International trade is complex because it is a combination of several agreements and contracts such as the contract of sale, transport, insurance, financing. At the border, a mis-alignement between these contracts can trigger a Customs enquiry, a confusion or a dispute between the parties. This, in turn, results in delay, exchange of emails, internal tensions, escalation of the dispute and finally additional costs.
The transaction:
A multi-award winning SME won a contract with multinational and quickly started struggling with Customs regulations in several countries. Each shipment was subject to delays and disruptions causing tensions with the customer. The SME asked Alegrant to diagnose the source of the delays and provide advice to resolve the problem. By performing an analysis of their transactions, we identified a conflict between the contractual terms of trade (Incoterms), their transport contract and their internal logistics processes.
The solution: Training the team
We suggested a training. The company had a sales team focused on growing their international business, however, they lacked the understanding of mechanisms and regulations behind a cross-border transactions. This resulted in disjointed transactions and too much duty being paid. In practice, it showed in chaotic movements of goods which is often the symptom of a need for training. The logistics team had attended trainings. However, the courses were general and they were struggling to translate the learning into the business.
The implementation: Alegrant’s experts in action
We designed a bespoke training course. It was specific to their products, their business practices, the countries where they trade, their type of contractual agreements. We delivered the training to the teams from sales, logistics, administration, purchasing and finance. The objective was to ensure that all departments are aware of their responsibilities in an international transaction. This equipped the sales team for a discussion with the customer resulting in a change of the terms.
We also delivered a new global trade policy with our “plug & play” Customs processes, procedures and checklists to introduce controls. This resulted in flawless cross-border transactions. The sales team is now confident that their global ambition is supported by first class operations.
Additional ressources
For help, contact us: info@alegrant.com.