In the 2016 Thomson Reuters and KPMG International Global Trade Management survey of 1,700 trade professionals from multinational companies based in 30 countries, 53 percent said technology is the key item that would improve their trade compliance program.
The survey also found that the majority of trade and supply chain departments lack the systems and processes they need to maximize the use of incentives, reduce complexity in classification, and automate tasks in the highly-dynamic global marketplace.
“This reveals a serious disconnect between what trade professionals have and what they need to do their jobs effectively,” said Taneli Ruda, SVP and managing director for Thomson Reuters ONESOURCE Global Trade.
“Results speak of inefficiencies in operational practices across the global trade and supply chain functions. There are different degrees of impact when we look into the particulars of product classification, systems integration, process centralization and free trade agreement utilization; but they are all pointing at automation as pivotal to addressing those inefficiencies in order to contribute to the success of their businesses,” added Ruda.
“Respondents were aligned to our predictions that trade regulation will continue to increase in number, scope and complexity,” said Doug Zuvich, Partner and Global Practice Leader, Trade and Customs, KPMG in the US. “The opportunity lies in improving the tools and methods that will enable efficiency gains in their global trade and supply chain management.”
Manual processes continue to tie up trade teams and increase risks, among them audits, lost savings and opportunity costs.
Only 34 percent of respondents said to be currently utilizing a Global Trade Management system for any aspect of the import/export activities, despite awareness for the need of automation, with 53 percent of respondents citing technology as a key element to enhance their activity.
Managing the transfer pricing process was regarded as a challenge by 93 percent of respondents, with 59 percent of them expressing that their companies lack a formal process to align transfer pricing and customs valuation.
Free Trade Agreements (FTA) usage continues to be low, with 23 percent of respondents saying their companies are fully utilizing all FTAs available to them. This is a global issue with all regions attributing underutilization to the difficulty of record-keeping and tracking supplier information.
One-third of respondents are thinking about how to use the Trans-Pacific Partnership (TPP), leaving the remaining two-thirds not yet preparing to take advantage of an FTA expected to reshape supply chains globally.
Global trade professionals anticipate more regulatory complexity, with 62 percent of respondents assuming this within the next three to five years.