Supply Chain Scanner - Week of March 24, 2025

Weekly blog by Emily Atkins

Trade compliance as a competitive advantage

As the reality of the new global trade regime sinks in, with on-again, off-again and wildly fluctuating tariffs muddying the waters for companies engaged in import and export activities, new research has shown an increasing importance being placed on trade compliance.

Logistics software provider Descartes recently asked almost 1,000 global supply chain decision-makers about their views on trade and compliance with regulatory requirements. They found that 39% of companies with a fast growth projection – greater than 15 percent over the next two years – said trade compliance was a competitive advantage. This compared to only 22 percent of companies with a slower growth projection of five percent.

As well, 57 percent of those surveyed said they think that technology is either very important or extremely important to ensuring trade compliance competitiveness. In the group of fast-growing companies, 72 percent felt that technology was a critical piece of the equation.

“Given the volatility of the current trade landscape, rife with evolving tariffs, trade barriers, sanctions and regulations, effective and efficient global trade compliance is a distinct competitive differentiator,” said Jackson Wood, director, industry strategy at Descartes.

“Companies that invest in building their compliance teams view compliance as a strategic advantage. They leverage leading technologies to turn compliance into an engine for growth while creating more resilient supply chain operations.”

In our current situation, with pressure being placed on organizations to mitigate the risks from increased tariffs, there is growing competition to find new trading partners. Organizations with confidence in the speed and robustness of trade compliance processes and procedures are well placed to make the fast, yet informed, decisions required to safeguard business without fear of reputational risk, Descartes said in its paper, “Top Three Traits of Companies with a Successful Approach to Trade Compliance”.

The paper points out that being able to get the answers to critical questions on a timely basis can mean the difference between success or failure to win new trading partners. These questions include:
· What screening processes are in place to maximize commercial opportunities while also minimizing the risk of inadvertently trading with a denied partner?
· How quickly can the organization determine whether products require a license for cross-border transactions and avoid the risk of incurring severe consequences, including financially crippling fines, legal repercussions, and even criminal prosecution associated with failure to comply with export control laws and regulations?
· Does the organization have confidence that its sanctions information is up to date?

It's no surprise that Descartes, which thrives on selling digitized solutions to trade compliance challenges, would favour the use of automation to streamline processes. But respondents to its survey also recognize the utility of a high-tech approach.

Seventy-five percent of respondents confirmed that trade compliance technology is fundamental or highly important to their growth strategy. This rises to 83 percent for organizations that perceive international trade compliance as a competitive tool.

The survey also found that technology investment and leading-edge technology strategies are strongly associated with business growth: 86 percent of companies with greater than 15 percent estimated growth over the next two years say technology is fundamental or highly important, compared to only 61 percent of those companies predicting shrinking / limited or no estimated growth.

When you consider the potential costs of non-compliance, it’s easy to understand why companies think investing in trade compliance technology is important. A CBSA audit, for example, means applying corrections to documentation for a four-year period, cautions Mississauga, Ontario-based law firm Ryan.

According to consulting firm EY, “CBSA verifications can be time-consuming and costly for importers. Companies must be proactive and adopt an informed compliance mindset. Best practices for companies include implementing programs, frameworks and methodologies to help maintain and continuously improve their customs and trade compliance management profile.”

As we all face the uncertainty and chaos of the new trading environment, it’s important to note that there are lots of options available to help ensure your organization remains compliant. From consultants to law firms to technology providers, it should be possible to find one that can advise and guide your organization through the maelstrom.

Join the conversation on Canada’s Logistics Community forum!

Emily Atkins
President
Emily Atkins Group

 

Emily Atkins is president of Emily Atkins Group and was editor of Inside Logistics from 2002 to 2024. She has lived and worked around the world as a journalist and writer for hire, with experience in several sectors besides supply chain, including automotive, insurance and waste management. Based in Southern Ontario, when she’s not researching or writing a story she can be found on her bike, in a kayak, singing in the band or at the wheel of her race car. LinkedIn: https://www.linkedin.com/in/emilyatkinsgroup/