Getting Incoterms wrong can potentially lead to huge losses. They will soon have an updated version too. But don't worry, we did the work for you.If you are a part of the shipping industry, you would know incoterms can be challenging to figure out. Don't worry; we got you covered.What are incoterms? They define the terms of shipping for the cross border trade. They lay out who (the buyer or seller) holds the responsibility in terms of handling transporting and delivery of goods. For either a buyer or a seller, choosing the incorrect Incoterm may affect your cost and freight.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;" alt="whatsapp chat"></a>Incoterms or International Commerce Terms, are set by the <a href="https://iccwbo.org/business-solutions/incoterms-rules/" target="_blank" style="color: rgb(28, 30, 41); background-color: transparent;">International Chamber of Commerce (ICC)</a> and revised every 10 Years. The last edition of these rules came out in 2010, and the next one will take effect in January 2020.The incoterms chart (or the list of incoterms) released by the ICC in 2010 consisted of 11 incoterms. While six of them are related to freight shipping, the other five are about transportation modalities. Let's take a look.&nbsp;&nbsp;<ol><li>Ex Works (EXW Incoterms): If working under this term, the seller is only responsible for making goods available at his warehouse or factory. The buyer has the responsibility of getting the shipment from sellers warehouse or factory to the desired location. This Incoterm applies to sea, air and road transportation.</li><li>Cost, Insurance and Freight (CIF Incoterms): The seller is responsible for paying the costs and freight shipping which is necessary to deliver the entire cargo at the destination port. The CIF incoterm also includes the insurance cost, which involves the risk of loss or damage to goods. This particular Incoterm is only applicable to ocean freight.</li><li>Cost and Freight (CFR Incoterm): In this term, the seller is considered to deliver the goods after loading them onto the vessel. The seller must pay costs &amp; freight necessary to bring the goods to the desired port of destination of the buyer. The buyer handles the risk of loss and damage of products and the extra charges that might come in delivery.</li><li>Free on Board (FOB Incoterm): The goods are to be delivered by the seller when the goods are cleared for exports and loaded on the ship. The buyer pays the cost of freight till destination and risk of goods in the vessel.</li><li>Free Carrier (FCA Incoterm): In this case, the seller is responsible for delivering the goods, which are cleared to export to a particular carrier which is nominated by the buyer. Seller is responsible for payment of carriage till the named place by the buyer.</li><li>Delivered at Place (DAP Incoterm): In this Incoterm, the seller pays for carriage to a stipulated location by the buyer, except the costs which are related to import clearance. The seller assumes all risk to the point that the goods are ready to be unloaded by the buyer.</li></ol><a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" width="auto" style="width: auto; height: auto;"></a>&nbsp;The new list of Incoterm will take effect from 1st of January 2020. Here is a list of what you need to look out for -&nbsp;<ul><li>Free Carrier (FCA incoterm) might be split into two incoterms one for terrestrial delivery other for maritime transportation</li><li>Delivery Duty Paid (DDP Incoterm) might get divided into two parts. As the customer duty needs to be paid by the exporter, irrespective of the place where he delivers the good. So, the ICC can split DDP incoterm in two, based on whether the delivery is at a terminal or a location designated by the buyer. DTP (Delivery at Terminal Paid) Incoterm and DDP (Delivery at Place Paid) Incoterm might come in this set of incoterms</li><li>CIF and FOB can be used for container shipping.</li><li>A new incoterm, Cost and Insurance (CNI incoterm) might appear in the 2020 chart. This Incoterm is intended to cover the gap between FCA and CIF. The seller will pay the international insurance cost, but the buyer will pay the freight. As an arrival incoterm (due to the first letter 'C'), the risk of transport will be shifted from buyer to seller.</li></ul>&nbsp;Found this helpful? Check out <a href="https://www.cogoport.com/blogs" target="_blank" style="color: rgb(28, 30, 41); background-color: transparent;">Cogoport blogs</a> for more industry 101's.

