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Since the pandemic and the subsequent lockdowns, the global supply chain has been greatly impacted. The lockdown of Shanghai, China's most important commercial city, was extended in early April without a set end date while government officials reviewed city-wide results. The town has been severely impacted by the Omicron wave, which has been described as China's most severe since the COVID-19 outbreak in late 2019.

A Deepening Crisis

A new wave of asymptomatic infections prompted the Chinese government to declare a phased lockdown of Shanghai, the country's most populous city, in March. The lockdown was extended on April 5th due to the high number of positive cases recorded the day before. This indefinite lockdown extension put additional strain on the global supply chain as logistics providers struggled to get trucks into and out of the major port city.

According to a Fitch rating research, “China’s latest lockdown threatens to intensify global supply chain disruption and push up elevated shipping rates and input costs.” It also states that freight traffic volume in the Shanghai metropolitan area plunged in early April and remains 80% below what it was in late March because of the lockdown extension.

It is noteworthy that Shanghai handles a fifth of China’s port volumes, and China accounts for 15% of global merchandise exports. Since the lockdown, Tesla had shut down its Giga factory, which produces about 2,000 electric cars a day, on March 28th. Over 30 Taiwanese electronic manufacturers closed their factories near Shanghai in early April. This disruption in production has heightened risks for China’s slowing economy.

Impacts Beyond Shanghai

China’s strict COVID-19 lockdowns are disrupting the supply chains of everything from raw materials to manufactured goods. Due to Shanghai’s status and role in global trade, the lockdown would have severe implications for the rest of the world.

In fact, Shanghai and the regions near it are home to the most significant manufacturing hubs. These hubs rely on essential inputs that arrive through the Shanghai port, where they export finished products.

Disruption in the operations of these manufacturers means that the supply of critical goods will be hampered. Despite the fact that authorities claim the Shanghai port has remained operational thanks to a so-called closed-loop system in which workers remain on-site, ships have piled up outside the port. This situation has slowed down the recovery of the global supply chain from the pandemic's effects over the last two years.

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You have most likely heard the term "low-interest-rate environment." If you haven’t already, take a look at your savings account. You get almost no interest on your money anymore, and in many cases, you have to pay your bank to deposit it.

Since the 2008 financial crisis, interest rates have been extremely low. But that is beginning to change as the Federal Reserve seeks to combat rising inflation. Rising interest rates are a key monetary policy tool for combating inflation.

What Does It Mean for SMEs?

Rising interest rates mean mostly two things: you can earn more interest on your cash balance again. However, you shouldn’t get your hopes up. Given the current rate of inflation, real interest rates – meaning your interest after inflation – will still remain negative even if rates rise.

Secondly, you will have to pay higher rates on your loans. Higher financing costs in financial markets mean banks will also increase their loan rates. As a result, borrowing costs for businesses will rise.

Rates Won’t Skyrocket

The effect of rising rates will likely be negative for most SMEs as well. Small businesses typically don’t have much cash lying around, so the impact of higher rates on that cash will be insignificant.

On the other hand, loans are still a prime source of financing for most SMEs, meaning the higher cost will hit SMEs.

With all that said, rates are still historically low. The recent rise has been significant, but it has not changed anything in the low interest-rate environment. It is also unlikely that central banks will overdo it, as increased government and private debt levels limit their ability to
raise rates.

Long story short: SMEs don’t need to sweat rising rates. If you need financing, it could be clever to get a loan now, considering that rates will likely rise more. Otherwise, don’t worry about it; rates won’t skyrocket. The much bigger concern is inflation.

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The COVID-19 pandemic has altered how people do business and how consumers pay for goods and services. As online sales increased, it became necessary to understand which payment methods customers preferred. Many businesses used the internet to reach customers during lockdowns. Payment trends have thus been boosted in recent times as businesses adapt to societal change.

​ Financial Services Are Changing Consumer Purchasing Habits
​
Customers are increasingly gaining access to payment features that are more user-friendly and quicker to use as financial services become more digital. For example, the Payment Services Directive Two, or PSD2, has significantly improved the purchasing experience of European customers. PSD2 aided businesses in adopting online banking tools, and it strengthened online shopping security. Businesses can now use third-party providers to provide secure banking services and convenience.

Some companies offer tools that can help businesses run efficiently, and the tools allow businesses to accept payments in different currencies from across Europe. This creates one financial system that has all major payments available in one place. E-commerce businesses no longer have to connect to each financial system separately or, in search of more options, connect with different acquirers.

​ Popular Payment Methods in Different European Countries

In Germany, open invoices remain the top payment method of choice followed by Visa, Mastercard, and cash in advance options. Digital wallets such as Giropay, paydirekt, Sofort, Apple Pay, and Girocard are common but not highly popular. Meanwhile, in Spain, the most popular payment method of choice is both debit and credit cards while digital wallets come in second. However, in France, online payment methods have dominated the payment world. Carte Bleue, France's national card, is at the top of the list of cards used for online payment followed by Visa and American Express. On the other hand, digital wallets aren't commonly used for e-commerce purchases.

