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Top Strategies for Managing Export Administration & Costs
 

IOMA

From the January 2001 edition of Managing Exports

Export managers aiming to improve the management of their companies' export operations while controlling costs should target two areas for special attention: improving the accuracy and timeliness of shipping documentation, and changing or working more closely with freight forwarders. These are the clear conclusions of Caveat: Due diligence is even more crucial than with Agents or Distributors since success or failure is highly dependent on this single entity.

ME's just-completed survey of export professionals coast-to-coast, in which respondents were asked to pick their five most successful strategies of the year 2000 for administering a well-run and profitable export operation. Full survey results are in accompanying table.

Three Years in a Row

Significantly, this is the third consecutive ME annual survey in which these two strategies for success topped our poll█further confirming their importance. In this year's survey, 74% of respondents pick improving accuracy and timeliness of shipping documents as their number-one strategy (79.2% in 1999, 73.6% in 1998), while 72.3% choose working more closely with forwarders (79.9% in 1999, 74.8% in 1998).

These consistent results are not hard to account for. Over the last three years, quantum leaps in automation have helped export managers cut down on costly mistakes in document preparation. ME's survey results indicate that exporters continue to ¤go electronicË, taking advantage of these benefits as the software becomes ever more affordable and user-friendly. Export pros are also clearly continuing to take to heart the continued advice of experts in the trade to sift carefully through the forwarders you use, pick the handful that perform best, and then concentrate on building the best possible partnerships with them.

Other Strategies

These were hardly the only strategies poll respondents favor, however. Working more closely with the international sales department works best for 66.7% of respondents, while 56.5% are renegotiating shipping, freight, or insurance costs to maximize results█and the bottom line█for their companies. In another sign of the times, 48.6% utilize the Internet to increase department productivity, while for 40.1% of respondents, expanding or establishing new channels of international trade provides the best results.

Other respondents list the following as top strategy: 21.5% are improving the speed and rate of international collections, 17.5% are outsourcing functions to a 3PL or forwarder, 12.4% are utilizing new BXA automated systems (like LEAP electronic license application), and 10.7% are streamlining the international credit-application process. Since every exporter is unique, export pros should certainly not ignore these strategies that work best for smaller numbers of respondents.

While survey results at firms with under 500 employees follow the overall results remarkably closely, there are significant differences among exporters with over 500 employees. Most notably, the number-one strategy at the bigger companies is working with the international sales department, picked by 76.8% of those responding managers. This statistic, combined with the fact that fully 63% of managers at smaller companies also chose it as their top strategy indicates its overall importance. Turning to a second example, using the Internet to increase export department productivity is the strategy-of-choice for 60.7% of the pros at the large companies (compared with 40.7% at their smaller rivals)█a not unsurprising result given larger exporters' greater financial resources for purchasing top-drawer Internet-based systems.

Most Success Improving the Management of Your Export Administration and Costs

  Company Size
Strategy Less than 500 More than 500 Total
Improved accuracy/timeliness of shipping document 75.0% 67.9% 74.0%
Changed or worked more closely with freight forwards 70.4% 73.2% 72.3%
Worked more closely with international sales 63.0% 76.8% 66.7%
Renegotiated shipping/freight/insurance costs 57.4% 55.4% 56.5%
Used internet to increase department productivity 40.7% 60.7% 48.6%
Expanded or established new channels of international distribution 42.6% 42.9% 40.1%
Improved International collection rate and speed 23.1% 19.6% 21.5%
Outsourced various international logistic operations responsibilities to a 3PL or forwarder 19.4% 10.7% 17.5%
Used new BXA automated systems 10.2% 16.1% 12.4%
Streamlined international credit application process 11.1% 10.7% 10.7%

(Source: Managing Exports)

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