Incoterms 2020 - What's Changing, What's Staying?

Incoterms 2020: Expected Changes and What Exporters Need to Know

Shipping is an integral and critical part of international trade. The success of an international trade transaction is more often than not dependent on how one manages the entire shipping process.To understand how the international shipping process works, first, let’s take a look at the main participants in the procedure:1. Importer:&nbsp;Importer is the buyer. He identifies the need for a product (goods) at a specific location, searches for the best supplier - globally, and places an order for purchase.2. Exporter:&nbsp;Exporter is the seller. He manufactures or procures the products required by the buyer.3. Banks:&nbsp;Banks play multiple roles in international trade. They act as financiers, negotiators of the trade contract, and custodians of the goods/documents.4. Insurance Company:&nbsp;Insurance is a crucial part of the shipping process. Insurance companies help cover the risks involved in transportation.5. Freight Forwarders:&nbsp;Freight forwarders are agents who coordinate with the other participants in the shipping process on behalf of the importer/exporter.6. CHA:&nbsp;Customs House Agents (CHA) assist the exporters and importers in getting clearance from custom authorities.7. Shipping Company:&nbsp;The company that owns the carrier (ship) that carries the goods from port of loading to port of destination.8. Customs:&nbsp;In any international trade, custom authorities of at least two countries - country of export and country of import - are involved. The customs authorities provide clearance for the goods to leave the country of export and enter the country of import.9. Port Authorities:&nbsp;Like the customs, port authorities of at least two countries are involved in the shipping process. The port authorities provide clearance for the goods to be loaded on the ship.10. Intermodal Transport Providers:&nbsp;Rail/road transport providers are also an important part of the shipping process. They facilitate the movement of goods from factory/warehouse to port of loading and the movement of goods from port of destination to the final destination.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a>The International Shipping Process - Exports from IndiaContrary to popular belief, the international shipping process does not start when the shipment is loaded on a ship, it starts when the importer identifies the need for a particular product and floats an enquiry - globally, to procure those products.The shipping process involves the flow of goods and documents from the place of origin to the place of destination. For the process to be completed successfully, the transfer of goods and the documents from one party to another must take place in synchronization.Here is an infographic that shows the steps involved in the international shipping process (for a shipment exported from India) from the time the need for a product is identified till it is fulfilled. <img src="https://prod-cogoport.s3.ap-south-1.amazonaws.com/49e76dcb5196ad53b6a33b93bac3d4da/Cogoport_Article%20mailer%20%28Shipping%20process%29-04%20%281%29.png" alt="Cogoport_Article%20mailer%20%28Shipping%20process%29-04%20%281%29.png" class="center" style="width: 981px; height: 2212px;"> <pdir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt;text-align: justify;">Given the number of participants and steps involved, most exporters and importers find the international shipping process time consuming and challenging. We understand both the importance of international trade and the challenges involved in it. To reduce the time involved and make the process more efficient, we created an integrated supply chain platform that brings together some of the main participants in the international trade ecosystem. </pdir="ltr">Just&nbsp;<a href="https://www.cogoport.com/signup">sign up</a> on Cogoport to build your own international shipping dashboard. Get instant access to transparent ocean freight rates, reliable insurance agents, customs agents, trucking services, and start tracking your shipment from pickup to final delivery.

Guide: International Container Shipping Export

Shipping is an integral and critical part of
international trade. The success of international trade transaction is more
often than not dependent on how one manages the entire shipping process.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 1.png" width="auto" style="width: auto; height: auto;"></a>



To understand how the international shipping
process works, first, let’s take a look at the main participants in the
procedure:



1. Importer - Importer is the
 buyer. He identifies the need for a product (goods) at a specific
 location, searches for the best supplier - globally, and places an order
 for purchase.



2. 
Exporter - Exporter is the seller. He
manufactures or procures the products required by the buyer. 



3. 
Banks
- Banks play multiple roles in
international trade. They act as financiers, negotiators of the trade contract,
and custodians of the goods/documents.



