ED 47: January-February 2013

Consider all that is involved with going global.
How will the goods land on a customer’s
doorstep on the other side of the world?
How can a small business maintain a strong
cash position when goods could be in transit
for days or weeks, not to mention keep up
with fluctuating currency conversion rates?
What about learning trade laws and clearing
customs? And how they do they establish
and build relationships with foreign trade
partners?
Expanding overseas can seem daunting
because of these uncertainties. However,
with an efficient and reliable third party
logistics (3PL) partner, SMEs in Singapore can
avoid some of the potential pitfalls. Shipping
is just one component of getting your goods
to market in other countries. A continued
trend is being observed for a complete
range of end-to-end solutions, beyond the
traditional capabilities of warehousing and
transportation. Companies are turning to
their logistics suppliers not just for these
“standard” services, but also for expert
advice and intelligence on target markets.
Many SMEs view partnering a capable
logistics partner with a broad geographical
footprint as a strategic way to gain a deep
understanding of foreign markets, explore
expansion opportunities and maximise free
trade zones.
Having identified target markets for export or
import, it is also important to know the rules.
There are customs, trade and shipping laws
that come into play. These can vary greatly
from one country to the next, and these
laws will not only govern how your shipment
is received but are specific to the type of
product you are sending.
Confusing customs regulations, duties, and
taxes can be a real barrier to SMEs accessing
global markets. Something as simple as
labeling a product as a ‘sample’ – without
detailing what it is a sample of – can result in
goods being held at customs and potential
financial penalties or losses. This is why it
is important for SMEs to thoroughly research
customs requirements, duties, processing
times and potential risks they would face
when shipping to a particular market, or to
engage customs brokers who can take this
on for them. Automating customs processes
by using online tools to process shipment
Co m m E n ta r y
documentation and developing databases
with commodity information is also a good
way of reducing the administrative burden on
an SME’s logistics department (if they have
the luxury of employing one), as well as the
error rate and the speed in which their goods
are processed at the border.
At the same time, challenging and complex
customs rules and regulations also present
opportunities for trade development. Every
country has its own unique customs ‘quirks’
which can make international trade a
minefield for SMEs lacking in-house logistics
expertise. Opportunities exist for local SMEs
in the electronics, oil & energy, aerospace
and life sciences industries in particular,
with South-East Asian markets and the
broader Asia-Pacific region presenting
significant opportunities. Logistics providers
also work closely with local associations
and government agencies to reach out to
budding SMEs in Singapore who are looking
to expanding their business overseas.
Logistics also has a large role to play in
optimising an SME’s cash flow situation,
particularly when it comes to shipping
internationally. Minor adjustments to a
company’s management of its own inventory
can free up significant and much needed cash
flow to cover other essential operations. For
instance, the innovative use of time definite
delivery services has allowed companies to
grow through offering very high service levels
(i.e. a very short product delivery cycle or a
quick repair process), with little need to tie up
working capital in buffer inventory or inventory
in transit.
The possibilities opened up by new
technologies, the internet, and modern
transportation mean that there are myriad
overseas trade opportunities out there for
Singaporean businesses. With thorough
research and a well-defined logistics strategy,
SMEs can successfully expand into new
markets, compete with larger companies,
and use their size to their own advantage.
herbert vongpusanachai
Managing Director
Dhl express Singapore
Ja n | FE b 2013
En t r E p r E n E u r s’ Di g E s t
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