers Grove, IL | Precisionsoftware.com 

QAD Precision started in 1983 as Precision Software, and in 2013, QAD Inc. bought Precision Software and rebranded it as QAD Precision. The software helps a business have better control over their trade operations. 

Some key features of QAD Precision include free trade agreements, restricted party screening, import and export management, and foreign-trade policy.

SEKO Logistics 

Itasca, IL | Sekologistics.com

SEKO Logistics started in 1967 and has grown to operate in more than 40 countries worldwide. With headquarters in Illinois, SEKO can provide freight logistics and other trade services to businesses in industries like healthcare, aviation, and more. 

This GTMS assists with global fulfillment, international shipping, freight operation, and other transportation methods for final delivery to happen faster. 

Transportation Insight 

Hickory, NC | Transportationinsight.com

Transportation Insight has been around since 1999, and its headquarters remain in Hickory, North Carolina. It’s one of the largest third-party logistics providers in the US and has a great GTMS. 

This GTMS provides better visibility, customs compliance management, export license management, and other solutions to reduce delays and mitigate risks. As one of the largest GTMS, they bring in almost $690 million annually. 

TransportGistics 

Mt Sinai, NY | Transportgistics.com 

TransportGistics is a smaller GTMS that launched in 2001. The company only has 11-50 employees but is still one of the top GTMS options. 

TransportGistics provides services that include international trade management, documentation management, tariff management, and other aspects that will streamline business operations surrounding trade. 

To see some top-notch brands and shippers in action, read our story on the 10 best supply chains in 2021.

To survive and flourish in this complex landscape, businesses must be adaptable and value networking and collaboration as essential paths for economic success.

While some regions face challenges, others seize opportunities, redirecting their trade routes and networks to continue doing business effectively. For example, in recent years, much concern has been about the loss of manufacturing jobs in the United States. However, there is now a thriving $11-billion investment in electric vehicle and battery production in my home state of Georgia alone.

Challenges in one sector can lead to burgeoning opportunities in another, highlighting the dynamic nature of global trade.

The Importance of Networking

We live in an interconnected world, so global trade demands innovative solutions to sustain growth and overcome obstacles. Fortunately, technological advancements, such as Zoom, AI-enabled supply chains, digital payments, and ecommerce platforms, have emerged as powerful catalysts, revolutionizing international trade by enhancing transparency and efficiency. This has enabled businesses to navigate complexities and continue their global operations.

Strengthen the Role of Sustainability

The importance of sustainability in shaping supply chain networks cannot be overlooked. Contrary to fears that sustainability might impede economic progress, it fosters new businesses and stimulates innovation, generating job opportunities and driving growth.

Incorporating sustainable practices into global trade strategies benefits both individual enterprises and the health of the planet. Georgia’s success in the EV sector is a perfect example of how sustainability is becoming increasingly vital in global trade. As environmental and social concerns escalate, businesses must prioritize sustainability to remain competitive and meet the evolving demands of conscientious consumers.

The Power of Partnerships

Foreign Trade Zones (FTZs) are also a powerful tool to enhance the global competitiveness of U.S.-based operations. These zones offer attractive incentives such as reduced tariffs, streamlined customs procedures, and enhanced supply chain efficiencies.

By leveraging the benefits of FTZs, businesses can optimize their global trade capabilities, giving them a strategic advantage in the ever-changing international market.

Of all the solutions to overcome challenges in this ever-evolving global trade environment, networking is indispensable for success. As specific trends and opportunities vary across regions, businesses must focus on building strong partnerships to stay ahead.

Global trade is a dynamic landscape, influenced by geopolitical events, international relations, and trade disputes. Despite these challenges, the global economy continues to exhibit resilience, constantly seeking new paths for trade.

In this ever-evolving environment, businesses must embrace adaptability and prioritize networking and collaboration as essential elements for achieving economic success.

By embracing change, staying attuned to emerging trends and fostering global partnerships, businesses can position themselves for success in global trade. Collaboration and networking are crucial to navigating the complexities of international relations and supply chain dynamics and pave the way for sustainable growth and prosperity.