4. 
Insurance
Company - Insurance is a crucial part of
the shipping process. Insurance companies help cover the risks involved in
transportation.



5. 
Freight
Forwarders - Freight
forwarders are agents who coordinate with the other participants in the
shipping process on behalf of the importer/exporter.



6. 
CHA - Customs House Agents assist the
exporters and importers in getting clearance from custom authorities.

International Container Shipping - Export Process

After holding 2 successful drives for clearing pending GST dues of exporters, CBIC has launched the 3rd edition, from July 16 to 30.The CBIC notification is appended below for your reference and use.<img src="https://prod-cogoport.s3.ap-south-1.amazonaws.com/2cab85f00b556a9f65dd6cf9e90e979c/Press%20Note.jpg" style="letter-spacing: 0.01rem;" alt="CBIC GST Refund Notification" class="center" width="">

CBIC announces 3rd drive for pending GST refunds

One necessary step to grow a business is to expand from
the home market, especially in a world where globalisation has taken over, to international markets to such an extent that one finds Brazilian coffee in the cup of someone
who is driving a German car somewhere in the United States. These global links
are supported by the phenomenon of international trade (export
and import).And, to excel in international trade, it is necessary to
have an in-depth understanding of international business and the shipping process.
While the business scenario and shipping regulations would differ from country
to country, there are some common errors which all exporters must be aware of
and try to avoid if they want to build a global business.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" width="auto" style="width: auto; height: auto;"></a>Here are 5 common mistakes that exporters make and tips on how to avoid them:&nbsp; 1. 
Overlooking a Promising Foreign
Market:&nbsp;A promising foreign market
is - a country that not only has the highest demand for the export
product, but also one with a favourable business environment. Knowing which
foreign market is commercially viable, is the most basic rule of business. But
many exporters, especially those new to the trade, fail to recognize these
markets.In order to avoid this
mistake, exporters should try to focus on a few particular ideal markets
instead of catering to several countries at once. Streamlined efforts and focus
are the keys to achieve success in export business. Exporters should follow a “structured
research” approach to identify the best target markets, conduct easy and
inexpensive “secondary research” to short list the best markets, and then eliminate
those which are expensive, time consuming, or offer the least profit/return.
This process will help finalise a set of countries with the most feasible
market for the product.2. 
Not Localising
the Product:&nbsp;Exporters make the mistake of entering new foreign
markets without conducting a thorough market research, which may create marketing
problems and lead to choosing wrong distribution channels.Exporters need to
understand that foreign customers may not accept their product as-is and
delivered exactly like it is all over the world with no customisation. Before launching
the product in a foreign market, it is essential to research the local market, understand
the customers’ preferences and localise the product to suit the needs of the target
market. A well thought-out sales and marketing strategy that takes into
consideration the above points will help connect with the buyers in the new
market and create a strong foundation for the brand.3. 
Neglecting to Conduct a Background Check:&nbsp;A trustworthy business partner with a good
reputation is essential for establishing a base in a new market. Often, in the
excitement of going global, exporters neglect to conduct basic due diligence or
background checks of their international business partner. This negligence can
lead to financial, market, and even reputation loss.To
avoid entering into a business agreement with a disreputable company, exporters
must themselves carry out a background check or hire an agency to conduct one
on their behalf.4. 
Failing
to Insure Goods:&nbsp;In
international logistics, accidents happen. Ships can crash, catch fire, or sink;
goods may get stolen or damaged. These incidents and accidents result in
financial loss and damage to the product.Exporters can avoid or at
least minimize the loss arising out of transportation by getting an adequate
insurance cover for their goods. They can either approach insurance providers
themselves or discuss available options with their freight forwarders. Before
choosing an insurance policy, it is important for exporters to discuss
insurance requirements with the importer, understand the terms of the policies
and what they cover, and find out if any special insurance provisions are
required for their product.<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" width="auto" style="width: auto; height: auto;"></a>5.Picking
the Wrong Service Providers:&nbsp;There are many parties involved in
an export process. Some of the important participants are – banks, freight
forwarders, shipping lines, and intermodal transport providers. The successful
completion of an export shipment depends on how all the participants carry out
the process assigned to them. It is important for an
exporter to pick efficient and trustworthy service providers who can cater to
his business requirements at a competitive rate and in the least possible
amount of time. 






