Pivoting your business for what’s next is generally a wise practice, and in times of an unprecedented global pandemic, keeping your import/export business moving is undoubtedly your number one concern. Trade is not halted, however, the impact from countries hard hit by COVID-19 is still reverberating around the globe. There is a backlog of all non-essential goods at ports. Given all the upheaval with border closures and travel restrictions, this is an enormous challenge for any business owner. Supply chains around the globe are impacted, and many businesses’ bottom lines have taken a hit.
According to Statistics Canada, Exports fell 29.7% to $32.7 billion in April 2020, the lowest level in more than 10 years. Imports were down 25.1% to $35.9 billion, a value not seen since February 2011. Consumer goods and cars are two sectors that have been impacted the most.
Social distancing and stay-at-home orders have left gaps in the market, and creative businesses are discovering ways to fill those gaps.
If your business is experiencing operational hurdles, you may need to change product offerings and services in the wake of COVID-19. If you’re clever, you may be able to find inventive ways to reassess the way you do business and stay connected with customers through it all.
What can you do to combat this crisis?
These are 4 Tips On Pivoting Your Import Business To Weather The Covid-19 Pandemic.
1. Communicate with your customers
Your customers need to know what’s going on. If you’re honest, they will appreciate that you are both in the same boat, trying to navigate this new normal, and at least you have connected on a human level. Customer feedback surveys are a good way for you to understand concerns and challenges. Meeting customers’ needs with honesty and transparency will go a long way toward retaining their business.
2. Communicate with your suppliers
Helping commerce move is a priority for all governments, but obviously, there are situations that are logistically impossible due to limited staff, border closures, and backed up shipments. Get a handle on what complications may be arising for your suppliers and if necessary, it may come down to invoking a force majure to protect yourself from contract obligations that can no longer be fulfilled. You may need to consult an attorney to navigate involved contract negotiations.
3. Reevaluate your supply chain
If your supply chain is impacted by countries hard hit by COVID-19, you must get creative with looking at different products, or different suppliers. Are there US partners that you can collaborate with to fill your orders?
Several businesses pivoted during the last several months by using their resources and factories to produce critical products or services in support of combatting the pandemic. There are distilleries that now manufacture hand sanitizer; clothing manufacturers who were able to fabricate cloth face masks, etc.
If there are food products you are unable to get, is there a way to turn to local farmers and producers who are now hard-hit due to restaurant closure? Maybe there is a win-win scenario where you can utilize local suppliers that need business, and they can help you fulfill orders to meet your customers’ needs.
If you need to renegotiate the contract with your supplier, be sure that any change in value is formalized before complications arise. Formalization in writing is best in these cases.
How can you continue importing products into Canada?
While restrictions have been placed on non-essential trips, the flow of commercial products has as of yet not been affected by COVID-19. Canadian customs authorities are currently still accepting shipments from overseas. As a matter of fact, the payment of taxes and duties has been deferred at this time.
4. Be as proactive as you can
Investigate whether there is any duty or tariff relief or extensions from CBP, USTR, etc. Reach-out to government contacts and stakeholder associations for updates on the global situation as it affects commerce.
Because the situation is changing every day, keep a close watch on international, federal, state, and local developments and global attempts to restrict the spread of the virus. Trade restrictions, border closings, shelter-in-place orders, and curfews are impacted, so make sure you and your staff are apprised of any changes.
If the complications of the last several months are making you realize you are overly-dependent on a global supply chain, you will now be forced to come up with solutions to prevent things like the COVID-19 pandemic from wreaking havoc on your business in the future. Therefore, you may think about changing your business model not just temporarily, but permanently.
Contact Export Development Canada (EDC)
From the EDC website: We are working with our federal partners and financial institutions to bring financial relief and support to Canadian companies through the Business Credit Availability Program (BCAP). We’re proud to assist businesses—both exporting and non-exporting—with expertise, insurance, and improved cash flow. Many of our solutions have been adjusted to meet today’s needs, including deferred fees, increased risk tolerance, and faster approvals.
Clearly, the global economy is having some growing pains, which will bring a new set of winners and losers. Pressure will increase on some companies to shift away from China, where land costs and growing wages have already caused some production to move to lower-wage countries such as Vietnam and Indonesia. Mexico is on the rise for companies targeting U.S. markets.
Here at BorderBuddy, we have navigated many global challenges and we are here to fully support and educate our customers during, and beyond, this COVID-19 disruption. Although there is no universal strategy, businesses that are creative, transparent, and nimble will find new ways to stay relevant and profitable, and we can help you navigate this changing landscape. When all of this is in the rearview mirror, your business may look different than when it started. If adversity creates character, you have persevered, learned some lessons, and possibly even a stronger business model going forward.
Give BorderBuddy a call to help you come up with customs solutions today