Uncertain Times, Uncertain Roles - BPE Global€¦ · Uncertain Times, Uncertain Roles Export...

Published August 2016

KEWILLRSponsored by:

In partnership with:

Uncertain Times, Uncertain RolesExport Compliance Benchmark Study

Part of American Shipper’s Import/Export

Benchmark Series

Written By:

Julie GibbsDirector BPE Global

Renee RoeDirector BPE Global

Eric JohnsonResearch Director American Shipper

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Export Operations and Compliance | Benchmark Report: 2016

ii

Welcome to the seventh annual benchmark study covering U.S. export

operations and compliance, produced by American Shipper in partnership with

BPE Global. This report comes as U.S. exporters face unprecedented levels of

economic and political uncertainty, and that’s saying something.

Simply put, exporters who have been told they were a cornerstone of U.S.

economic growth for the past five years face a future where support for

exports (and global trade in general) might be actively disrupted. These

external dynamics are worries that exporters have to face in addition to their

normal litany of concerns around greater regulatory scrutiny and currency

fluctuations.

Roughly 40 percent of exporters say the strong dollar is hampering their sales,

while 40 percent are also worried about the bottom falling out of the United

States’ export initiative. More than 40 percent are unsure key trade

agreements will be ratified. It’s the very picture of uncertainty.

This year’s report delves into how exporters use technology to help combat

some of these ongoing regulatory and topical impacts, as well as the role that

third-party logistics providers play in export compliance. This particular

iteration makes frequent comparisons between how retailers and

manufacturers view their export obligations, strategies, and technology usage.

The study includes input from 228 U.S.-based exporters, with responses

gathered between early June and late July, 2016. The 23-question survey

covered export compliance policies, strategic considerations, concerns, and

export management technology.

The U.S. presidential election campaign, which includes direct and

unmistakable anti-trade sentiments, has exporters on edge. The change in

administration may bring a dismantling of existing trade agreements, a freezing

of progress on pending agreements, and a lack of focus on the export

initiatives that made great gains in the last administration.

Roughly two in five exporters believe momentum from the Obama

administration’s export program will carry over to the next administration,

while even more believe the TPP and other key FTAs will be stymied.

Surprisingly, a large percentage of exporters are uncertain what impact TPP

ratification will have on them, particularly for those in manufacturing. It’s

possible that between headline news, anti-trade group publications, and a

lack of time to study the actual text of the TPP, exporters believe there will be

no impact to volumes, or at the very least are uncertain about what that

impact will be.

Executive Summary

Uncertainty for Exporters

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iii

Exporter Perspectives

Less than a third of respondents believe that their companies see export

compliance as playing an important role in new business opportunities. The

data suggests that perhaps the challenge is that they have not yet attempted

to quantify why export compliance is an important topic when it comes to

developing new business opportunities, or they need to better quantify their

strategic role. Companies are increasingly reliant on ROI determination,

business cases, and hard data. It’s up to trade compliance teams to spell out

the worth of their involvement in these decisions.

No role is as intrinsically global as that of an export manager. More than 80

percent of manufacturers and nearly 70 percent of retailers are responsible for

exports from at least North America, and the majority have responsibility for

exports from the entire Western Hemisphere. Global responsibility means

managers have an opportunity to streamline and consolidate export operations

and compliance processes.

Most exporters use their carriers and freight forwarders to file electronic export

information (EEI) documentation on their behalf, although the trend indicates

that more companies are taking this function in-house. The latter approach

allows direct control and oversight on filing accuracy.

The continued use of carriers and forwarders, who in most cases are not the

legal “exporter of record,” may be due to a lack of resources or budget

constraints. Either way, relying on a freight forwarder or carrier to file

declarations requires airtight communication of compliance data, such as

accurate shipper’s letter of instructions, and frequent audits.

The vast majority of exporters review their EEIs either internally or via their

carriers, but it’s not enough to assume that EEIs are being filed correctly when

shipments are first identified for export. Changes can occur to the quantity,

value, classification, and the “ship to” location of those shipments for a variety

of reasons.

There is an uptick in the number of countries shipped to by large shippers from

32 on average last year to 38 this year. It’s interesting to note that systems-

based exporters are shipping to a higher number of countries than those on a

manual system, which implies that the systems-based exporters are better

able to handle the added complexity of shipping to more countries.

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iv Export Technology Trends

The average headcount of export compliance departments at large shippers in

last year’s report was 13 and nine for SME exporters. This might be linked to

growing uncertainty over economic conditions and political headwinds. If the

strong dollar is hurting competitiveness, and if companies see export-boosting

free trade deals languishing under the weight of campaign rhetoric, it’s easy to

see how export compliance departments might be one of the more vulnerable

positions in a company.

