Cross-border logistics is becoming an increasingly prominent area of focus for brands operating in the internet age. The growth of ecommerce has brought U.S. companies to a global audience, but borderless business requires compliance with federal trade laws and regional regulations surrounding sustainability, worker rights and more.
“There’s a lot more expected of logistic service providers” today, said Amy Morgan, head of trade compliance at Altana Technologies at last week’s Manifest logistics conference. “If you’re a freight forwarder or a customs broker or 3PL, your customers might be clamoring for more help as all these new regulations are pushing cross border activity further upstream.” As cross-border business grows, agencies and regulatory groups “simply can’t keep up with the volume of trade activity, especially with ecommerce,” she added. “So they’re pushing more of that responsibility on to the service providers.”
Morgan said that these conditions have necessitated brand investment in tools and technology that provide “insights and automation” to help inform future decision-making. Altana allows users to map and manage global supply chains and automate functions like Harmonized System (HS) code classification, screening vendors and upstream suppliers for forced labor, and pre-clearing shipments through customs. The SaaS platform uses AI to speed up the flow of goods across borders and give brands multi-tier visibility into their supply chains, aiming to drive both efficiency and compliance.
“We’ve lost sight of our end-to-end supply chains,” Morgan said. Since World War II, U.S. companies have been “outsourcing and offshoring manufacturing in the spirit of increased progress, reduced costs, increased just-in-time efficiency, and all these great things,” she said. “That sounded like a great idea at the time, but over the past 75 years, those supply chains got so complicated.”
“We were no longer just buying from one party—that party was buying raw materials from another party, who’s maybe outsourcing their manufacturing to another party,” she added. “We no longer know exactly where goods are coming from or who is providing those inputs in this big web.”
AI holds the key to untangling it, she said. “We can now process the massive amount of data that is necessary in order to illuminate those multi-tier networks.” Meanwhile, machine learning models allow Altana to “reach deep inside that data, and pull out insights that can show us where we might have risks and opportunities.”
Having a bird’s eye view of the supply chain becomes more essential as companies look to forge sourcing relationships in new markets. Calling the growing interest in nearshoring “the return of regionalization,” Nuvocargo CEO and founder Deepak Chhugani said brands are “bringing supply chains closer to home, so that there’s a little bit more control and also diversification.”
As Mexico and other Latin American countries enter the spotlight, supply chains are undergoing a significant shift away from decades of Asia dominance. “You need to find partners that can help you navigate that,” he said. Nuvocargo, a virtual platform for cross-border trade between the U.S. and Mexico, provides freight forwarding, customs brokerage, cargo insurance and supply chain financing.
Chhugani said potential clients often question the sophistication of U.S.-Mexico cross-border commerce, because U.S.-Canada trade is relatively simple to navigate. “Anyone who has actually dealt with both understands that it’s extremely different,” he said. “There’s a lot more complexity when you’re dealing with an emerging market and a strongly contested border.” Meanwhile, companies must also manage customs, carriers and cross-docking, “and every time you deal with two countries, in two currencies, and two sets of laws.” Pair those challenges with fast-changing regulations, “and that complexity can compound and spiral out of control.”
Companies can use technology to avoid turbulence and gain “more visibility, more data, more transparency” into cross-border operations. Individual operators have traditionally functioned with an unhelpful degree of “opacity,” Chhugani added. “In the real world, you have dozens and dozens of parties involved in every single transaction… so there isn’t necessarily assurance that everyone is operating under the same standards, with the same shared data.”
The industry and all its players have been more reactive than proactive when it comes to adopting new technology and processes, Morgan added. “There’s a lot of waiting and seeing what’s going to happen”—whether new regulations will pass, and how customs will enforce them, for example. “I do believe that it’s going to become more proactive, organically,” she added. “It’s going to become compulsory to know more about your extended value and supply chains, and you’re going to have to know more about the business that you’re helping to facilitate.”