For Italians, credit cards, debit cards, and digital wallets are currently at the top of the list of popular payment methods. In the Netherlands, iDeal, an online form of payment, is popular, with digital wallets and cards coming in second place. While in Romania, contactless cards uses have increased as cash payment decreased during the pandemic. Additionally, cash-on-delivery also remains popular.

In Finland, bank transfers, digital wallets, and cards are popular forms of payment among consumers. In Poland, bank transfers and cash-on-delivery payment use remains high with debit and credit card as well as digital wallets being less preferred by Polish consumers. Swedes prefer digital wallets, invoices, and cards for payment.

E-Commerce and the Overall Preferred Method of Payment

The pandemic has altered the way business is conducted online. Debit and credit cards continue to be the most popular payment methods in many European countries. As consumers adjust to living with the Covid-19 virus, e-commerce businesses are developing new, better, and safer methods for consumers to make online purchases.

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There are two types of online meetings: informal and formal. So, what exactly is the difference between the two?

Informal Online Meetings

Your daily video calls with colleagues, clients, or friends are examples of non-formal online meetings. It is just a call where you talk about something without a specific set of agenda, whether casually or professionally. There is no requirement to adhere to any formal procedures.

Formal Online Meetings

On the other hand, formal online meetings are any meetings that need to follow formal procedures. This includes shareholder assemblies, where the company's bylaws specify the exact procedure. There will be a set agenda and certain people must attend; formal invitations must also be sent out and formal elections must be held.

So, Will Formal Meetings Go Fully Digital?

Prior to the COVID-19 pandemic, it was a must for all formal meetings to be held offline. An online shareholders assembly was unheard of. However, this has changed during the pandemic. Because offline meetings became increasingly difficult and dangerous, businesses were forced to seek online solutions.

Even though the pandemic is now in its final stages, companies and other organizations have already discovered the benefits of online meetings for formal proceedings. Laws have been amended to make formal online meetings legally secure, and tech providers have developed software solutions to make them technically feasible.

So, to answer the question, yes, formal meetings have already gone digital!

But Will They Remain Digital?

That is the current big question. But the advantages of holding formal online meetings are significant. Therefore, it is likely that even after the pandemic is over, hybrid solutions will become the norm, meaning there will be both online and offline meetings, and participants and employees may be abe to decide whether they want to be physically present or dial in online.

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One significant problem HR managers in the logistics industry face is the inability to attract and keep talent. As more people resort to shopping online, there has been an increase in demand for logistics services, and companies have to work hard to meet their customers' needs efficiently. To do this, they need skilled personnel.

Hiring skilled, competent, and experienced workers is not an easy task. Experts say changing demographics like aging, retirement, border controls, and immigration limits are behind this trend. Another factor is the skills gap. While older workers are retiring, young people are not lining up for jobs in the logistics industry.

Here are some strategies for using software to attract top talent in the logistics industry:

Recruitment Solutions for Quality Candidates

The recruitment process has depended on legacy systems for a long time. This entails advertising open positions followed by a shortlist, interview, final selection, and onboarding. This method is both time-consuming and costly. With new recruitment software solutions, many of the tasks in the recruitment process can be automated.

A good recruitment software provides the manager with higher-quality job posting and distribution tools, advanced search capabilities for the right candidate, Applicant Tracking Systems (ATS), and third-party integrations such as Candidate Relationship Management (CRM) to nurture relationships.

These solutions help HR save time and focus on other tasks.

Using Candidate Relationship Management Systems

Keeping talents is as important as attracting them. Therefore, HR has a vital role in retaining workers by constantly engaging with them and ensuring they have a pleasant work experience.

Investing in candidate relationship management systems can make this task easy and effective. This software helps manage talents right from the recruitment stage by ATS and CRM to aggregate each candidate's information. HR can then use the information to personalize communication and engagement with each candidate. This also helps HR with data that provides insight into the effectiveness of their recruitment process.

Talent Search and Matching Solutions

Using online recruitment software can prove even more effective by searching for more platforms for suitable candidates.

The talent matching software can focus on experience level, education, and industry knowledge to narrow down suitable candidates. It ensures the right person fills the job position by focusing on the skills required for the work.

Better Candidate Experience during Recruitment

Employers in the logistics industry must also improve the candidate experience during the recruitment process. For example, a candidate may interpret a lengthy wait for feedback as a lack of interest in them and move on to other opportunities.