Meanwhile, respondents overwhelmingly said their export volumes grew

in the last 12 months, despite pressure from a strong dollar and other

regulatory hurdles.

Seven in 10 manufacturers and four in five retailers are using some type of

automation, so it seems the message has been getting through. Fewer and

fewer companies are managing exports purely by spreadsheet or some type

of export compliance automation

The next stage of this evolution, however, is to move away from the piecemeal

approach to global trade management, and there is still lots of work to be

done there. Only 20 percent of export shippers are using a single GTM

platform to manage their exports, while another 10 percent have built

proprietary platforms. But questions remain about whether those home-grown

systems can keep up with the content demands that GTM software

companies and 3PLs meet.

Most companies juggle multiple systems deployment and payment

arrangements, something that goes hand in glove with the hybrid approach

they take to usage of multiple export management systems. Data from this

study shows exporters have more than one system, and those systems often

have more than one deployment model.

For example, an exporter might use its on-premise ERP to create purchase

orders, or have an on-premise transportation management system, but use

software-as-a-service trade compliance tools to determine product

classification and check denied party screening lists. That hodge-podge might

be getting the job done, but it’s not necessarily optimal.

If there’s one worrying piece of data in this year’s report, it’s that the

percentage of respondents who indicate they don’t have the budget to invest

in export automation keeps rising. The will to invest is there, but the way to do

so (in terms of budget and resources) is the roadblock.

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v

More than half of 3PLs are using some type of automated system, and fewer

are using the hodge-podge approach found in a large percentage of export

shippers. This makes sense. It behooves a 3PL to offer a singular platform for

export management both internally and as a forward-facing connection with

shippers.

It’s interesting to note that an almost equal percentage of 3PLs are using

in-house systems versus third-party systems. Creating a customized in-house

system can be extremely expensive and requires a full-time IT staff. It

wouldn’t be surprising if these 3PLs had started building these systems prior

to the maturity and availability of third-party systems, which may indicate they

are using legacy systems that are in need of reinvigoration or replacement.

3PL Export Perspectives

Table

of

Conte

nts


2

Table of ContentsExecutive Summary ................................................................................................................................................................................. ii

Section I: Introduction .............................................................................................................................................................................. 4

Section II. Internal and External Uncertainty for Exporters .................................................................................................................... 5

Section III. Exporter Perspectives .......................................................................................................................................................... 10

Section IV. Export Technology Trends .................................................................................................................................................... 17

Section V. 3PL Export Perspectives ....................................................................................................................................................... 22

Section VI. Takeaways ............................................................................................................................................................................ 24

Appendix A: Demographics .................................................................................................................................................................... 25

Appendix B: About Our Sponsors .......................................................................................................................................................... 26

> Kewill ................................................................................................................................................................................................. 26

Appendix C: About Our Partner ............................................................................................................................................................. 27

> BPE Global ......................................................................................................................................................................................... 27

Appendix D: About American Shipper Research .................................................................................................................................. 28

Fig

ure

s


3

FiguresFigure 1: Impact of Economic and Political Climate on Exporters .............................................................................................................. 5

Figure 2: Impact of TPP Ratification on Export Volume .............................................................................................................................. 6

Figure 3: Top Export Concerns .................................................................................................................................................................. 7

Figure 4: Compliance Involvement in New Market Discussions ................................................................................................................. 8

Figure 5: Company Sees Export Compliance as Important Part of New Business Opportunities ................................................................ 9

Figure 6: Who Does Export Compliance Report To? ................................................................................................................................. 10

Figure 7: Scope of Export Responsibility ................................................................................................................................................. 11

Figure 8: Who is Responsible for Filing EEIs?– Shippers ......................................................................................................................... 12

Figure 9: Do You Review EEI Filings?—Shippers ..................................................................................................................................... 13

Figure 10: Number of Countries Your Company Exports To ...................................................................................................................... 14

Figure 11: Headcount Assigned to Export Management .......................................................................................................................... 15

Figure 12: Export Shipment Volume Growth over Last 12 Months ........................................................................................................... 16

Figure 13: Export Management Platform ................................................................................................................................................ 17

Figure 14: Export System Delivery Model ............................................................................................................................................... 18

Figure 15: Planned Functionality Additions over Next 12 Months ............................................................................................................ 19

Figure 16: Company Understands Impact of GTM Technology—Shippers ............................................................................................... 20

Figure 17: Inhibitors to Export Technology Investment ............................................................................................................................ 21

Figure 18: Top Export Concerns—3PLs .................................................................................................................................................. 22

Figure 19: Company Understands Impact of GTM Technology—3PLs ..................................................................................................... 23

Figure 20: Export Management Platform—3PLs ..................................................................................................................................... 23

Figure 21: Industry Segments ................................................................................................................................................................. 25

Figure 22: Company Size ........................................................................................................................................................................ 25

Figure 23: Job Titles Surveyed ................................................................................................................................................................ 25

Secti

on I: In

troducti

on


4

Section I: Introduction

Welcome to the seventh annual benchmark study covering U.S. export operations

and compliance, produced by American Shipper in partnership with BPE Global.

