The Global Trade Report, by Thomson Reuters and KPMG International, looks at how global trade practitioners are managing centralisation, classification and free trade agreements (FTAs). The study is based on over 50 hours of research with more than 30 global trade leaders from top multinational companies (MNCs). Three of the key takeaways are:
- Centralisation of trade processes continues to be an area of contention for many organisations. Many of the largest and most experienced multinationals report that centralising the governance of global trade is a good starting point for centralisation and, once one area is centralised, companies tend to centralise more trade processes than they initially thought they could.
- MNCs are beginning to use shared services centres or centres of excellence to support the classification process, to help tackle the challenge of product classification. The classification process is often highly manual but most interviewees in the research centralise classification and most could easily and clearly articulate why.
- Very large, complex organisations are substantially more sophisticated in how they use FTAs than their competitors. They tend to handle FTA administration and compliance at the local or regional level. These companies closely monitor the return on FTAs, with many being able to say what they save on the agreements per year, right down to the dollar.
CTMfile take: Conducting trade in the current environment of political uncertainty, currency volatility and technological disruption is raising acute challenges for businesses, particularly those responsible for ensuring trade finance runs smoothly. As the report states: "Every company has different needs when it comes to trade, and there is no one solution that works for every trade team. The right approach usually involves a balanced combination of updated processes and new technology.
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