Candidate relationship management solutions can help to ensure continuous communication by using automation. Recruitment software can also expose existing talents in the company by matching potential candidates in the company's database to open positions. The opportunity for an existing employee to move into a new position that is better suited to their qualifications can also motivate employees to deliver better in their jobs.

Logistics companies that invest in intelligent recruitment solutions can thus gain a competitive advantage while also improving the candidate experience.

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As more and more people turn to blockchain, governments around the world are facing certain difficulties that must be addressed before blockchain becomes the default. Here are the top three challenges confronting governments today:

The Lack of Knowledge on Blockchain

Many government officials are unaware of how websites are built and maintained. Because blockchain is a new technology, many of the skills required to run sites using blockchain are in short supply. The cost of training employees and implementing blockchain technology may be more than most government budgets can afford. The arrival of the Covid-19 pandemic has caused many governments to tighten their budgets even more, making building a blockchain-based site even more out of reach.

Replacing or Adapting Current Systems to Blockchain Can Be Difficult

Blockchain may be difficult to replace or adapt to because there is a need for widespread adoption of the technology for it to be effective. Due to the inability of businesses such as banks and other industries to replace their current technology with blockchain technology, governments may not be able to implement the technology effectively. Currently, only 29% of organizations are willing to try blockchain or fully implement it.

As organizations begin to cooperate with each other to address the hardships of replacing or adapting current systems to blockchain, some solutions have been and will continue to be developed. The partnership between organizations allows for the free flow of ideas and solutions.

During the pandemic, some organizations that have adopted the use of blockchain found that they were able to track package shipments more efficiently, which helped to not only reduce the use of paper logs but also secure the supply chain for their products and services and ensure security for their data.

Governments Lack Trust in Blockchain

While some organizations have been at the forefront of blockchain adoption and use, many governments still lack trust in the technology. Within the lack of trust issues, there are two sub-issues that must be addressed: the lack of trust in the security of blockchain and organizations that may not trust other organizations on a blockchain network.

Even though every transaction made on blockchain is secure and private as well as verified, due to the decentralized nature of blockchain, there is no central authority that can validate and verify the transactions. The consensus algorithms which drive the common agreement about the present state of the ledger distribution for the entire network are the central part of blockchain technology. This central part makes sure that for every new block added to the ledger, the new block is the only version of the truth that is agreed upon by all nodes within the blockchain. However, businesses are unable to trust this central part. They prefer to put their trust in a private blockchain where the users are all known. To build trust among businesses who are just starting to adopt blockchain, one solution was developed, which shows how peers and competitors could work together to find a solution to shared challenges. Rather than using anonymous public blockchains, some businesses are turning to private blockchains, in which members are identified by cryptographic identities and are known to the private blockchain network. Therefore, those using cryptographic identities can access the permissioned blockchain technology, which offers privacy, traceability, and immutability of important documents.

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Technology has put trading in stocks, shares, commodities, currencies, cryptocurrencies, and even NFTs in the hands of millions of people all over the world, allowing them to trade at speeds that were unthinkable just a few decades ago.

The Good, the Bad, and the Pragmatic

While technology allows for unprecedented access, it also introduces risks for online traders who are putting their hard-earned money on the line in order to make a profit. The stock market necessitates a certain level of education and commitment, which may be lacking for people who work other jobs from which they obtain the capital to invest.

This is where the first risk comes in. Trading is all about making decisions, and the quality of your decisions is determined by the amount of information you can gather and process. This must happen in a very short period of time, which for most people means reducing it to pure speculation or wishful gambling. When that gamble is preceded by a string of lucky wins or riding a winning wave, traders may believe they're in good shape until the bubble bursts and they're forced to face reality.

Social Trading and Copy Investing

Many traders who recognize the information gap try to avoid it by engaging in social and copy trading. This occurs on trading platforms such as e-Toro, where traders share information or simply replicate the trades of the most successful traders. While this may work, it is important to note that those trades reflect the expert trader's interests and intentions, which may not always align with the copier's long-term goals.

Some might appear genuine but you simply cannot tell if someone is just hyping a particular stock to cash in when it benefits them. Judging the real value of a trade against the hype or the crowd value is something online traders have to watch out for all the time.

Addiction, Security, and Understanding Risk

There's also the risk that, because online trading has become so simple, its gamification exploits the instinctive part of our brains that prefers instant gratification over long-term planning and investing. For some, it can become addictive, leading them to risk more than they can afford to lose. These are in addition to the security risks associated with online trading. Scams, identity theft, and privacy violations can all have a negative impact on traders.

Picking stocks is not for everyone, yet it’s still possible to make thoughtful investments that take advantage of the modern tools that are available to us, especially when the entry level is really low. It’s wise to look at your needs at every stage and make the appropriate decisions. Having a broker who makes the decisions for you for a fee is always an option.