This report comes as U.S. exporters face unprecedented levels of economic and

political uncertainty, and that’s saying something.

Simply put, exporters who have been told they were a cornerstone of U.S.

economic growth for the past five years face a future where support for exports

(and global trade in general) might be actively disrupted. These external dynamics

are worries that exporters have to face in addition to their normal litany of

concerns around greater regulatory scrutiny and currency fluctuations.

This year’s report delves into how exporters use technology to help combat some

of these ongoing regulatory and topical impacts, as well as the role that third-party

logistics providers play in export compliance. This particular iteration makes

frequent comparisons between how retailers and manufacturers view their export

obligations, strategies, and technology usage.

The study includes input from 228 U.S.-based exporters, with responses gathered

between early June and late July, 2016. The 23-question survey covered export

compliance policies, strategic considerations, concerns, and export management

technology. Survey distribution channels included American Shipper’s subscriber

base and BPE Global’s e-mail database. Qualified respondents are limited to

those companies exporting goods, services or technology (so-called “deemed”

exports) from the United States. This includes freight forwarders, third-party

logistics providers, non-vessel-operating common carriers, and other

intermediaries, in addition to shippers from all industry segments. Carriers and

other non-qualified responses are not included in the aggregate data sourced for

this report.

Simply put, exporters who have been told they were a cornerstone of U.S. economic growth for the past five years face a future where support for exports (and global trade in general) might be actively disrupted.

Secti

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5

Section II. Internal and External Uncertainty for Exporters

The current economic and political climate has created cause for concern

amongst exporters in all industries. Meanwhile, the strengthening of the dollar

continues to dampen exports of goods and services, although the contribution

from net exports to overall economic growth in the United States has

improved slightly.

Contributing to the uncertainty are U.S. presidential election campaign sound

bites, many of which include direct and unmistakable anti-trade sentiments. The

change in administration may bring a dismantling of existing trade agreements, a

freezing of progress on pending agreements, and a lack of focus on the export

initiatives that made great gains in the last administration.

Roughly two in five exporters believe momentum from the Obama

administration’s export program will carry over to the next administration, while

even more believe the TPP and other key FTAs will be stymied.

0%

10%

20%

30%

40%

50%

60%

Not sure TPP andother key trade

agreementswill be ratified

Not sure exportinitiatives will carry

over to next presidentialadministration

Weak salescausing layoffs

Strong dollar hurtingcompetitivenessof my product

48%43%

39%

17%

Manufacturers

Retailers

7%

39%

46%

36%

Figure 1: Impact of Economic and Political Climate on Exporters

124 total respondents

Secti

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6

Surprisingly, a large percentage of exporters are uncertain what impact TPP

ratification will have on them, particularly for those in manufacturing. This may be

a result of not having read the details of the agreement themselves, or perhaps

due to anti-TPP sentiment. Media coverage, for instance, has focused on the fact

that only six of the TPP’s 30 chapters, deal with traditional trade issues.

Some media sources indicate that most of the TPP instead sets rules on

non-trade matters that affect food safety, internet freedom, medicine costs, job

off-shoring, financial regulations, and more. It is possible that between headline

news, anti-trade group publications, and a lack of time to study the actual text of

the TPP, exporters believe there will be no impact to volumes, or at the very least

are uncertain about what that impact will be. The 4 percent of export

manufacturers that believe their volume will significantly increase under TPP,

have likely had internal initiatives to study the exact impacts to their firms.

0%

10%

20%

30%

40%

50%

60%

70%

UncertainNo effecton volumes

Moderatelyincrease volumes

Significantlyincrease volumes

4%0%

59%

37%

Manufacturers

Retails

24%30%

17%

29%

Figure 2: Impact of TPP Ratification on Export Volume


A large percentage of exporters are uncertain what impact TPP ratification will have on them.

Secti

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7

As was the case last year, shippers’ primary export concern is the rising cost of

compliance. Hopefully, at this point, this is something senior management is

keenly aware of as trade regulations become increasingly complex and

enforcement continues to become more stringent. That’s particularly true in

countries that historically have done little to address compliance.

Low staffing levels relative to volume is the second biggest concern, up from

fourth place last year. Unsurprisingly, carrier capacity, which has been a focus

this year, has moved from a minimal concern to become the third greatest

concern. Of note, delays at customs still rank highly as a worry for shippers, with

extended transit time becoming a new top focus this year.