About the Author

Scott Center is a director of World Trade Center Savannah (Board President and Former Chairman), a member of the World Trade Centers Association’s Global Board where he serves as Chairman of the Investment Committee, a member of the Executive Committee, and a member of the Nominations and Compensation Committee.

Enter Incoterms. These rules serve as a guidebook for many aspects of global cargo transportation, but are primarily designed to address the obligations of the seller and the buyer of a shipment relative to cost and risk throughout the process leading up to cargo being loaded and while in transit.

Why Use Incoterms?

“Incoterms allow for standardized technology and eliminate the risk of inconsistencies in language terms,” says Phil Denning, vice president of U.S. sea logistics and operations for Kuehne + Nagel. “They also clearly define the cost and risk responsibilities for both the seller and the buyer, in addition to assigning responsibility for customs clearance, first- and last-mile delivery, and insurance coverage.”

The International Chamber of Commerce first published Incoterms in 1936, and update the rules approximately every five years. The most recent changes were made in 2020.

It is a good idea for shippers to regularly refresh their knowledge of Incoterms to ensure they are aware of all current changes.
Here are the most current Incoterms and what they cover.

EXW (Ex Works or Ex-Warehouse)

When goods are sold, it is the seller’s responsibility to package the goods and make them available to the buyer. The buyer is responsible for collecting the goods and all costs associated with shipping, exporting, and importing. The seller is no longer responsible for the goods once the buyer is made aware that they are ready for collection.

FCA (Free Carrier)

The seller is responsible for making the goods available at an agreed-upon location, such as a warehouse or shipping terminal. If the goods need to be moved before the international shipment, the seller is responsible for arranging and paying for the transportation and for loading the goods onto the buyer’s chosen mode of transportation.

The seller is also responsible for clearing the goods for export and paying any export charges. At this point, the buyer assumes responsibility for the goods and should provide a bill of lading to the seller once the goods are loaded for transportation.

CTP (Carriage Paid To)

The seller is responsible for packing and transporting goods to the international carrier, covering customs and export costs, and paying for international shipping.

While the seller pays for the international transport, responsibility for loss or damage transfers to the buyer once the goods have been delivered to the international carrier.

CIP (Carriage Insurance Paid To)

In addition to the items addressed in the CTP rule, the CIP Incoterm also requires the seller to pay for insurance coverage for the goods in transit. Some companies choose to require insurance to cover 110% of the value of the goods. However, the seller and buyer can agree on the specific amount of coverage for a shipment.

DAP (Delivery at Place)

This rule states that the seller is responsible for delivering the goods to an agreed-upon location, bearing all costs for exporting and transporting the goods as well as the risks during transport until the goods are delivered to the destination the buyer selects.

At this point, all responsibility transfers to the buyer including covering the costs and process of unloading the goods and paying all import duties, taxes, and customs clearance fees.

DPU (Delivery at Place Unloaded)

When cargo arrives at its destination, the seller is responsible for providing resources to unload goods for the buyer. Once all the goods have been unloaded, the buyer is responsible for import duties, taxes, and customs clearance fees.

DDP (Delivery Duty Paid)

This Incoterm makes the seller responsible for delivering the goods to the buyer. The seller is also responsible for delivering the goods to the port or shipping terminal, overseeing the goods being unloaded, paying export fees and international shipping fees at the port of origin, and ensuring the goods are cleared through customs when they arrive at the destination port.

The seller pays import and customs clearance fees, delivers the goods, and is responsible for all risks involved in the transaction to this point.

FAS (Free Alongside Ship)

The seller is responsible for all charges and risks associated with transporting the goods from their location to the ship’s loading bay. After delivery, the buyer is responsible for the risk, cost of loading the goods, and essentially everything else associated with the shipment.

FOB (Free on Board)

The seller is responsible for all risks and costs associated with transporting the goods from their location to the shipping terminal. The seller also must make sure the goods are loaded onto the ship as well as handle export clearances and associated costs.

CFR (Cost and Freight)

This Incoterm states that the seller takes responsibility for all risks and costs of transporting the goods to the international carrier, arranging for the goods to be loaded, and acquiring and paying for export clearances.

