Challenges of globalization and compliance

Globalization is a good thing, overall, as it closes the gap between nations and allows us to get the most out of other countries, however, there are disadvantages, especially when it comes to logistics.

Globalization forces logistic companies to fulfill deliveries on time and achieve objectives while keeping costs under control.

There isn’t a standardized solution for everyone, as companies have different needs and challenges to address, but the fact remains that flexibility is necessary for the supply chain.

When it comes to compliance, logistics companies need to be one step ahead as global trade is constantly shifting and evolving, and so do compliance requirements that need to be observed.

A concrete change we can use to exemplify this is the plan to reform regulatory priorities proposed by the Federal Maritime Commission or the change in governance that affected the New York Shipping Exchange by forcing shippers to not leave less lucrative cargo in ports, which is positive, but its implementation comes with challenges.

Worldwide regulations call for full auditability and companies must be able to manage their data efficiently to comply with the requirements that call for audit trails.

If logistics companies are unable to provide all digital documentation, their trucks, ships, and goods could end up stranded in ports and docks for hours and days.

Stranded merchandise is not a good thing, as it comes with steep fines. For example, a rejected food shipment due to non-compliance ranges from $300 to 40,000 dollars.

On top of the fines, the collective cost of clogging ports is enormous as it results in delays that greatly disrupt the supply chain.

However, globalization comes with many advantages, such as the ability to share knowledge and culture, a greater talent pool, as companies can hire worldwide, and a diverse and enriching work environment, among others.

Overall, globalization brings more good things than bad, and as with everything, it comes with challenges that must be addressed, but by counting on collaborators from all over the world it is possible to come up with creative and impactful solutions.

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