Risk Management through EFTs

Traders can also invest in exchange-traded funds (EFTs), which are baskets of securities or combinations of assets that track a specific index such as the S&P 500 Index. These indices may not have high returns because they average the market, but they allow you to diversify your investments and earn on a consistent basis. Mutual funds can also be used as a precautionary measure. If you have the stomach for it, investing in value stocks is still the best long-term security option.

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The maritime shipping industry's supply chain has undergone a massive transformation as a result of mining big data to provide real-time information that reduces margins of error in decision-making and streamlines vessel and cargo movement.

According to the International Maritime Organization (IMO), the maritime shipping industry moves approximately 90% of global trade volume. This large volume of trading within the industry places pressure on its stakeholders, including shipping companies, to keep a strict schedule, protect their vessels and crew, and maintain profitability. Because ports and vessels are frequently subject to the whims of nature, movement is more difficult to predict because the industry relies on a complex transportation system.

In essence, maritime stakeholders are adopting technology that will provide the industry with a strong digital infrastructure. Open source intelligence has provided tools such as MarineTraffic, VesselFinder, and more over the years. These tools aid in tracking ship and vessel movement through the Strait of Hormuz to the world's 835 seaports and inland ports. Port operators have also gone digital, embracing port automation via smart ports.

Furthermore, the convergence of information technology (IT) and operational technology (OT) onboard ships has altered the future of the maritime and shipping industries. According to Global Trade, big data has become an important part of the maritime shipping industry, aiding in the consolidation of digitization. Big data tools analyze and provide real-time data that can be used to make sound decisions.

Is Real-Time Information Transforming Ports and Maritime Transport?

Data technology is being used to manage ship arrivals, loading, offloading, berthing, turnaround time, and emergencies onboard ships and at port control towers. As a result, real-time information assists captains in planning their routes and speeds, and this is where real-time tools come in handy. When vessel operators are aware of current ocean and weather conditions, or have access to real-time sea state observations (currents, waves, and swell), they can re-route or chart a new course for their ship.

With real-time data, port operations and supply chains are becoming more efficient. For example, shipping companies and vessel owners can use tools like shipfinder and VesselFinder to track the location of their containers and ships through GPS, IMO numbers, and RFID tags.

In September 2021, the Port of Gothenburg in Sweden launched Allberth, a smart device developed by Awake AI that is being used to identify open berths at the port. Also, the Dynamic Under Keel Clearance (DUKC) system is a guidance system for maneuvering very large ships using “near real-time data, other variables including the height of tide, the speed of the ship, the ship’s maneuverability, tidal streams and the dynamic motions of the vessel.” This system is currently used in multiple ports to provide tanker and deep drafter container captains with safe ways to navigate turbulent water currents.

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Integrating 3D and augmented reality (AR) into a website is becoming increasingly important in boosting brand loyalty and customer engagement. In fact, more than 70% of customers today expect their service providers to provide an AR shopping experience. Retailers should thus use digital technologies as a liaison throughout the consumer's purchasing journey to attract new customers and retain existing ones.
 
AR Is a Critical Component

The pandemic has revolutionized the way people shop, with many people shunning physical stores. Recent studies suggest that customers have developed a fear of touching products physically.

As a result, allowing customers to digitally analyze items via AR has become a must. Nonetheless, a large number of brands are struggling to create the ideal interactive and virtual content. When implementing AR, brands should consider the following approaches:
 
Using Social Commerce to Recreate the Store of the Future

A brand can use various methods to build engaging shopping experiences, not only to reach a new, wider audience but also to obtain sales virtually. The overall objective is to provide an in-store or virtual experience and a physical exhibition that boosts consumer engagement.

For example, Ray-Ban, a premium eyewear firm is integrating try-on capabilities on Instagram. Moreover, the brand has collaborated with Facebook to release its inaugural pair of smart glasses. They then generated Ray-Ban Stories, giving customers the liberty to capture videos and images without pulling their phones out.

Customers can also capture photos and video footage and upload them on their social media platforms with the help of Facebook View. Currently, various brands are integrating AR in their websites directly to help customers visualize products before purchasing. 

Leveraging AR and 3D to Accelerate E-Commerce

Many retailers today are still finding their way to new technology. Apart from the high costs, they are facing many other challenges. For instance, developing 3D product models requires a professional to create a digital model first, which can be costly. However, advanced technology where numerous product images are captured from various angles to develop a virtual model could reduce 3D modeling budgets significantly and accelerate a complex process.

Such models are engaging strategies that allow customers to envision products. Customers can visualize products in their physical environment and have an engaging experience when AR is integrated.
 
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Cryptocurrencies have become a popular payment alternative online, as many users have found it easier and safer to use than government-issued currencies. As more and more consumers turn to cryptocurrencies for their payment needs, companies like PayPal have seen the benefits of accepting crypto payments.