The seller is also responsible for the cost of transporting the goods to the buyer’s destination port. Responsibility only transfers to the buyer once the goods arrive at their port of destination.

CIF (Cost, Insurance, and Freight)

This Incoterm is different from CFR because it stipulates that the seller is responsible for the cost of insuring the goods when they are in transit.

Are the Rules Easy to Use?

“Incoterms are a specialized body of knowledge,” says Andy Dyer, president of transportation management for AFS Logistics. “The buyer and seller must agree to the terms, so if either party does not have the same interpretation of the rules, there can be conflicts.”

Another factor that adds to the complexity of using Incoterms is that the sales contracting process typically involves different parties within a company than the ones who will be responsible for abiding by the terms.

No one is required to use Incoterms and some companies choose not to do so. In that scenario, “It’s all good until it isn’t,” says Radhika Mulastanam, director of international services for AFS.

Many aspects of global shipping can go awry, including not having adequate labor at the port for loading and unloading cargo, late deliveries by transportation providers, or even damage to the cargo or vessel in transit.

“That is why it is important to have terms in place to navigate unexpected issues or conflicts,” says Dyer.

How Incoterms Impact Shipping Costs

When choosing Incoterms for a contract, an old adage holds true: You get what you negotiated.

For example, buying goods under the Ex-Works or (EXW) rule or the Delivered at Place Unloaded (DPU) can result in very different costs for the buyer and seller.

Another aspect that is important for sellers and buyers to analyze is the distribution of transportation costs and duties to be performed, like loading, unloading, and packaging of goods. The combined cost of trucking, ocean, and rail can have a significant impact on the overall cost of the cargo being transported.

While a seller or buyer may pay less for an international shipment based on the allocation of transportation costs, deciding which party is best prepared to organize fast, safe, and cost-efficient transportation can have impacts beyond cost savings.

The goal is that the product being shipped globally reaches the end consumer on time and is undamaged. Rules can provide a framework, but not the expertise to select the best providers to ensure cargo gets to the port of origin and is ready to be processed at the destination port.

What Global Conditions Impact Incoterms?

International shipping has had its share of challenges over the past few years, from port congestion to the war in Ukraine.

“While global unrest can result in other challenges for global shippers, it is unlikely to impact the use of Incoterms,” notes Maren Corbett, director of operational transformation for Kuehne + Nagel.

Mulastanam shares this example: “When there was a tsunami several years ago, new cars were held at a port in Japan because conditions made it physically impossible to deliver the cars. Had the tsunami occurred while the cars were still on the vessel, rather than offloaded, cost allocation would have been different, based on Incoterms.”

“The financial instability of destination countries can influence the use of Incoterms,” says Corbett. “For example, all shipments for Venezuela must move on C-terms due to currency fluctuations.”

Incoterms provide a basic framework to allocate cost, risk, and duties to global shipments. However, the terms change, can be confusing, and only apply if both the seller and buyer agree. Shippers should review the rules periodically for changes and, when in doubt, partner with a third-party provider specializing in global shipping.

Asked & Answered: Incoterms FAQs

Here are some common questions shippers have about Incoterms.

Do Incoterms apply to services as well as goods?

Primarily, Incoterms apply to goods. They are not intended for services in trade. There are some exceptions when training is included with the goods being traded. If the training materials and demonstrations are imported, Incoterms may be relevant. However, the key takeaway is that Incoterms apply to goods.

How do Incoterms work?

The terms provide a foundation for commonly negotiated global or cross-border trade aspects. When buyers and sellers agree to do business following these universal terms, they simplify the process of global trade because companies have a framework for negotiations. Customs clearance authorities also use Incoterms to establish the base for import taxes.

How do Incoterms affect the price of global transactions?

The terms define which aspects of transportation and insurance are assigned to the buyer and the seller. For example, the seller must have shipments ready for collection by the buyer. In many cases, the goods can be collected from the seller’s warehouse or distribution center.

In DDP terms, the seller must have the shipment ready for unloading at the buyer’s warehouse. Any costs incurred in transporting the goods from the seller’s location to the buyer’s location can increase the price of the transaction for the seller—the party responsible for delivering the goods to the buyer.

