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Tracking the tricks of trade

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JUST a quick glance at the Austrade website tells any food and beverage manufacturer that the world is a big place, and that there’s bound to be a lucrative market somewhere out there for their products.

Hungarians are apparently hungry for red meat, Chileans have a healthy appetite for beer, and the Czechs have taken a liking to exotic fruits.

While these varied global markets provide abundant opportunities for Australian exporters, each country’s unique way of doing business makes exporting a challenging exercise.

Selecting the best market for a particular product is only the first step in a process of continually understanding which boxes need ticking to export food and beverage products successfully.

“When it comes to international trade one of the key objectives is to fully understand the import country requirements, and that’s over and above understanding the market,” TridentGLOBAL managing director Carman Rossi said.

“It’s becoming a big issue for many exporters in the food and beverage sector to continually be up to date with the compliance requirements for import countries.”

The United Nations Conference on Trade and Development reflects the complexities involved, estimating that an average international transaction involves 27 to 30 different parties, 40 documents, and 200 data elements.

The global political climate has increased the complexity, with issues such as bioterrorism and, more generally, food safety, placing additional requirements on food exporters.

The US Bioterrorism Act requires any Australian manufacturer wishing to export food and beverage products to the US be registered with the US Food and Drug Administration (FDA). The FDA also requires prior notification of any shipments to be exported to the US.

The good news for Australian manufacturers is that solutions are available to help manage international trade.

TridentGLOBAL’s Carman Rossi promotes a solution that leverages the benefits of technology.

“In a constantly changing environment, where rules and regulations around the world are changing daily, our vision of a global trade solution revolves around keeping up to date with all compliance requirements around the world,” he said.

“That information is fed directly into a system so that customers are alerted immediately that there is a change around the world that is going to impact their export or import business.”

Examples of information captured could include country compliance, documentary requirements and even updates in transport schedules relative to the export process.

Rossi says such solutions are capable of interfacing with a range of parties crucial to exporting - such as customs, shipping lines and banks.

Internet-based programs have also been set up to assist exporters in their international trade business, creating an on-line community of traders who can confidentially swap, in a paper-less manner, quality assurance and compliance information.

TridentGLOBAL’s Carman Rossi says exporters are also increasingly benefiting from solutions that not only manage export requirements, but also link with Enterprise Resource Planning (ERP) systems that manage order entry, distribution and supply chains.

“There are many opportunities for integrating those manufacturing and warehouse distribution processes into the export process,” he said.

“An integrated system means time to react to market, time for getting things done, and time for getting paid, is shortened significantly by the ability to transfer data within the system quickly.”

Reasons to manage trade

Rossi believes food and beverage manufacturers should not underestimate the importance of diligently managing trade compliance. Doing so could have financial implications.

“There are many areas where the exporter needs to comply to ensure they get paid,” he said.

“These trade solutions minimise risk on the payment side. They help ensure all the paperwork is right, achieve customs clearance and deal with the necessary permit issuing authority for that food and beverage manufacturer.”

Another example of ramifications arising from non-compliance with import country requirements is possible fines from violating the US Bioterrorism Act.

Despite these penalties, Rossi says, some exporters still do not understand what it takes to succeed in international trade.

“Some companies perceive a solution in the export processes as a low cost, easily done approach, whereas there’s more to international trade than meets the eye.”

“A reasonable amount of effort and investment is needed to maximise the outcome and efficiency required to make international trade a competitive option.”

“Even if exports represent only 10% of a company’s total revenue, because the export processes are far more complex than distributing within Australia, it does require more attention and ongoing investments to capitalise on the potential.”

Future directions

Rossi sees increased traceability as one of the key developments for trade solutions in the future, especially in light of recent food safety and bioterrorism threats.

“In the event where a product has been tampered with, or there is potential harm to the consumer, the product needs to be traced back to its origin,” he said.

“Organisations like Australian Quarantine and Inspection Service (AQIS) expect systems that can track by batch numbers, manufacturing date etc. - right back to where ingredients originated from.”

Ultimately Rossi would also like to see more Australian manufacturers working on exporting issues together.

“There’s an opportunity for food and beverage companies to work together because our competition is not necessarily within Australia, but with overseas companies that produce and distribute their products cheaply because their costs are less,” he said.

“When companies come together and there is synergy, the benefits of cooperation follow. The outcome is always better than when companies try to tackle these challenges by themselves.”

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