If you are having
difficulty in finding the right and trustworthy service providers, just <a href="https://www.cogoport.com/signup">sign
up</a> with <a href="https://www.cogoport.com/">Cogoport</a>.&nbsp;At Cogoport,
you will not only get access to reliable service providers, but also get the best possible rates and customized shipping solutions.

5 Common Export Mistakes to Avoid

Bilateral trade between India and Pakistan is one of the greatest missed opportunities in South Asia. In August 2019, Pakistan downgraded diplomatic relations with India and ceased trading altogether. The neighbours have turned their backs on any short-term trade benefits. However, the situation wasn’t always so.<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a>The two countries share a long list of disputes – border control of Kashmir, rights to Indus river water, four wars, financial settlements from the Partition, and most recently, terrorist attacks and counter-offensives. As a result, trade between the two countries suffers. Trade depends on diplomatic and mutually beneficial relations. Political disputes are bad news for bilateral trade.<h3>Latent Potential</h3>The extensively shared land border with road and railway connectivity lends itself to a lot more trade. The shipping routes also contribute. The ports of Mumbai and Karachi are a mere 589 nautical miles through the Arabian Sea, but the political landscape trumps the physical proximity.Disproportionate costs, trade barriers, high levels of informal traffic, complicated non-tariff measures and a long list of product restrictions are contributing factors. The two countries account for 88% of South Asia’s GDP and 86% of its population. Both would benefit from a renewal of trade ties.As of 2018, the potential for reciprocal trade between the two Indus valley nations stands at a whopping $37billion, according to a World Bank report. But in 2017-18, the total value of trade between the two was a mere $2.4billion. This volume accounted for a meagre 0.31% of India’s total trade with the world and just about 3.2% of Pakistan’s global trade, points out India’s pink paper The Economic Times. The missed opportunity is massive.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a>So, why aren’t they trading?As of mid-2019, tensions are heightened.In response to the Indian government’s revocation of Article 370 that ended Jammu and Kashmir’s special status, Pakistan severed trade ties with India.But Pakistan’s radical decisions don’t necessarily put it at the losing end. India surpasses Pakistan’s population by over a billion people. The actual effect of this trade embargo on Pakistan’s economy is insignificant when its GDP per capita comes into play.The reality is that both countries are not major trading partners for each other. In comparison with their respective global trade, the inter-Indus trade is insignificant.Pakistan trades heavily with the US, China, Afghanistan and the UK. India, its next-door neighbour, makes number 13 on this list. It also ran a trade deficit with India at a value of $1.6billion at the time of suspension. So, that might be a blow to the economy, but it will only be temporary. At the same time, India trades with the US, UAE, China and Singapore. Pakistan doesn’t even make its top 15 trading partners.India is the rising star of Asia. With the highest rate of predicted GDP growth, rising middle class and smartphone penetration, it should be the go-to destination for any trading partner. India is providing impetus to its economy to deliver on growth predictions. It is busy forging new partnerships with other Asian countries while Pakistan is focusing on strengthening ties with the middle east.One thing is for sure, if the two countries were to set their differences aside and resume trade, they would both walk away as winners.