What do Incoterms not cover?

Many aspects of global trade are not covered by Incoterms, including title transfer, conflict resolution, the currency of payment, exchange rates, the jurisdiction of trade law, and liability on post-clearance audits.

Can Incoterms be modified by a contract?

The simple answer is yes. The terms are not laws or regulations and can be modified by the seller or buyer. However, the more significantly the contract language varies from the concepts established by Incoterms, the more difficult it can become to refer to case law or precedents in the event of a claims dispute.

Are Incoterms legally binding?

The terms are legally binding to the degree that a sales contract is legally binding. On their own, the terms are not legally binding unless they are used in a contract or agreement between sellers and buyers.

Are Incoterms required on a commercial invoice?

They are not. However, Customs may use a specific term as the basis of valuation for goods being shipped internationally. By using an Incoterm for the transaction, the seller and buyer can influence the amount of the valuation and reduce valuation challenges.

What Incoterms should be used for domestic shipments?

There is no restriction on the use of Incoterms for domestic shipments. It is important that the sales contract clearly states which aspects of the terms do not apply to a specific transaction.

Should Incoterms be used for air freight?

The terms that can be applied to air cargo are: EXW, DDP, DPU, CIP, DAP, FCA, and CPT.

When does title transfer occur in Incoterms?

Incoterms does not address the issue of title transfer. However, the rules do address the point of delivery. Some companies use the words “title transfer” and “point of delivery” interchangeably.

As the risk and compliance environment continues to evolve in 2023, businesses must prioritize robust SCRM and third-party risk management to protect their operations from future challenges. To do this, companies need access to the data and tools that enable them to proactively strengthen their SCRM posture. By taking action now, businesses can be better prepared for whatever the future may bring.

2022: The Case for SCRM

In 2022, the global supply chain faced numerous disruptions that tested the resilience of almost all businesses. In February, Russia’s Ukraine invasion resulted in significant and immediate effects on personnel, with longstanding effects on the global economy, vendors, and supply chain that are still being felt.

Following the invasion, companies needed to ensure the safety of personnel on the ground, then look to their suppliers to see the invasion’s full impact on their company.

The subsequent global sanctions on Russian entities and businesses added complexity, with organizations quickly working to identify the impact of cutting ties with sanctioned entities. The swift action this required demonstrated the critical nature of supply chain visibility and robust SCRM processes.

Throughout the year, cyber supply chain vulnerabilities became a major concern. In September, Microsoft confirmed two zero-day vulnerabilities. Earlier in the year, the Log4shell incident demonstrated the impact that widespread vulnerabilities in a company’s software supply chain can have. Firms found it difficult to quickly respond to, assess, and mitigate these vulnerabilities in near real time without the use of technology.

Regulatory action, such as the UFLPA and NDAA 889, increased pressure on businesses to have visibility into their supply chains.
The UFLPA requires companies to perform adequate due diligence on their suppliers to ensure they are not importing goods made from forced labor in the Xinjiang region of China.

NDAA 889 prohibits government contractors from providing telecommunications and surveillance goods from certain Chinese entities to the federal government. In both cases, it is the responsibility of the business to comply with these regulations.

2023: What is to come

The effects of an economic downturn are already felt across the globe and will continue throughout 2023, leaving SCRM in a tricky position.

In the United States, the impact of an economic downturn is already evident with more than 88,000 layoffs in the tech sector this year. As the economic downturn persists, companies will cut costs and run leaner supply chains. Moving back to just-in-time SCRM can negatively impact businesses, especially with heightened regulatory pressure. Companies need to find a balance between cutting costs and ensuring compliance.

Environmental, social, and governance (ESG) issues are expected to become a key focus in the context of supply chains in the coming year. This is particularly relevant in the wake of regulations that prohibit the use of goods made with forced labor. As a result, ESG principles are likely to be emphasized within supply chains in various regions.

Additionally, the recent geopolitical disruption caused by the Russia-Ukraine conflict highlight the potential impact of such disruptions on global supply chains. With tensions rising between China and Taiwan, organizations need to consider the impact that geopolitical disruption in Asia could have on their supply chains.

