The COVID-19 crisis has reshaped the global economy and has shown the world how vulnerable world trade and global supply chains can be. It has become evident that conditions that prevailed pre-pandemic are not going to work anymore in the new normal. Subsequently, the new normal will require supply chain leaders to reset their strategies and establish solutions that will build resilience in their supply chain network going forward.

Businesses will have to face these new-normal foreign trade scenarios:

Global value chain reconfiguration

The over-reliance on a single nation or a few key suppliers has caused major problems during the pandemic. To reduce further risks from global exposure, many companies are thinking of diversifying their sourcing with new local and regional suppliers. This arrangement can shorten supply chains as well as reduce transit and customs clearance times.

Logistics and transportation disruptions

The pandemic has caused costly delays due to travel restrictions and border closures. Many logistics providers and freight forwarders also suffered reduced business hours due to lockdowns and social distancing protocols. Logistics companies experiencing operational constraints are likely to sustain delivery delays, congestion, and higher freight costs

New trade restrictions and agreements

The effect of the pandemic brought on new customs and international trade compliance and management measures. There are also talks of imposing additional customs duties caused by pressure to increase revenue. Moreover, in some countries, exports of essential goods are put under restraints such as outright bans, export quotas, and export license requirements.

New sustainability issues

The goal is to decarbonize the global economy to mitigate the effects of climate change - and the agenda is to reduce the global greenhouse-gas emissions to net-zero by 2050.

Governments and business leaders have now realized that responding to COVID-19 and addressing sustainability issues can go hand-in-hand by aligning their policies to this agenda. But the introduction of a differently designed Carbon Border Adjustment Mechanism (CBAM) might lead to severe distortions in the international trading system and inhibit efforts to mitigate climate change.

Digital trade implications

The pandemic has accelerated supply chains’ digital transformation, with companies leaning toward adopting digital trade. Also, the implication of a smarter border—minimized physical customs and border formalities by electronically transacting before and after the goods cross a border—is already gaining ground in several governments.

Adopting a digital supply chain in the new normal can significantly enhance trade facilitation, streamline border procedures, and boost transparency for trade. But, to thrive in the new normal, it is not enough to just embrace digital transformation; foreign traders should innovate their international trade management strategies and approaches.

Use a next-generation foreign trade solution engineered by a reputable vendor.

SAP’s proven on-premises and cloud solutions can help address businesses’ unique foreign trade challenges:

Ropaar has been helping companies transform their supply chains into an intelligent value chain. Part of our TradeBlazer’s Approach is helping businesses determine the right mix of digital solutions to address unique foreign trade problems

We help our clients accelerate time-to-value and maximize their SAP investments by ensuring that the implementation project is aligned to their specific foreign trade goals and overall business objectives, simplifying the integration of SAP solutions with their existing on-premises and cloud infrastructure, and providing training to ensure high user adoption and successful change management.

Let Ropaar help you integrate these SAP solutions into your arsenal so you can thrive in the new normal. Request a demo today!