India-Pakistan Political Dispute: Affect on Trade

India-Pakistan Trade Dispute: Current Issues & Economic Impact

I’m diving straight into what caught my eye this past week. And then I’m going back to preparing my speaking sessions at Multimodal Europe in Rotterdam and the ICT &amp; Logistics fair in Utrecht this week.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;" alt="whatsapp rate search"></a>Global Trade“Bad tidings loom for China, with its economy reportedly slowing far faster than expected. The South China Morning Post reports the situation is likely to spur Beijing into introducing new growth-supporting measures to avoid returning to its “battle-tested” strategy of large-scale monetary and fiscal stimulus. Even so, the news will be particularly concerning for an economy that has yet to experience the full force of its trade war with the US. And with October seeing the fifth successive month of contraction in terms of new export orders, the manufacturing sector is getting nervous.”→ Chinese economy slowing faster than expected – worst yet to comeWhat goes for the air, goes for the seas as well. There may be delays with ships going to or coming from the UK if there is no contingency plan.“The International Air Transport Association (IATA) has called for urgent action by the UK and the European Union to put in place contingency planning for the continuation of air services in the event of a “no-deal Brexit,” and to move much faster to bring certainty to three critical air transport issues:<ul><li>The uninterrupted continuation of air connectivity;</li><li>The framework for regulating safety and security; and</li><li>The policies and processes needed for efficient border management”</li></ul>In My OpinionThe last few weeks there has been a lot of talk about the IMO, with slow steaming and decarbonization of fuels at the top of the list. The responses to the various measures they are taking are mixed. The IMO is now further focusing on sustainability efforts for the international shipping community, by attacking the plastic soup. A good initiative in my opinion. Talk about IMO…<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a>“The International Maritime Organisation (IMO) is to launch a wide-ranging study on how it can help reduce levels of plastic litter from ships.The IMO said it would study litter levels and port reception facilities for litter and consider new measures, including the compulsory declaration of containers lost at sea.”→ IMO launches initiative to help remove plastic litter at sea“The International Maritime Organization (IMO) has struck down a proposal to slow-roll the implementation of lower sulfur standards for ship fuel emissions, according to multiple reports.”→ <a href="https://www.supplychaindive.com/news/low-sulfur-delay-rejected-IMO/540641/" target="_blank">IMO pushes low-sulfur rules forward despite calls for delay</a>“Efforts to decarbonise the shipping sector have taken a step back after the IMO overturned plans for new design standards.A bid to impose a 40% efficiency improvement requirement on all containerships built from 2022 onwards – based on 2008 standards – was put in abeyance until the IMO meets again next May.”→ IMO 'kills remaining hopes for requiring the building of more efficient containerships'And some interesting insights on the low-sulphur debate in the article below.