Begin preparing today

Organizations shouldn’t wait for widespread disruption or a shutdown of company systems to strengthen their SCRM posture. Beyond the benefits of having a clear, overarching view of an organization’s supply chain ecosystem, a robust SCRM program and framework can assist companies increase return on investment. By providing the flexibility to quickly act and respond when supply chain disruptions occur, or new regulations come into effect, organizations have the ability to better overcome disruption and continue business as usual.

Implementing robust supply chain mitigation strategies, including bridging and buffering, can help an organization prepare for what’s to come.

Bridging means bridging the gap with suppliers to ensure communication is strong before, during, and after any type of crisis, including climate-related events.

Buffering refers to inventory reserves that act as a buffer, or alternative supply sources should primary suppliers face disruption. Proactively implementing these mitigation strategies can help a business respond with agility in the face of disruption.

As supply chain disruptions become more complex, the technology used to detect and mitigate associated risks is also advancing. These developments, such as the ability to perform sub-tier illumination and modeling from a command center, can greatly enhance supply chain risk management. In the near future, increased predictability in supply chain disruptions will be a game-changer for SCRM.

Evolving with the risks

The risk and compliance landscapes continue to evolve, and businesses must aim to remain one step ahead. But with robust SCRM practices, companies can weather the storms ahead and best position themselves to succeed in the face of evolving threats.
Knowledge is key. Knowing where you stand today, understanding the risks and regulations on the horizon, and being armed with real-time visibility into your supply chain can ensure your organization can thrive for years to come.

Based on calculations done before the war, global GDP was forecast to grow by 3.6% in 2023. The latest forecasts show 1.3% growth for the year. Similarly, pre-war, Atradius predicted that global trade would grow 4.5% in 2022 and 3.5% in 2023. However, the estimated figures are now 3% and 1.5% respectively.

Impact on Commerce

Russia and Ukraine are the countries most affected by this war. While these two countries don’t appear to be major players internationally—representing less than 2% of global GDP combined—much of what they do contribute to the global economy is important for commerce.

Russia is a main supplier of oil and gas to European nations, and that supply has dropped by 80% since the start of the war. This shortage forced European countries to scramble for energy alternatives in the United States and the Middle East, but at a much higher cost.

This shortage has caused high global energy prices, as well as record profits for oil and gas companies. It has also brought about major changes to the global energy trade, mainly U.S. crude oil and liquefied natural gas (LNG) exports to Europe.

U.S. oil and gas will continue to fill Europe’s energy supply gap in the short term, but this crisis will also expedite policies to speed up the transition away from fossil fuels. Expect to see more investment and momentum in cleaner LNG alongside efforts to reduce the greenhouse gas impact of trade.

Energy hikes also impact food production costs. Russia and Ukraine accounted for a good part of wheat, corn, barley, and fertilizer exports. In 2023, fertilizer shortages will be a significant constraint on global food supply.

Commodities were also affected over the past year. Russia is a major supplier of nickel, used in battery production, and Ukraine is a major supplier of neon, used in semiconductors.

When Russia first invaded Ukraine, we expected that the conflict would be complete by the end of 2022. One year later, we now expect the two countries to remain in protracted conflict, at least as long as Western military support continues. Combined with simmering tensions in Beijing, this could ensure global value chains will continue to shift, with U.S. producers opting for trade with neighbors and allies.

Taking on the Challenges

Rerouting supply chains is expensive. Identifying and vetting new suppliers can be complex and time-consuming. Companies are also dependent on transportation and logistics infrastructure, which may need to be upgraded, leading to delays and reduced product quality.

With inflation already weighing on margins, taking on these extra costs is a difficult choice but can contribute to a more sustainable long-term strategy.

Price volatility and economic uncertainty will continue throughout 2023. To help businesses find some extra cash flow, it would be a good idea to increase the efficiency of current resources and expand investment in lower carbon fuels and other clean energy technology—this could be a win-win for the sector in the interest of meeting energy needs and energy transition demands.