0%

5%

10%

15%

20%

25%

30%

35%

40%

Extendedtransit times

Delaysat Customs

Carrier capacitywithdrawal

Low staffinglevels relative

to volume

Increasing costof compliance

36%

29%

25%26% 26%

Manufacturers

Figure 3: Top Export Concerns


Manufacturers

0%

5%

10%

15%

20%

25%

30%

35%

40%

Increasingrates

Increasing costof compliance

Delays atCustoms

Extendedtransit times

Economicclimate

39%

32%

26%29% 29%

Retailers

Retailers

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8

Inclusion of export compliance in strategic new market discussions is continuing

to increase. This is a positive trend that signals export practitioners are

increasingly being given a seat at the table in these crucial decisions. This year,

however, it is concerning to see that the gap between manufacturers and

retailers being included in these discussions is significant.

As we have indicated in past reports, the inclusion of export compliance

specialists in new market discussions early and often is a key determinant of

market entry success.

Figure 4: Compliance Involvement in New Market Discussions

0%

10%

20%

30%

40%

50%

60%

UncertainNever includedIncluded,but infrequently

Includedfrequently

Always included

12%15%

22%26%

Manufacturers

Retails44%

49%

11%12%7%

1%


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9

On the flip side, less than a third of respondents believe export compliance must

play an important role in new business opportunities. Similar to last year, this

seems to be a challenging area for those in compliance roles. The data suggests

that perhaps the challenge is that they have not yet attempted to quantify why

export compliance is an important topic when it comes to developing new

business opportunities, or they need to better quantify their strategic role.

Companies are increasingly reliant on ROI determination, business cases, and

hard data. It’s up to trade compliance teams to spell out the worth of their

involvement in these decisions. And export practitioners need to continue to

work to shift the perception that export compliance is operational, to

demonstrating how export compliance is truly strategic. Ultimately, this is what it

will take to change these numbers.

As such, it continues to be important for export compliance functions to have

access to C-level executives, and to use the C-suite’s language to hone in on the

value of export compliance as a strategic function.

Figure 5: Company Sees Export Compliance as Important Part of New Business Opportunities

0%

5%

10%

15%

20%

25%

30%

35%

Strongly disagreeDisagreeNeutralAgreeStrongly agree

29%

33%

30%32% Manufacturers

Retails26% 25%

4%

9%7%6%


Less than a third of respondents’ companies believe export compliance must be tied to new business opportunities.

Secti

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10

Section III. Exporter Perspectives

Year after year, this study notes that the majority of export compliance teams

report to transportation, logistics, and operations departments. This seems to

suggest that export compliance is seen not as strategic, but as more operational.

However, our data shows that the majority of exporters think of export

compliance as strategic and important to new opportunities. So even if export

compliance does not report directly to a department such as manufacturing,

operations, or finance, it’s important that export compliance specialists are

involved in new market discussions and sourcing decisions, as they can help

boost competitive advantages.

Figure 6: Who Does Export Compliance Report To?

0%

10%

20%

30%

40%

50%

60%

Manufacturing, purchasing

Transportation, logistics, traffic

OperationsLegalFinance

13%

7%

33%

24%

Manufacturers

Retailers

7%

20%

48%

36%

4%7%


Secti

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Pers

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11

In a world that is increasingly globalized, perhaps no role is as intrinsically global

as that of an export manager. More than 80 percent of manufacturers and nearly

70 percent of retailers are responsible for exports from at least North America,

and the majority have responsibility for exports from the entire hemisphere.

Global responsibility means managers have an opportunity to streamline and

consolidate export operations and compliance processes. These managers have

the benefit of working with multiple export regimes, and can often leverage the

treatment, such as classification and licensing requirements, of controlled items

into other countries.

Figure 7: Scope of Export Responsibility

58%

Global

Exports from Americas

Exports from N. America

Exports from US

15%

8%

18%

43%

18%7%

32%


Manufacturers Retailers

Secti

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Pers

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12

Most exporters, as this report has shown in the past, use their carriers and

freight forwarders to file electronic export information (EEI) documentation on

their behalf, although the trend indicates that more companies are taking this

function in-house. The latter approach allows direct control and oversight on

filing accuracy.

The continued use of carriers and forwarders, who in most cases are not the

legal “exporter of record,” may be due to a lack of resources or budget

constraints. Either way, relying on a freight forwarder or carrier to file declarations

requires airtight communication of compliance data, such as accurate shipper’s

letter of instructions, and frequent audits.

We also consistently see that around 8 percent of shippers do not file EEIs at all,

indicating they must have low dollar value shipments, shipments that do not

require licenses or meet other AES filing exemptions, or they are unfamiliar with

the EEI filing requirements.

Figure 8: Who is Responsible for Filing EEIs?—Shippers

0%

10%

20%

30%

40%

50%

60%

UncertainWe do not file EEIsCarriersInternal staff

40%

30%

48%

35%

2014

2015

2016

51%54%

8%4%

8% 7%5%

9%


More companies are starting to file their own file electronic export information (EEI).