→ <a href="https://www.freightwaves.com/news/imo-carriage-ban" target="_blank">Global shipping industry loses latest pitch to hold off switch to low-sulfur fuel</a><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 2.png" alt="whatsapp rate search" width="302px" style="width: 302px; height: 44px;">Carrier RatesSome numbers from the US market predicting a rise in prices for water transportation this year, and a small decline next year. And there is uncertainty on the Asia-Europe route when it comes to rates.“Looking at the same-month-year-ago rate of increase, we see that the industry’s inflation rate hit 9.2% in September, quickening from 5.5% in June.All segments of the market have contributed with deep-sea prices up 13.8% and coastal and intercoastal also up 13.8%.Added to this, prices for shipping via inland waterways accelerated 3.6% in September following a 0.7% hike in June.With trade wars the new normal, both seaborne export and import trends are slowing.We now forecast the water transportation industry’s average annual prices to increase 4.7% this year and decline 0.4% next year.”→ <a href="https://www.supplychain247.com/article/price_trends_pricing_across_the_transportation_modes" target="_blank">Price Trends: Pricing across the transportation modes</a>“The Asia to North Europe component of the Shanghai Containerised Freight Index (SCFI) recorded a 4.7% uplift in spot rates this week to $761 per teu, underpinned by a raft of cancelled October headhaul sailings by carriers.Compared with the same week last year, container spot rates on the route are approximately 2% higher, but the profitability of the container lines is being severely dented by a year-on-year 43% hike in bunker costs, which they have been unable to recover from shippers.”→&nbsp;Cancelled sailings prop up Asia-Europe spot rates, but demand looking uncertainSome issues for inland shipping as well on the Rhine, as the waterlevels are very low.→ Barge operators hit by new charges as Rhine water levels sink to new lowsLogistics TechWithout data, there is no analysis and without analysis there is no insight. There is a lot of new technology available to capture and process this data. Duth ports and the Dutch government are seeing the potential, as you can read in the article below.“The Dutch government recently announced their plans to spend an extra annual €64 million on big data training for police, so in the future, they might have a better understanding of what to expect from data analysis.”→ <a href="https://thenextweb.com/news/police-iot-ports-crime" target="_blank">Police are outsourcing criminal-catching to IoT in Dutch ports</a>The Canadian government is experimenting with blockchain technology.“The Canada Border Services Agency is taking steps to streamline and secure the flow of shipments into the country by piloting TradeLens, a new blockchain-enabled shipping solution developed by IBM Corp. and A.P. Moller-Maersk, the companies said this week.”→ <a href="https://www.dcvelocity.com/articles/30180-canada-border-services-agency-to-pilot-blockchain-shipping-solution" target="_blank">Canada Border Services Agency to pilot blockchain shipping solution</a>I love pizza and I love tech. Pizza Hut has combined these in a great way. How about some robot-cooked pizza? Prepared en route and delivered to your door by that same robot? Bring that to Rotterdam!→ <a href="https://www.supplychaindive.com/news/Pizza-Hut-robotic-delivery-truck/541172/" target="_blank">Pizza Hut unveils robotic delivery truck that bakes pizzas en route</a>Photo by&nbsp;Cameron Venti&nbsp;on&nbsp;Unsplash