PayPal Supports Crypto Payments

PayPal has recently decided to support cryptocurrencies, giving its users the ability to buy, sell, and hold cryptocurrencies such as Litecoin, Bitcoin, Ethereum, and Bitcoin Cash on its platform. Soon, users who have cryptocurrencies will be able to use crypto payments to shop for products or services.

PayPal's new payment option called "Checkout with Crypto" will be available for its consumers when online shopping. Buyers will be able to select their preferred cryptocurrency while they are checking out. They will be able to see the up-to-date conversion rate between cryptocurrencies and fiat currencies such as US dollars, Euros, and British pounds.

PayPal will convert the amount of cryptocurrency needed to complete the purchase right on its platform. Once the sale is completed, the sellers will receive the cryptocurrency without having to worry about any additional fees for the transaction. The “Checkout with Crypto” feature will be available worldwide for millions of businesses.

PayPal Attempts to Mainstream Cryptocurrency

Because cryptocurrency has the potential for greater profit, companies are starting to accept cryptocurrencies as payment for their products or services both online and offline. PayPal has become one of the largest mainstream financial companies to provide its customers with access to cryptocurrencies for payment. PayPal currently has over 400 million active accounts worldwide.

In a statement, Dan Schulman, the CEO of PayPal said, “as the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet.”

Schulman believes that the ability to use cryptocurrencies to shop globally and make purchases will be the next chapter which will lead to more people accepting digital currencies and cryptocurrencies becoming more common.

PayPal Does Not Support Digital Wallets

One drawback of PayPal's "Checkout with Crypto" is that digital wallets do not work with PayPal. Therefore, shoppers who would like to use PayPal's "Checkout with Crypto" and already own Bitcoin or other cryptocurrencies will not be able to transfer the cryptocurrency to their PayPal account. To successfully use "Checkout with Crypto," users will have to buy their cryptocurrency using their PayPal account rather than a digital wallet.

While PayPal's acceptance of crypto payments has brought cryptocurrencies more into the mainstream, they are still decentralized systems with no official government oversight, making regulation difficult. Some registered companies that have dealt with cryptocurrencies have found themselves under increasing government scrutiny. However, as cryptocurrencies move into the mainstream, many people believe that they will someday replace fiat currencies because they provide inflation protection, anonymity, and low fees for large payments.

Many cryptocurrency supporters thus see PayPal's "Checkout with Crypto" as a step in the right direction toward greater global acceptance of digital currencies.

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Justin Trudeau, Canada's Prime Minister, has announced that he would be initiating a vaccine mandate for truck drivers crossing the Canada-US border. Truckers will now be required to have been vaccinated against Covid-19 to enter Canada. The new mandate, which began at the beginning of January, has come under criticism from those who believe the mandate will exacerbate the current issues the trucking industry faces due to trucker shortages and the pandemic.

Truckers Must Show Proof of Vaccination

From January 15th, truckers entering Canada from the US had to show proof of Covid-19 vaccination at borders after a policy bestowing vaccine exemptions for essential workers was revoked. Now, Canadians who have not been vaccinated are required to take a Covid-19 test and go into isolation upon reentering the country while US citizens are being turned away if they do not present proof of vaccination.

Due to the number of unvaccinated truckers, experts have predicted that the mandate will cause disruption to supply chains. The Canadian Trucking Alliance (CTA) estimates that between 10 to 15% of Canadian truckers who work across the border have not been vaccinated, equating to roughly 12,000 truckers. Other estimations have been lower, with the Canadian government predicting only around 5% have not had the jab. CTA’s president Stephen Laskowski clarified that the vaccination rates varied regionally as they did in the general population, which may account for the differences in estimations.

Canada’s Ongoing Trucking Issue Might Worsen

The mandates come at a time when Canada’s trucking industry is already struggling. It had already faced a significant labor shortage, with estimations as to how many positions need to be filled ranging from 18,000 to 23,000. This number is expected to rise to 55,000 by next year.

Those working in the industry recognize that new talent must be brought into Canada’s oldest workforce. However, the sector has limited access to training dollars and young people looking to get their first job as a trucker face the hefty bill of $10,000 to $15,000 to obtain a license. There is thus a demand for the government to help young Canadians pay for licensing.

Additionally, the ongoing pandemic has further fueled the issues in the industry by encouraging early retirement and exacerbating turnover. Furthermore, there is a growing focus on achieving a healthy work-life balance, which is making the industry less appealing to younger generations.

The challenges the Canadian trucking industry face do not have a quick fix. Laskowski has deemed the situation a “national issue and potentially becoming a national crisis.” There will likely need to be some investment in the sector to encourage a new generation of drivers. Until then, supply chain security is under threat to some extent, particularly with the new mandates. At this point, it is uncertain how these challenges will translate into impact on trade and the economy in Canada. The sectors are intrinsically linked, so it can be expected that the ripples of the trucking and supply chain issues will be felt across industries.