Secti

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Pers

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13

The vast majority of exporters review their EEIs either internally or via their

carriers. Similar to last year’s results, this demonstrates that a strong compliance

program for EEIs is in place for these exporters.

It’s not enough to assume that EEIs are being filed correctly when shipments are

first identified for export, however. Changes can occur to the quantity, value,

classification, and the “ship to” location of those shipments for a variety of

reasons. Tracking EEI updates is a challenge and auditing is the only way to

know if these updates are occurring in an accurate and timely manner.

Also of note: the number of respondents unsure of whether they’re reviewing EEI

filings has grown over the last two years. That’s problematic, and those unsure of

whether they do so should use this study as a cue to start regular reviews.

Figure 9: Do You Review EEI Filings?—Shippers

0%

5%

10%

15%

20%

25%

30%

35%

40%

UncertainNo, we do notreview our EEI filings

Yes, we reviewthe filings

made by carriers

Yes, we regularly reviewthe filings made by in-house

staff, whether viaAESDirect or third partysoftware applications

34% 33%31%31%

2014

2015

2016

34% 35%

18%

25%22%

15%

7%

17%


Secti

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Pers

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14

There is an uptick in the number of countries shipped to by large shippers this

year. Last year, such companies were shipping to 32 countries on average,

compared to 38 this year. Apparently, exporting to additional countries has not

been hampered by the strong dollar and recent sanctions against countries such

as Russia and the Ukraine.

It’s interesting to note that systems-based exporters are shipping to a higher

number of countries than those on a manual system. This might imply that the

systems-based exporters are better able to handle the added complexity of

shipping to more countries.

Figure 10: Number of Countries Your Company Exports To

0

5

10

15

20

25

30

35

40

Small/medium-sized

Shippers

LargeShippers*

Manual Systems-basedRetailersManufacturers

35.7

19.1

37.7

28.3

20.6 22.3

128 total respondents* Large shippers are exporters with more than $1 billion or more in annual revenue.

Secti

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15

The average headcount of export compliance departments at large shippers in

last year’s report was 13 and nine for SME exporters. So, it appears that these

departments are becoming smaller on average. This might be due to the fact that

exporters are increasingly adopting automated means of handling export

compliance, though this report has never advocated for using technology to

reduce headcount (rather it should empower resources to provide greater value).

The lowered headcount might also be linked to growing uncertainty over

economic conditions and political headwinds. If the strong dollar is hurting

competitiveness, and if companies see export-boosting free trade deals

languishing under the weight of campaign rhetoric, it’s easy to see how

export compliance departments might be one of the more vulnerable positions

in a company. Or this may be attributed to cost reductions in a time of

heightened uncertainty.

Figure 11: Headcount Assigned to Export Management

0

2

4

6

8

10

12

14

Small/medium-sized

Shippers

Large ShippersManual Systems-based (uses some form of GTM automation)

RetailersManufacturers

11.6

2.9

11.912.8

9.5

8.2


If the strong dollar is hurting competitiveness, and if companies see export-boosting free trade deals languishing under the weight of campaign rhetoric, it’s easy to see how export compliance departments might be one of the more vulnerable positions in a company.

Secti

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16

There’s good news and bad news in Fig. 12. On the positive side, respondents

overwhelmingly said their export volumes grew in the last 12 months, despite

pressure from a strong dollar and other regulatory hurdles. The downside,

however, is that this growth has not nearly matched the explosive increases seen

in the first few years of the Obama Administration’s export initiative. Manufacturers

fared slightly better than retailers overall, but the strong dollar and lagging sales

continued to have an effect that export reform simply could not overcome.

Figure 12: Export Shipment Volume Growth over Last 12 Months

0%

5%

10%

15%

20%

25%

30%

35%

UncertainExports havedecreased

Morethan 30%

20-30%10-20%5-10%Less than 5%

32%30% 30%

4% 4%

33% Manufacturers

Retails

15%

6% 6% 6%

15%

8%7%

3%


Secti

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Exp

ort

Technolo

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Trends


17

Section IV. Export Technology Trends

This report has long advocated that exporters examine the technology options

available to them to improve process efficiency, increase data accuracy, and

reduce costs associated with export compliance. And with seven in 10

manufacturers and four in five retailers using some type of automation, it seems

the message has been getting through. Fewer and fewer companies are

managing exports purely by spreadsheet or some other manual process.

The next stage of this evolution, however, is to move away from the piecemeal

approach to global trade management, and there is still lots of work to be done

there. Only 20 percent of export shippers are using a single GTM platform to

manage their exports, whether from software providers or from their logistics

services providers. Another 10 percent have built proprietary platforms, but

questions remain about whether those home-grown systems can keep up with

the content demands that GTM software companies and 3PLs meet.

