Balancing the Profit Potential with International Trade

Global sanctions policies are in constant flux and affecting global commerce in new ways. The evolving sanctions landscape is prompting companies to seek out new opportunities for growth and to drive profit. With the re-establishment of formal diplomatic ties between the United States and Cuba capturing the media eye, entire industries are intrigued by the prospect of doing business with the island nation. As select travel and communication channels open, visitors to the country are analyzing market and product gaps waiting to be filled.

Let’s examine the case of a hypothetical sourcing executive visiting Cuba for the first time. This onlooker might perceive a market opportunity for a product such as a satellite dish, for example. Looking to quickly capitalize on the profit potential of the product, the traveler contacts a reseller to send a shipment by air. Although this scenario sounds straightforward, numerous factors come into play for this simple transaction including:

  • Who is this hypothetical traveler? 
  • What components are contained in the satellite dish?
  • How is the exporter or forwarder providing manifest information to the air carrier?
  • Are there other uses for the product in addition to the receipt of commercial television transmissions?
  • Where is the reseller located?
  • Where is the product sourced?
  • Will the shipment be transshipped through another country?

While many sourcing personnel primarily focus on reducing costs and on-time delivery, a majority face a marketplace dominated by regulatory considerations that could negatively impact a company’s bottom line and public image. However, the profit potential does not need to be offset by regulatory complexities.

Companies need to anticipate risk well before shipment and sourcing. Businesses that succeed in the global arena are those that weigh the right trade and sourcing factors ahead of or in tandem with sourcing and prior to transactional decisions. 

Although some nations export select products to Cuba, this does not mean, for example, that a Canadian exporter can transact business with certain parties in the country. Nor does this mean that certain products or components are permitted by the destination country.

Sourcing also goes hand-in-hand with practical distribution and transport. If properly vetted line-item and party-details can populate manifests, then companies can enjoy added efficiencies and are better equipped to focus on business development. Take the example of global security filings as shipments transition to the care of forwarders and carriers. With countries such as Cuba adopting advance manifest requirements, intermediaries and/or carriers must capture required information from shippers and transmit the data to customs agencies.

Often when multiple factors are offered by the same technology provider or systems integrator, businesses are better able to:

  • Reduce the potential of transacting business with denied, restricted or sanctioned parties and nations
  • Minimize the potential of penalties and fines
  • Better demonstrate reasonable care and compliance with audit trail functionality
  • Tailor results based on a series of pre-defined parameters to more easily and efficiently locate information
  • Scale technology to support business growth and new requirements

What is important to note is that regulatory complexity should not be a barrier to trade. Complexity can be reduced if the right systems are in place to standardize and automate procedures.   

Descartes is a leader in managing sanctioned, denied and restricted party details through technology. In addition, our technology has also helped companies stay up-to-date with evolving security filing capabilities as more and more countries adopt the World Customs Organization’s (WCO) Standards to Secure and Facilitate Global Trade (SAFE Framework) modernization initiative. Our solutions include: 

Descartes MK Denied Party Screening™ (Descartes MK DPS™)

Descartes MK DPS is a leading solution that provides organizations of all sizes with easy-to-use options to quickly and efficiently screen customers, suppliers and/or trading partners against a comprehensive database of international restricted and denied party lists. Customers can tailor screening processes to fit their unique risk parameters and flag potential compliance issues for a prompt resolution. The offering also readily integrates to other systems for global trade, customer relationship and operational management.

Descartes Global Security Filing Solution

As a leading provider in regulatory compliance, Descartes offers a wide range of solutions to help companies succeed in today’s ever-changing regulatory environment. Descartes’ cargo security filing software enables collaboration between multiple parties to address a variety of global requirements with added visibility and control of shipment and compliance processes.

Learn more about the new additions to the Descartes family of security filing solutions including:

Written by Joe Mallozzi

Vice President, Transportation Management Solutions at Descartes