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The threat of a trade war between the US and China has subsided significantly in the latter half of 2021. That's good news, but it doesn't mean everything is perfect. China, which was already behind schedule in fulfilling its trade deal commitments with the US, has curtailed its purchases of a variety of goods covered by the agreement.

Talks Are Ongoing, but Progress Is Slow

The targets in question were outlined in a January 2020 deal signed between the two nations. China has spent $210.4 billion since then on US manufactured, agricultural, and energy goods. This includes $9.5 billion spent in just October alone.

These are, of course, huge figures. But in the world of economic trade between the planet’s two largest economies, the numbers are lower than they should be, at least from an American perspective. Indeed, October’s procurement was the slowest pace in a year. By November, China had only reached 56% of the two-year target of $378.4 billion.

Concern from the Biden Administration

The administration of US President Joe Biden has repeatedly called on China to adhere to its commitments. US Commerce Secretary Gina Raimondo pointed to Beijing preventing the purchase of “tens of billions of dollars” of Boeing Co. planes as an example of China’s failure to abide by the agreement.

US Trade Representative Katherine Tai has said the Biden administration would work to enforce China’s commitments. However, just how they could accomplish that is unclear. The deal was set to expire at the end of 2021, though there was language in the agreement that indicated that both nations expected the increase in purchases to continue in “2022 through 2025.” A November summit between President Biden and Chinese President Xi Jinping failed to establish a clear path forward.

The deal was struck under the administration of then-US President Donald Trump. Many expected US–China relations to improve under a Biden administration. In one sense, that’s been true, with less aggressive rhetoric from both sides. But underlying tensions about possible Chinese expansionism, alleged human rights abuses in China, and China’s wariness about the new AUKUS submarine deal, all make any trade talks fraught with pitfalls.

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This past fall, global audiences were gripped by the haunting and thrilling Netflix series Squid Game. The show follows a number of South Koreans who are in so much debt, they agree to participate in terrifying and even fatal contests to solve their financial woes. Writer-director Hwang Dong-hyuk uses the series to level several thinly veiled criticisms towards capitalist systems, but what many foreign viewers don’t know is that the series is particularly resonant in South Korea for a reason.

South Korea’s Debt Problems

South Koreans have a debt problem. Many people around the world do, but in South Korea, the problems are especially pronounced. Household debt in the country is now at an eye-watering equivalent to over 100% of GDP. Part of the problem is that loans are simply too easy to secure, similar to the problems behind the subprime mortgage crisis in the U.S. that caused a global recession in 2008.

This indebtedness has gone hand-in-hand with increases in the income gap, youth unemployment, and cost of living in big cities. And of course, the COVID-19 pandemic has not helped. With the total amount of debt of South Koreans exceeding GDP by 5%, even saving every penny earned for a year won’t get many South Koreans out of debt.

SMEs in South Korea

It’s important to note that this debt is not really the product of an increase in the price of consumer goods or a lack of “financial literacy.” Personal spending is not really the problem. It’s more due to people taking out business loans to start, expand, or maintain small- and medium-sized enterprises (SMEs).

South Korea has a higher percentage of self-employed people than most countries. The self-employed form fully a quarter of the entire job market. This makes the economy more vulnerable to downturns. A central bank study in 2017 found that only 38% of small businesses survive three years in South Korea.

The government encourages start-ups, but many feel they don’t do much to help struggling businesses. And there is much less separation of corporate debt and personal debt, as there is in countries such as the US. Personal bankruptcies surged to a five-year high of 50,379 in 2020 and the percentage of South Koreans falling behind on personal debt payments has risen to 55.47% by mid-2021, up from 48% in 2017. Add these figures to a culture in which personal debt has long been stigmatized, and it’s not hard to understand why many South Koreans feel as desperate as the characters in Squid Game.

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Ecuador uses drones for high-altitude spray trials of particular Andes mountains crops. The use of fully autonomous drones in potato fields shows the potential of reducing labor costs and pesticide exposure.

More than half of Ecuador is located in the Andes at sea level over 3,000 meters, where corn, wheat, barley, and potatoes are the most commonly grown crops. Compared with farming on the plains, spraying crops and fertilizing can become challenging at this altitude.

At the moment, both smallholders and large farms in the Andes are interested in high-precision drones as alternatives to manual labor and ground machinery. Trained youths use XAG drones to convert abandoned farmland into fertile soil for growing fruit and vegetables in Ecuador.

Advancing Good Agricultural Practices

Most Ecuadorian farmers have never seen drones spray crops along the Andes. Despite soil erosion and erroneous pesticide applications, the people of Ecuador's Andes must produce food crops.