The evolution of a company from manual to automated resembles a spectrum, not

a light switch. In other words, you don’t just automate an export process, and all

the departments and data that feed into it, overnight. Shippers that use multiple

systems to address their export function should think about how they can reduce

the number of systems they use and merge processes onto fewer platforms.

Previous American Shipper research suggests companies find it difficult to

reduce their number of platforms, but that doesn’t mean it shouldn’t be a

medium-term goal.

Figure 13: Export Management Platform

0% 10% 20% 30% 40% 50%

None of these

A mix or hybrid of the above

Outsourced managed service

Automated using a customized internal system

Automated using a system provided by a 3PL

Automated using a global trade management system from a software company

Manual or spreadsheet based

35% 42%

29%19%

16%4%

9% 12%

3%0%

7% 12%

Manufacturers

Retailers

1% 12%


Secti

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Exp

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Technolo

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Trends


18

The shift to cloud-based global trade management systems is now beyond

doubt. For instance, Oracle (traditionally a seller of licensed, installed systems) in

August 2016 said 90 percent of new customers for its GTM software want the

system deployed via the cloud as opposed to on-premise.

That being said, Fig. 14 shows that on-premise deployment is still more common

for manufacturers (likely attributable, at least in part, to investment in existing

systems made long ago). The fact that most companies juggle multiple

deployment and payment arrangements goes hand in glove with the hybrid

approach they take to export management systems. It’s all part of the larger

equation—exporters have more than one system, and those systems often have

more than one deployment model.

For example, an exporter might use its on-premise ERP to create purchase

orders, or have an on-premise transportation management system, but use

software-as-a-service trade compliance tools to determine product classification

and check denied party screening lists. That hodge-podge might be getting the

job done, but it’s not necessarily optimal.

Figure 14: Export System Delivery Model

0% 5% 10% 15% 20% 25% 30% 35% 40%

None of these

A mix or hybrid of these

Custom built or proprietary software

Software available on a project basis

Software-as-a-service/On-demand

Licensed installed software 22%8%

9%4%

1%0%

12% 15%

33% 39%

23% 35%

Manufacturers

Retailers


Secti

on IV.

Exp

ort

Technolo

gy

Trends


19

What’s interesting in Fig. 15 is how, nearly across the board, manufacturers see

broader value in export automation than retailers. They are overwhelmingly more

likely to want to add automation in the areas of trade content, classification,

denied party screening, and documentation generation. This is partially a function

of manufacturers generally being more engaged in export activity than retailers.

Retailers are also more likely to turn to 3PLs to help in these areas.

One encouraging sign is that half of all exporters surveyed want to add record

keeping functionality. That’s an indication that these companies recognize the

value of automation in keeping timely and accurate audit trails. Remember, as

customs and export control agencies get better at sorting through data and

targeting red flags, companies need to keep pace.

Figure 15: Planned Functionality Additions over Next 12 Months

0% 10% 20% 30% 40% 50% 60%

License determination

License management

Global trade content

Denied party screening

Automated Export Systems (AES) filings

Documentation generation/management

Classification/Product management/Item master maintenance

Record keeping 48% 52%

39%26%

37%17%

32%22%

22%4%

26%13%

Manufacturers

Retailers

9%0%

7% 13%


Secti

on IV.

Exp

ort

Technolo

gy

Trends


20

And to underscore the point further about manufacturers’ focus on the benefits of

export automation, Fig. 16 indicates the number of export manufacturers that

understand the value of GTM technology rose 60 percent from 2015 to 2016. In

contrast, the number of retail exporters who said their companies understand the

value of GTM systems stayed the same.

What does this tell us? Of course, each year’s respondent pool is slightly

different, but such a massive increase indicates that export manufacturers know

that manual or inefficient export processes won’t cut it, both from a competitive

and a regulatory perspective.

Figure 16: Company Understands Impact of GTM Technology—Shippers

40% Yes

No

Uncertain

40%

20%

64%16%

20%

42%

33%

25%

42%

39%

19%


Manufacturers 2015

Retailers 2015

Manufacturers 2016

Retailers 2016

Secti

on IV.

Exp

ort

Technolo

gy

Trends


21

If there’s one worrying piece of data in this year’s report, it’s that the percentage

of respondents who indicate they don’t have the budget to invest in export

automation keeps rising, as Fig. 17 shows. The will to invest is there, but the way

to do so (in terms of budget and resources) is the roadblock. A prominent

software expert recently put it best when he said most companies have spent

their IT budget before the year even begins “just keeping the lights on.”

What’s also disconcerting is that year after year, a third of respondents don’t feel

they can bring a return on investment from export automation. Either these

companies aren’t exploring their options thoroughly enough, aren’t defining their

targets accurately, or the GTM market is not explaining how quickly ROI can

be realized.

