Export Management Benchmark Study:
Initiative and Action? Reform, NEI, Best Practices and Technology
Executive Summary
American Shipper, in partnership with BPE, surveyed nearly 500 U.S.-based exporters on export regulatory reform, the National Export Initiative, management practices, organizational structure and export management technology. This study, conducted from July 27 through Aug. 15, included 35 questions intended to gauge the industry's understanding of these issues and the best path forward.
Qualified survey participants include a cross section of U.S. exporters such as third-party logistics providers/intermediaries (37 percent), process and discrete manufacturers (27 and 14 percent, respectively) and retail/wholesale (12 percent). Raw materials, commodities, construction and engineering are presented as one group ('other') representing 9 percent of the total response. Small, medium and large companies were represented nearly equally.
Export Control Reform. Past reforms proposed by the Obama administration have put unprecedented attention on the export industry, but to date the White House-led export control reform process has been closed to the public.
We do know that this reform initiative includes four key principals:
' Single control list.
' Single primary enforcement agency.
' Single IT system.
' Single licensing agency.
The industry clearly supports the need for an overhaul to the current regulatory environment. Nearly 75 percent of respondents say they want a single combined export regulation; only 7 percent said they disagreed. When asked to rate the importance of each principal change, respondents illustrated that all are nearly equal in importance.
However, survey respondents appear to be unaware of the specifics related to export reform and the impacts of the changes planned. Several questions related to specific reform initiatives were met with responses of 'uncertain,' demonstrating a lack of understanding of the details behind the reform efforts.
National Export Initiative. NEI is the Obama administration's program to improve conditions that directly affect the private sector's ability to export. This study clearly demonstrates that industry is far from convinced these programs can really impact their business prospects. Fifty-six percent of respondents said the program would have no impact and another 36 percent believe they will see an increase of less than one quarter. No respondent supported the president's goal of a 100 percent increase.
Lack of awareness ' or perhaps interest ' appears to be the culprit once again. Few companies polled participate in trade missions organized to boost trade, and fewer leverage export assistance programs provided by the federal government. Surprisingly less than half or respondents felt they would participate in these program if presented with the opportunity.
Export Operations. Export compliance is widely seen as a function of transportation or operations. Nearly 75 percent of respondents say they report to those groups while 27 percent of respondents report to legal in some fashion. Large companies are significantly more likely to have compliance report to legal than their smaller peers, although compliance is still closely tied to transportation. Surprisingly, large companies are also more likely to include their export compliance practitioners in strategic discussions related to mergers, acquisitions and divestitures.
With the exception of Automated Export System filings, outsourcing of export compliance functions remains limited. More than half of companies polled do not outsource and another 31 percent outsource less than one quarter of their export compliance activities.
Export Management Systems. Only 23 percent of survey respondents categorize their export management platform as entirely manual or spreadsheet based. Another 41 percent of these exporters are using a platform they consider a mix or hybrid approach to managing this function. Roughly 30 percent manage their exports using a systems-based approach.
Systems investments are clearly impacted by the nature of the exporter's product. Companies whose products are subject to International Traffic in Arms Regulations (ITAR) are noticeably more likely to leverage a system of some sort and considerably less interested in a manual or hybrid approach.
Survey respondents consider export systems a strategic investment by a very convincing margin. Roughly 70 percent of respondents agree or strongly agree that this is the case. Again the argument for systems investments becomes even clearer when products governed by ITAR come into play. Nearly 80 percent of ITAR exporters agree or strongly agree whereas only 8 percent disagree to any extent.