A XAG Agricultural Drone equipped with four atomized nozzles, along with a 16L innovative liquid tank, evenly sprays minimal chemicals on growing potatoes. MegaDrone, XAG's local partner in Carchi, has been conducting drone spraying demonstrations for Andean potato farmers since July.

The traditional methods of protecting food crops from pests and diseases are manual spraying and ground-based machinery. While large tractors can improve the productivity of potato farms, their increased weight and size make them impractical to operate on mountainous terrain, and their vast tires are likely to compact fragile mountain soil.

It is easier for farmers to balance efficiency and sustainability when using a spraying drone. An Ecuadorian pilot-operated XAG Agricultural Drone during the potato field demo at Farm Hacienda la Ovejeria to show its praying capability. Thanks to this system, farmers can effectively control pests and fungal diseases with 30% less chemical use and 90% less water consumption.

More than 4,000 strains of potato grow in the Andean Highlands, yet weevils and tuber moths can ruin these fields. To prevent severe yield losses caused by pest hazards, potato farmers have to spray pesticides 14 times during a growth cycle. Overuse of pesticides due to unequal treatment by hand or boom spray by ground machinery has contaminated the soils and waters of the Andes.

In furtherance of the Andean landscape preservation project, a five-million euro grant has been provided by the United Nations’ Food and Agriculture Organization. With Ecuador's 3.2 million hectares of cultivable land, the agile agricultural drone could be a powerful tool to promote sustainable agriculture.

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Covid-19 has changed how consumers purchase goods, and the US container imports have experienced a boom as a result. The surge in imports into the US have led to a record-breaking spike in freight costs, and seaports are experiencing backlogs. However, transportation executives have stated that the boom is unlikely to last due to the second wave of restrictions for Covid-19 relief.

Shipping container companies were hit rather hard by the Covid-19 relief efforts, which saw trade being halted around the world. which transport goods for Walmart, Target, Amazon, and other retailers, are questioning the long-term viability of the US import boom. Rolf Habben Jansen, CEO of Germany's Hapag Lloyd, told reporters that while no one could have foreseen the spike in imports, a correction would happen in the future.

US Containers Import Increases as Consumers’ Confidence Rises

Consumer confidence in the US grew in September, as retail sales increased. However, consumer savings are being used up and there is an increasing amount of layoffs happening, as the US sets a record for new Covid-19 infections, which can all lead to a fall in consumer spending power. The container boom in the US is dependent on how the new Covid-19 wave affects the global economy as well as how much demand there is for goods.

As Businesses Rush to Fill the Needs of the Consumers, the Port of Los Angeles Is Backed Up

In recent weeks, the cost of shipping goods has risen. A 40-foot shipping container transporting goods from Asia to one of the world's greatest retail markets, the US, priced at $4,500. Ships and cargo were both at full capacity. Imports increased at the ten main seaports in the US. There was also a 9.2% increase in August, and a 12.4% increase in September. As inventories rebounded in August, many US corporations scrambled to restock their distribution centers and warehouses.

The pandemic has caused a disruption in the supply chain, resulting in a record volume of ships and shipping containers arriving at the Port of Los Angeles. The Port of Los Angeles is the busiest ocean trade hub in the US, and the backup of its ports is having a ripple effect throughout the nation's supply line, which could last for months.

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Smart manufacturing is the basis for dependable production in smart factories. The system leverages data, technological processes, and human interactions to revolutionize production in digital businesses. 

The Complexity of Smart Manufacturing Applications

The implementation of intelligent manufacturing can be a complex process requiring a meticulous end-to-end viewpoint from strategy generation to knowledge acquisition, administration and evaluation, application, and an extensively deployed strategy.

To succeed in the industry, facility managers should analyze the potential challenges and benefits of the intelligent manufacturing system extensively. According to experts, organizations must understand that smart manufacturing is more than adopting the right technology. It involves integrating capacity development, efficiency activation, and people empowerment tasks.

Actions to Expedite Success in Smart Manufacturing

The activities listed below will aid in the transition of intelligent manufacturing operations, while also facilitating the mobilization of practical resources and assistance:

1. Emphasis on People

Intelligent manufacturing should improve the way people execute their tasks. The changes in structural design will bring together operational, information, and engineering technology departments and the supply chain. This association and merger is a criterion shift that often focuses on governance, decision making, and culture, along with technology.

2. Expect Gradual Execution

Pilot programs do not trigger disruptions, but their deployments do. Every factory leverages a varying combination of systems, equipment, workforce potential, and processes. Even when evaluation is done first, managing challenges occurring from restructuring procedures while avoiding unseen integration expenses can be challenging. 

3. Prepare for the Unification of Continuous Revolution with Continuous Advancement

The goal of harmonizing initiatives is to improve vital operations for current procedures while also developing future processes and development capabilities. This makes change management easier while also preventing resource limitations.