Global Trade, IMO, Freight Rates & Logistics Tech

This Week in Ocean Freight (02/11/18): Global Trade, IMO Updates & Freight Rates

The Trump tariffs have shaken the international trade industry for the worse. But there is more to the story of the current unimpressive global economy.&nbsp;Following decades of globalisation-led growth, the tide has turned. The World Trade Organization (WTO) reports global GDP growth down from 2.9 per cent in 2019 to 2.6 per cent in 2019 and 2020.<a href="https://api.whatsapp.com/message/N4CI7UNDFE2ZM1?autoload=1&amp;app_absent=0&amp;utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog Banner WA 3.png" width="auto" style="width: auto; height: auto;"></a>The ongoing trade war between China and the USA, the two world’s largest national economies, clearly causes pain for exporters. Tariffs and other trade barriers push import costs up, and exporters struggle to find buyers as their products become uncompetitive. Retaliatory actions between the two economic giants have escalated tensions in the past couple of years and contributed to a worldwide slowing of trade.The USA is at its most protectionist in a century, imposing almost 25 per cent tariffs on most of what it imports from China.But reduced export activity is not all because of President Trump’s trade strategy. Other factors have also had an impact on export activity.&nbsp;<h3>It's Not All Tariffs</h3>The Chinese economy is increasingly driven by domestic consumption as its middle class continues to grow and becomes more affluent. China can meet more of its needs from within and become less dependent on imports. And, as Chinese growth has slowed to its lowest for almost 30 years according to <a href="https://www.npr.org/2019/07/15/741735791/chinas-economy-falters-slowest-growth-in-nearly-3-decades" target="_blank" style="color: rgb(74, 110, 224); background-color: transparent;">reports</a>, its demand for input materials and capital goods has reduced.&nbsp;<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-1.png" width="auto" style="width: auto; height: auto;"></a>Rising nationalism, often fuelled by concerns in developed markets over globalisation, tends to make some markets more insular. Uncertainty hurts trade, so the unknowns around the UK’s expected no-deal departure from the European Union are adding to the slow down.&nbsp;&nbsp;&nbsp;Global trends can be amplified by local tensions too. For example, shipments to Hong Kong, a key Chinese destination, were <a href="https://www.business-standard.com/article/markets/hong-kong-unrest-is-worrying-india-s-jewellers-shipment-down-6-6-119090400867_1.html" target="_blank" style="color: rgb(74, 110, 224); background-color: transparent;">reported</a> to be down by an additional 6 per cent year-on-year in September 2019 because of the pro-democracy demonstrations in the city.&nbsp;Other trends have a bearing too. Globally, the threat of climate change has focused many people’s minds on the distance their food (and other products) travel. A ‘conscious consumption’ movement sometimes described as ‘locavore’ has emerged and gained traction. It boosts the local production of foodstuffs and reduces imports. Food exporters are hit by the sentiment of an increasingly progressive consumer population.&nbsp;<h3>Localisation and in-country investment offer an alternative</h3>As rising wages in China have forced multinational companies to look elsewhere for lower costs, India, Vietnam, Bangladesh and the Philippines have all been winners. And, as these countries experience growth, their citizens join the ranks of the consuming middle classes. Market entry specialists are thriving by offering a bouquet of services - market research and company registrations, tax planning and legal advisory - to foreign investors.Around the world specific forces are having an impact:<ul><li>In India, the Make in India program encourages companies to establish manufacturing in the country.In the European Union, France and Germany are actively encouraging Foreign Direct Investment with policies that make it easier for overseas companies to set up.</li><li>In Africa, Kenya is positioning itself as the strategic gateway to East Africa and hunting foreign investments.</li><li>Mexico is seeking to reduce its dependency on the USA as an export market. The government of Andrés Manuel López Obrador is inviting foreign investment into the country as a staging post to Latin America.</li></ul>Across the world, the terms of trade and investment are morphing.<a href="https://cogoport.com/signup/en-IN/?utm_source=web&amp;utm_medium=blog&amp;utm_campaign=general" target="_blank"><img src="https://cdn.cogoport.io/cms-prod/cogo_public/vault/original/Blog-Banner-Portal-3.png" width="auto" style="width: auto; height: auto;"></a>Establishing bases in target markets offers a range of benefits. Manufacturers are exempt from import tariffs and may attract tax and other incentives. In-market production brings manufacturers closer to their customers and reduces logistics and other administrative costs.&nbsp;<h3>New Markets Offer New Opportunities</h3>Of course, there are alternative strategic responses to protectionist policies.&nbsp;If they look carefully, exporters may find that there are other demand hotspots, which they’ve traditionally not explored. Rising incomes in so-called emerging markets mean there are millions of affluent consumers driving demand for a host of goods and services. And for new consumers for whom choice has been limited, imported goods—from fridges and fashion to whisky and wines—often hold great appeal as a symbol of their newly-minted status.&nbsp;Across Eurasia, the Belt and Road Initiative (BRI), the largest infrastructure plan on the planet, is rapidly opening up new trade routes by sea and overland. Some are long-lost connections that formed part of the ancient silk route. Others are new networks that form a part of what author Peter Frankopan has dubbed The New Silk Roads.Exploring new markets may offer a hedge against current uncertainty without requiring a fundamental shift in the business model. Other approaches require a greater pivot.As a growth strategy, it requires a different type of business model from the traditional activities of import/export. But, for brave and ambitious exporters who find barriers to trade appearing where in the past none existed, local establishments could be the answer to their prayers.

