Supply Chain Expertise and Technology Blog by TMC, a division of C.H. Robinson

How to Drive Supply Chain Compliance and Efficiency through Global Control Towers®

How to Drive Supply Chain Compliance and Efficiency through Global Control Towers®.Connect


If you were asked to name the many functions performed by a supply chain’s global control tower, chances are that complying with international trade and tax regulations would not be top of your list.

Yet an important part of optimizing international supply chain networks—a primary global control tower function—is making sure that shippers fulfill relevant trade and tax requirements within every country touched by their multi-national supply chains.

Integral to supply chains

Regulatory compliance is not simply a question of making sure that you have the right documentation or avoiding legal penalties. There are various reasons why compliance is an important operational issue, too. For example:

  • Non-compliance can cause delays that disrupt supply chains.
  • Transgressors that get red-flagged by customs and tax authorities are more likely to be involved in time-consuming audits and inspections.
  • Trade and tax regulations can shape supply chains. A regulatory change can introduce costs that make it necessary to re-configure a supply chain. These factors also are important when planning supply chains; a freight network that makes sense operationally may not be viable from a taxation perspective.

A powerful ally

Global control towers are especially effective in a compliance role when shippers have to navigate different national taxation and trade regulation systems. Here are three key reasons why.

The global/local dynamic. One of the chief benefits of a global control tower is that it functions as a global logistics management system, while also providing the local expertise that shippers need to maximize the efficiency of international freight networks.

This global/local perspective is also critically important in compliance. Increasingly, shippers are looking to create a global infrastructure for import and export compliance that also allows them to meet local requirements.

Corruption avoidance. Another component of compliance that benefits greatly from the global/local approach is combating corruption. This is a major issue for companies that do business internationally as governments tighten their oversight of corrupt trade practices. Legislation, such as the Foreign Corrupt Practices Act in the United States, is putting trade transactions under more scrutiny and raising the cost of fines for transgressors.

A global control tower can help shippers keep an ear to the ground and be alert to corrupt practices that could compromise the integrity of their operations.

Managing complexity. Global supply chains are increasingly complex—and so are international tax and trade regulations. Legal frameworks can differ significantly from country to country and even from one province or state to another. Moreover, governments can introduce important revisions with little notice. These national and regional patchworks of regulation can be built into global control tower management systems, making it much easier for shippers to stay ahead of the regulatory curve.

Combined approach

International trade is as much about compliance and regulatory risk as it is about the efficiency of supply chain operations. A global control tower within your supply chain operations brings these challenges under one umbrella by marrying compliance with efficiency.

Click here to learn more about how a control tower can provide the visibility, agility, and expertise for a global supply chain network that encompasses multiple countries, currencies, modes of transportation, and more.

- Ben Bidwell, Director of U.S. Customs, C.H. Robinson