Indeed, as concerns about budget have risen, fewer respondents cite a lack of

executive support as a hindrance to technology investment. So the challenge lies

in carving out budget and resources, and figuring out winnable projects that

deliver a probable ROI.

Figure 17: Inhibitors to Export Technology Investment

0%

10%

20%

30%

40%

50%

60%

No budgetLacks atangible returnon investment

Lack ofresources

Lack of technicalexpertise

Lack ofmanagement

support

32%30%

15%15%

2013

2014

2015

2016

7%

13%

32%

21%22%

35%35%

46%

19%

10%

33% 34%34%

24%

50% 52%


Fewer respondents cite a lack of executive support as a hindrance to technology investment.

Secti

on V

. 3P

L E

xport

Pers

pecti

ves


22

Section V. 3PL Export Perspectives

This year’s report includes a specific focus on 3PLs in an attempt to gauge

priority differences for logistics providers compared with their export customers.

While the economic climate and cost of compliance were the primary concerns

for manufacturers and retailers, it’s none too shocking that port labor disruptions

were at the top of the list for 3PLs last year, when cargo piled up at the docks

due to longshore contract disputes on the West Coast. This year, however, the

concerns of 3PLs were very much in line with those of its export customers, as

concerns over delays at customs started to diminish while concerns over carrier

consolidation spiked.

Figure 18: Top Export Concerns—3PLs

0% 10% 20% 30% 40% 50%

Low staffing levels relative to volume

Extended transit times

Chassis management/ownership

Increasing rates

Carrier consolidation

Port labor disruption impacts

Increasing cost of compliance

Delays at Customs

Carrier capacity withdrawal

Economic climate

41% 16%

2015

2016

35%34%

32% 27%

27% 32%

24% 32%

24% 11%

14%13%

11% 30%

5% 17%

5% 13%


Secti

on V

. 3P

L E

xport

Pers

pecti

ves


23

3PLs overwhelmingly understand

the impact of GTM technology at a

similar rate as manufacturers. Many

companies send shipping and

compliance-related data to 3PLs

through their GTM system in XML

or EDI formats. This real-time data

is essential for 3PLs to perform at

maximum efficiency and

compliance accuracy, not only for

shipping, but for document creation

and EEI declaration filing as well.

Meanwhile, more than half of 3PLs are using some type of automated system, and

fewer are using the hodge-podge approach found in a large percentage of export

shippers. This makes sense. It behooves a 3PL to offer a singular platform for export

management both internally and as a forward-facing connection with shippers.

It’s interesting to note that an almost equal percentage of 3PLs are using in-house

systems versus third-party systems. Creating a customized in-house system can be

extremely expensive and requires a full-time IT staff. It wouldn’t be surprising if

these 3PLs had started building these systems prior to the maturity and availability

of third-party systems, which may indicate they are using legacy systems that are

in need of reinvigoration or replacement.

Finally, this report would be remiss

not to mention that nearly a quarter

of 3PLs are still using spreadsheets

to manage export compliance for

their customers. It’s likely that most

of these providers are either

handling very small volumes or

address industries where trade

compliance is relatively

straightforward and low risk. It is

also possible that their systems

may not generate the necessary

reports out of the box, forcing use

of spreadsheets, home-grown

databases, and other

non-automated reporting means.

8%

29%

63%

Yes

No

Uncertain


Figure 19: Company Understands Impact of GTM Technology—3PLs

21%

19%

5%

23%

26%

7%

Manual or spreadsheet based

Automated using a global trade management system provided by a 3rd party technology provider

Automated using a system provided by a 3PL

Automated using a customized internal system

A mix or hybrid of the above

None of these


Figure 20: Export Management Platform—3PLs

Secti

on V

I. T

akeaw

ays


24

Section VI. Takeaways

Each American Shipper benchmark research initiative seeks to provide readers

with go-forward recommendations to improve the efficiency and strategic

value of their supply chains. In the case of this report, the authors advise

that exporters:

1. Educate themselves about the opportunities available under the Trans-

Pacific Partnership and/or other bilateral, regional, pan-regional free trade

agreements. Exporters are likely leaving dollars on the table if they ignore

the duty reduction savings possible through FTAs.

2. Create 12-month plans for a variety of economic and political outcomes,

including a potential scaling back of export support, the non-passage of

global FTAs, and even a further strengthened dollar. Don’t be caught off

guard by external circumstances that are somewhat predictable.

3. Understand the expected ROI from automating specific export compliance

functions by talking to vendors, consultants, and peers. You won’t get an

automation project approved if you can’t speak the language of the chief

financial officer and the rest of the C-suite.