Global Economy Meltdown - More Than Just Tariffs

Podcast with Lars Jensen: Global Shipping Insights & Future Trends

The success of your sales efforts, go-to-market strategies, and new product launches is, to a large extent, dependent on how well you&rsquo;ve linked the different touch points of your supply chain &ndash; starting from procuring raw material to delivering the finished product to the right market at the right time.
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Logistics is the backbone of business; local or global. No business can succeed without effective and efficient logistics partners. How you select and manage your logistics service providers will impact the outcome of your carefully crafted business strategies.
More often than not, most companies identify and select logistics partners based on the cost of service projected by the potential service providers. A select few give importance to efficiency and base their vendor selection on this parameter alone.
While both cost and efficiency are important attributes of a logistics partner, neither can be looked at in isolation nor is it enough to base your vendor selection on only these two attributes.
What should one look for in a logistics partner? 
An ideal logistics partner is one who is invested in your organization&rsquo;s success as much as you are. The right partner should, along with optimal pricing and efficient service, also possess the following attributes:
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1. Technology:&nbsp;Supply chain is evolving. It is becoming digital, functionally inter-dependent, and highly complicated. One can no longer expect operational efficiencies by following age-old manual methods or by working in silos. Thus, when choosing a partner to lead your logistics function, it is imperative to bring on board a company that understands the importance of integrating different touch points in the supply chain and functions in a digital environment.
E.g. If you&rsquo;re looking for a transport provider, then check whether they offer multi-modal transport solutions? How do they take bookings? Do they offer a digital platform to book cargo loads? In case of road transport, ask if their carriers are equipped with GPS? For all modes of transport, find out if the company provides real-time cargo tracking?
Similarly, if you&rsquo;re looking for a warehouse partner, check if they have the latest equipment to handle inventory. Find out how they keep stock records. Ask if their system can be integrated with yours?
Another point that you must ascertain is the tech savviness of the team. Specially the team-on-the-ground. Is their team trained to work in a digital environment? Can they adapt to new systems and processes with ease?
If it is an end-to-end logistics management company that you want to partner with, then along with all the above aspects, you also need to understand how they integrate the various logistical functions within their organization and how their technology can be synchronised with your organization&rsquo;s processes and systems.
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2. Market Acumen:&nbsp;Right from the top management to the team that will handle the day-to-day activities for your organisation, should have an understanding of the industry and the market that you operate in. These insights will help them serve you better, which in turn will benefit your end customers.
3. Business Reach and Scale:&nbsp;Global is the new local. A logistics partner is a key contributor in ensuring that your products reach customers around the globe with minimum effort, on-time and in good (saleable) condition.
Scale of operations is another crucial aspect that you need to consider when partnering with a logistics service provider. Understand their business development plan. Will they be able to service your business growth? Can they manage sudden market-driven demand? If in the event they themselves do not possess the ability to cater to unplanned trade, do they have a network of trusted business partners who can provide the required support?
4. Business Ethics:&nbsp;Assume&nbsp;technology, systems, and processes are in place. The pricing is competitive and the team is stellar. Is this enough to appoint this organization as your business partner?
No. Given the important role that logistics plays in making your business successful, along with the operational efficiencies, you must also conduct due diligence on their work ethics and business practices. This goes beyond the regular credit and KYC checks.
Before signing on the dotted line, seek out the responses to the following questions - are their transactions and dealings transparent? Are they reliable? What is their reputation in the market? How do they treat their resources and manage their team? How do they manage their finances? Do they follow industry best practices? And, in case of transport providers &ndash; are they following the rules laid down for carriers and drivers?
It is necessary to carry out a hygiene check for business partners, because in the long run their reputation and standing in the market will affect yours too.
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5. Responsiveness to Business Needs:&nbsp;Customer service is another key factor that needs to be assessed before partnering with a logistics service provider.
Before you finalise on a vendor, find out if their customer service team is willing&nbsp;to go the extra mile to find the most optimum solutions for your business? Is the team proactive? Can they take ownership of the business process outsourced to them? Can they foresee problems and work on finding the most optimum solutions for your business?
A dedicated customer service team is necessary for ensuring successful management and execution of logistics plans.
Keep these key attributes in mind when you are looking to appoint a logistics partner. It will help you weed out partners that may not be in a position to offer you the logistical support you need to grow your business.
Reliability, transparency, and a dedicated customer success team is the hallmark of Cogoport!&nbsp;<a href="https://cogoport.com/signup">Register Now</a>&nbsp;to know more about how we can help you optimise your import and export logistics.

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