SAP and FedEx Trade Networks inked an agreement to more tightly integrate the SAP Global Trade Services (GTS) module with the trade information available from FedEx. SAP gets real-time access to current trade information and rates while FedEx gets access to the large SAP installed base. The biggest winners in the agreement, however, may be SAP users.
The Bottom Line: With FedEx included, SAP GTS customers gain improved trade compliance, lower duty costs, and the ability to analyze landed cost options when sourcing.
What It Means
- National security demands even greater scrutiny of international trade. Administratively, the task is becoming onerous for companies in the number of regulatory requirements and the frequency of changes. The Takeaway: By linking with a centralized information source like FedEx Trade Networks, SAP GTS users can lower the cost and improve the timeliness of trade compliance.
- Product classifications for the purpose of understanding duty obligations are always clear. Companies can have as much as 30% of their inbound and outbound traffic suboptimally classified. Again, access to centralized information can assist traffic managers in making better classification decisions. The Takeaway: Access to current information from within logistic processes can substantially (and legally) reduce the amount of duty that companies pay.
- Landed costs can be better considered. Too often, supply decisions are made solely on the unit price of the item being purchased, with little consideration of inbound costs. The Takeaway: Current and integrated trade information will allow companies to make sourcing decisions based on landed cost.
This is a good deal for all parties, particularly SAP customers. With national security and costs becoming increasingly burdensome and important, any help to ease the process is welcome.
AMR Research originally published this article on 29 April 2004.