Global Trade Management (GTM) Overview
Global Trade Management (GTM) solutions streamline and automate processes related to customs and regulatory compliance, global logistics, and trade financing. By doing so, GTM solutions facilitate the flow of information, money, and goods in global trade supply chains that include buyers, sellers, and intermediaries, including customs agencies, banks, and freight forwarders.
The complexity of global trade is compounded by each global trade participant’s unique position in the field. No two participants have identical needs, and automating global trade requires managing numerous combinations of functional requirements across a trading partner network, with each partner potentially using varied enterprise software.
As compared with domestic distribution management, global trade management introduces the complexities of multiple languages, time zones, currencies, and modes of transport. Further, there can be more than a dozen parties involved in a single international shipment. The laws governing global trade are numerous, highly complex, and ever-changing.
The complexity of global trade is compounded by each global trade participant’s unique position in the field. No two participants have identical needs, and automating global trade requires managing numerous combinations of functional requirements across a trading partner network, with each partner potentially using varied enterprise software. Successful GTM solutions must be flexible and adapt to changing regulations and business requirements without an ongoing need for significant professional services.
ARC segments the GTM market into two high-level solution categories: Trade Compliance, and International Trade Visibility and Execution. These are briefly described in the following sections..
Trade Compliance includes functionality that supports the required item classification, trade documentation, and communications with international government authorities regarding:
- Non-financial trade regulations issues, such as restricted parties, government licensing of export rights for controlled items, and other regulations
- Duties, tariffs, and trade taxes placed by governments on international trade and commerce
Examples of specific functionality often listed by GTM suppliers include product classification, restricted party screening, import security filing, free trade agreement management, foreign trade zones, export control, international customs compliance, and the document and data management functionality that supports these information and process domains.
Trade content revenues are also included within the Trade Compliance category. However, suppliers’ trade content revenues are only included in the study if they also provide GTM software.
International Trade Visibility and Execution
International Trade Visibility and Execution includes functionality that facilitates the execution of cross-border shipping and transportation and provides visibility into international trade partner processes and events. These processes must be international and involve transactions and agreements between commercial trade partners.
This category also includes software solutions that support trade finance agreements, such as letters of credit, that facilitate transactions between commercial trade partners and financial intermediaries.
Examples of international trade visibility and execution typically align with three software functionality profiles:
- Functionality to understand air and ocean carrier schedules, tender to those carriers, and execute the loads. These solutions may also manage related documentation, such as bills of lading, and provide visibility into key in-transit events, such as carrier receipt of goods, vessel departure, and arrival.
- Functionality that provides visibility into supply chain process steps, including transportation, but often extends back to offshore work-in-process and forward to finished goods on hand. This visibility provides insight into production status, inventory on hand, and inventory in-transit across the supply chain, and may also facilitate the exchange of electronic fulfillment documentation.
- Functionality that facilitates trade finance transactions and agreements, such as supplier financing and letters of credit. These solutions often leverage visibility into trade status to provide additional assurances and risk reduction to interested parties.