by Kirk Lundburg, CEO at Trade Technologies
How Covid Changed the Priorities for Trade Document Process and Technology
In early 2020, we saw global trade come to a standstill due to the pandemic and its far-reaching consequences. While international trade gradually picked up throughout the year, Q4 volumes were still 4.5% less than Q4 2019. Whether 2021 will be the year of rebound is something that only time can tell. However, it is safe to assume that many of the mindset and operational changes caused by COVID-19 will still be with us after the pandemic ends.
COVID-19 has had a significant influence on decision-making.
The pandemic induced slowdown led to unprecedented and sudden disruptions in both the physical and financial supply chains globally. This halt forced global traders to rethink their strategic choices, internal processes, and the technologies supporting international trade. Most of the news is about companies restructuring their physical supply chains to reduce overdependency, diversifying their supplier base, and digitizing processes to ensure business continuity. They are applying the same principles to the financial and trade document ecosystem they rely upon for payment.
Several vital concerns are at the forefront:
1) Process and personnel resiliency: One of the first things exposed by the COVID-19 surge was the many points of possible failure inherent in traditional international trade document creation and delivery. The heavy reliance on individual employee’s email boxes and couriers for data and document exchange caused many delays when nationwide lockdowns were announced, and employees scattered to thier homes and couriers could no longer deliver. Also, when one or more team members were sick or unavailable, many companies could no longer access or manage their in-process transaction data and documents because they were siloed in personal computers. COVID exposed the many weak spots and limited agility in business operations that goes unnoticed in good times. Resilience and redundancy along with digital document delivery will remain a key focus for 2021 and beyond.
2) Visibility and predictability of payments: The lack of real time visibility into the status of trade transactions and payments when emails and phones are not being answered made it challenging to track and predict payments when it was most needed. Businesses barely surviving on depleting cash reserves realized the importance of visibility to in process transactions to identify and address problems and accelerate payment for international trade transactions. Visibility and shared access to data and documents as provided by our TradeSharp Platform will continue to be a concern for exporters as trade further recovers.
3) Eliminating Errors: COVID-19 emphasized the need for error-free trade documentation as revised documents were more difficult to create and deliver and every day of delay in payments cost exporters dearly. Tedious back and forth on documentation, along with lack of connectivity to third-party providers, contributed to the difficulties. Many exporters are now using our expert outsourced services or our consulting services to look closely at process inprovements to eliminate the recurring errors that were previously an accepted part of internatonal trade payemnts. Ensuring first-time-right trade documentation and online presentations is more important than ever.
However, the consequences are not all grim and bleak. There is also a silver lining to the impact of COVID-19 in the accelerated adoption of new technology and services.
Increased Acceptance of Cloud-Based Software Solutions and Professional Business Process Outsourcing
Organizations that had the foresight to outsource trade document managment to a technology-enabled profesional services company like Trade Technologies or adopt technology-powered trade documentation solutions, such as TradeSharp. were rewarded when Government’s imposed shelter in place orders was announced. This was not unnoticed by their competitors.
Today, many businesses are willing to rely on the experts and embrace outsourcing letter of credit and other complex trade document transactions. Others are adopting cloud-based trade documentation solutions, such as TradeSharp, which is a step in the right direction for the overall industry. For years now, exporters and importers have been shying away from using technology-based solutions to standardize and automate trade documentation quoting lack of adoption from key supply chain stakeholders. With more businesses open to getting onboard these platforms, the results could be significant with higher efficiencies across the financial supply chain.
With industry-leading global outsourced services and patented cloud-based document tools such as TradeSharp, Trade Technologies has for decades strived to enable a gradual transition to entirely paperless and collaborative international receivables collections systems and processes.
Cloud-based tools offer complete visibility to track documentation status and makes it easy to shift work streams in case of unavailability or sickness while working remotely. The 24x7 real-time visibility helps exporters make informed and timely business decisions. By standardizing and automating document creation and exchange, errors are minimized, fast-tracking the entire process. TradeSharp has empowered clients to get paid faster, improve profitability, and enhance overall efficiency.
Fast and Consistent Payment is Vital.
With several companies opting to go completely remote even after the pandemic, exporters worldwide are realizing the importance of investing in the right solutions to facilitate trade and accelerate collections. It will not be an overnight transformation but a gradual process of steady, cost-effective, and sustainable change that will reimagine the landscape of global trade.
Founded by exporters and trade finance specialists, Trade Technologies aims to provide efficient and cost-effective professional services and digital solutions to better prepare and enable the automation and online presentation of cross-border transaction documents to accelerate payments. We have local experts in the Americas, Asia, India and Europe. You can learn more at www.tradetechnologies.com . Please reach out to my team or me to learn more about how we can help you streamline your trade finance documentation.
