Why Trade Compliance and Logistics Must Work Together

Why Trade Compliance and Logistics Must Work Together1

Trade compliance and logistics must work together for a number of important reasons. While on the surface, trade compliance for logistics may seem burdensome for many organizations, the benefits of getting their trade compliance and logistics to work together are multifold and far outweigh the short term effort that goes into it, and that of noncompliance.

Undoubtedly, the most important reason for which trade compliance and logistics must work together is that they ensure that there is compliance with the laws of the countries into which the goods travel. It is a lot easier and a lot uncomplicated to have goods moving within national boundaries, where one can expect familiarity with the rules and the operating environment. In the case of global trade, the story is different.

Need to grapple with multiple laws

why-trade-compliance-and-logistics-must-work-togetherThere is great diversity and complexity of laws that govern trade compliance and logistics. They are now more integrated than at any point of time before because of the advent of new technologies. This brings in a motley mix of the elements of global business, such as currencies, laws, locations, people and so on. Businesses that have a stake in the global trade have to deal with these varieties and diffuse elements. One of the surest ways of ensuring that these are managed rightly is by getting trade compliance and logistics to work together.

Since there is a multitude of international laws that need to be complied with at many stages of the global supply chain; trade compliance and logistics must work together. This is the only sure way of ensuring that the company’s goods and products meet the required international trade guidelines and reach their destination safely.

A way out of the complexity

why-trade-compliance-and-logistics-must-work-togetherFor many in the business of exports, complying with the global supply chain may seem complex. However, knowledge of the laws of respective countries and building a sound logistics and supply chain infrastructure will go a long way in mitigating the problems associated with these. This is why trade compliance and logistics must work together.

Imagine a consignment of textiles originating somewhere in the Middle East headed for North America. This consignment has to pass through a few countries, at each of which it has to be sure it meets the compliance requirements. Finally, even when it reaches its destination, it must ensure that the laws of that country are complied with.

Increased efficiency and enhanced reputation 

why-trade-compliance-and-logistics-must-work-togetherAnother important reason for which trade compliance and logistics must work together is that there are substantial long term gains to be had by doing so. Supply chains that have come about as a result of trade compliance and logistics working together become more reliable and efficient. All these mean reduced costs in the long run, increased customer satisfaction, and enhanced reputation in the business.

Elaborating on the point above, it is also equally true that trade compliance and logistics must work together to pump up nations’ economic growth. A country that ensures that trade and logistics are in accordance with internationally legislated laws on the subject are more likely to be trusted by global businesses. Countries in which trade compliance and logistics work together and result in sound business infrastructure are naturally more preferred by businesses as transit routes or destinations for their products. This brings in substantial revenues to the countries.

 

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