4. Reduce the number of systems used to manage exports. It sounds simple,

but it can be an overwhelming task, particularly for large global exporters

running multiple ERP or transportation management instances. Start small,

get momentum, and endeavor to run export processes through as few

platforms as possible.

5. Think hard about filing EEIs in-house. It reduces the need to create airtight

communication lines with forwarders and carriers, and brings the filing

burden back to the entity ultimately responsible for doing it correctly.

Appendix

A: D

em

ogra

phic

s


25

Appendix A: Demographics

35%

19%16%

14%

7%

5% 5% 3PL/Forwarder/Intermediary

Process Manufacturing

Retail/Wholesale

Discrete Manufacturing

Government/Public Sector

Engineering/Construction

Raw Materials/Commodities

Figure 21: Industry Segments


Figure 22: Company Size

32%34%

34%

More than $1 billion/year

Between $100 million and $1 billion/year

Less than $100 million/year

Figure 23: Job Titles Surveyed

8%8%

44%

24%

16%

C-Level (CEO, CFO, CIO, etc)

Executive (MD, VP, EVP, SVP)

Director

Manager

Staff/Analyst



Appendix

B: A

bout

Our

Sponso

rs


26

Kewill

A worldwide leader in logistics software, Kewill empowers organizations to

efficiently MOVE goods and information across the global supply chain. Kewill

delivers quantifiable value to our customers by forging long-term partnerships

that enable them to minimize risk, grow their business and respond to

changing market dynamics. The Kewill MOVE® platform helps companies

collaborate, reduce costs, manage volatility and automate processes across

the entire logistics chain. Focused on transportation, warehousing,

compliance and visibility, MOVE modules seamlessly integrate with existing

business ecosystems and deliver superb value by minimizing start-up and

operational costs.

Kewill delivers greater flexibility, adaptability and return-on-investment across

global supply chains by leveraging our extensive domain expertise, our

industry-leading implementation methodologies, and multiple deployment

and licensing options. A Francisco Partners portfolio company, Kewill

supports supply chain execution activities for more than 7,500 companies

in over 100 countries.

www.kewill.com

Appendix B: About Our Sponsors

KEWILLR

Appendix

C: A

bout

Our

Part

ner


27

BPE Global

Since 2004, companies have achieved results through BPE Global’s global

trade consulting and training services. BPE Global’s team of seasoned

regulatory and operational experts has the ability to navigate the complexities

of global trade compliance, supply chain management, and logistics

operations. As a recognized leader in trade compliance and logistics

management, BPE Global provides solutions that are customized to your

company’s ne eds.

The BPE Global team is made up of knowledgeable, energetic and pragmatic

licensed customs brokers, each with over ten years of experience. BPE Global

gives back to the trade community by sharing knowledge and skills through

webinars, publications, trade events, and as a recognized Trade Ambassador

to U.S. Customs and Border Protection.

Enabling companies to succeed in global business is our mission. Helping you

achieve efficiencies and best practices in compliance is our passion. To learn

more about BPE Global, visit www.bpeglobal.com.

Appendix C: About Our Partner

Appendix

D: A

bout

Am

eri

can S

hip

per

Rese

arc

h


28

Background

Since our first edition in May 1974, American Shipper has provided U.S.-based logistics practitioners with

accurate, timely and actionable news and analysis. The company is widely recognized as the voice

of the international transportation community.

In 2008 American Shipper launched its first formal, independent research initiative focused on the state of

transportation management systems in the logistics service provider market. Since that time the company

has published dozens of reports on subjects ranging from regulatory compliance to transportation

management to sustainability.

Scope

American Shipper research initiatives typically address international or global supply chain issues from a

U.S.-centric point of view. The research will be most relevant to those readers managing large volumes of

airfreight, containerized ocean and domestic intermodal freight. American Shipper readers are tasked with

managing large volumes of freight moving into and out of the country so the research scope reflects those

interests.

Methodology

American Shipper benchmark studies are based upon responses from a pool of approximately 40,000

readers accessible by e-mail invitation. Generally each benchmarking project is based on 200-500 qualified

responses to a 25-35 question survey depending on the nature and complexity of the topic.

American Shipper reports compare readers from key market segments defined by industry vertical,

company size, and other variables, in an effort to call out trends and ultimate best practices. Segments

created for comparisons always consist of 30 or more responses.

Library

American Shipper’s complete library of research is available on our Website:

AmericanShipper.com/Research.

Annual studies include:• Global Trade Management Report

• Global Transportation Procurement Benchmark

• Global Transportation Management Benchmark

• Global Transportation Payment Benchmark

• Import Operations & Compliance Benchmark

• Export Operations & Compliance Benchmark

Contact

Eric Johnson Research Director American Shipper [email protected]

Appendix D: About American Shipper Research

Appendix

D: A

bout

Am

eri

can S

hip

per

Rese

arc

h


29

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