Companies that source, manufacture, or sell products overseas face pressure to elevate their global trade management skills. Escalating trade tensions among nations are further complicating the already complex task of minimizing risk and maximizing opportunity in international trade.
What Is Global Trade Management?
Global trade management (GTM), an essential part of supply chain management, is how companies master international trade rules, currency exchange rates, and other administrative aspects of cross-border commerce. GTM professionals handle a wide range of responsibilities, such as monitoring tariff changes, ensuring the compliance of shipments with customs obligations, and leveraging preferential trade agreements and currency trends to lower costs and manage risks.
Global Trade Management Explained
GTM relies on technology that layers trade and financial data over the physical flow of goods. Cloud-based repositories of global trade content, including supplier profiles and import tariff tables, feed into automated processing and reporting systems, AI-based analytics tools, and executive decision-making.
For imports, GTM systems help weigh different sourcing options based largely on landed costs, which include expenses such as customs duties, shipping costs, and currency fluctuations on top of the price of the product itself. GTM systems also can classify exports more accurately, helping companies to avoid delays and penalties for noncompliance with sanctions or restrictions on sensitive technologies, for example. GTM automation can ease customs reporting burdens regardless of which direction the goods are flowing.
A Thomson Reuters survey showed that the use of GTM technology is widespread among companies of all sizes, although about 40% of survey respondents said their implementations remain a work in progress.
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