4. Accelerate Performance Management

Improving operational efficiency is an important aspect of smart manufacturing, but it is not the end goal. Accelerating processes will enhance service levels and order cycle times, as well as facilitating the identification of automation and digitization opportunities. 

5. Adopt Rational Expectations during Each Stage

It's critical to understand which benefits to emphasize and when to shift focus in different stages. Consumers today are increasingly demanding advanced technologies and improved working methods. As a result, even minor gains in earlier stages can be critical for enhanced performance.

6. Develop a Plan 

An exclusive intelligent manufacturing firm can determine the necessary strategy and tactics to ensure continual engagement and application from factories to leadership. A smart plan also encourages the progression of activities while managing possible interruptions. It also guarantees that budgets do not underestimate the costs of operations such as process integration and re-engineering.

Smart Manufacturing Strategies Are Still Developing

The smart manufacturing industry is evolving fast. To succeed, industry players must focus on these core actions to lay a robust foundation for their businesses and make room for growth. 

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Food insecurity is becoming an increasingly urgent problem across the world. According to Action Against Hunger, in 2020, 2.37 billion people did not have access to enough safe and nutritious food, equating to around one in nine people going hungry every day. The coronavirus pandemic worsened these figures, with an estimated 30 million people being affected by hunger due to the pandemic.

The Problem of Food Waste and Food Insecurity

One of the most promising strategies in the fight against increasing food insecurity is to prevent food waste. As population sizes grow, diets change, and urbanization pushes forward, the agricultural industry is finding itself under increasing pressure to provide more food in the same amount of space. By 2050, the world’s crop production will have had to have doubled in order to meet the growing demand for food. Statistics show that currently, around a third of all food produced globally is wasted. Therefore, addressing food waste provides a viable option to providing more food and reducing food insecurity.

Recently, scientists in Canada have devised novel fruit packaging that can preserve the freshness of strawberries for up to 12 days. The innovation marks a significant step towards addressing food waste and tackling food insecurity.

Innovative Packaging to Tackle Food Waste

Québec produces more strawberries each year than any other province in the country. Strawberry producers and sellers face the challenge of keeping these berries fresh. To tackle this problem, a team of researchers led by Monique Lacroix at the Institut national de la recherche scientifique (INRS) developed a novel film for use as food packaging. Initial research has shown that the film can maintain the freshness of the strawberries for up to 12 days.

The innovative film protects the fruit from mold and pathogenic bacteria. The study’s results showed that the loss rate of the strawberry batches was significantly less for strawberries packaged with the novel film in comparison with control strawberries (38% loss rate vs. 55%, respectively).

Strawberry producers will likely benefit from the invention as it will allow them to increase their crop yield. There is also an opportunity to develop the film for use in packaging other fresh produce. Potentially, the film could greatly benefit the wider agricultural and food seller market.

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With an aim to strengthen their ever-expanding bilateral relations, the UAE and India are holding discussions to strike a Comprehensive Economic Partnership Agreement (CEPA) by early 2022, growing the non-oil trade between them to $100 billion in the next five years.

A Long-Term Relationship

As per the UAE’s Ministry of Economy, the initiative will not only give a major fillip to the commercial activities but also open a new phase of strategic cooperation between the two nations. “Both sides have drawn up a very aggressive and ambitious time-frame and aim to conclude negotiations by December 2021,” Indian Commerce Minister Goyal said at a press conference on Wednesday. “We hope to sign formal agreements in early 2022.”

The UAE has been an important trade partner of India for over five decades. The Middle East country is India’s second-largest export destination after the US, with $29 billion of value in 2019-2020. India accounts for 9% of the total foreign trade and 13% of non-oil exports of the UAE.

The UAE imports petroleum products, precious metals, stones, jewelry, minerals, food items, and others from India and exports chemicals, electronic equipment, plastics, and wood articles.

Moreover, the Middle East nation is the eighth largest investor in India, with $11 billion between April 2000 and March 2021. According to official data, investments by Indian companies in the UAE are approximately over $85 billion. In June last year, Abu Dhabi’s strategic sovereign fund Mubadala Investment Company invested $1.2 billion in India’s telecom provider Jio. In 2019, UAE entities committed $7 billion to create a food corridor between the UAE and India to provide a stable market for farmers.

“The two partners feel that the possibilities are far more than as both goods and services will complement each other. Given the strong growth prospects of the Indian economy, we look forward to increased investment from the UAE in diverse sectors of India,” Goyal added.

The World Trade Organization predicted the volume of world merchandise trade would grow 8% in 2021, and the International Monetary Fund expects the global economy to expand by 6 % in the same year. Therefore, the UAE is taking the chance to strengthen its economic ties with its major partners. After India, the country will engage in similar negotiations on CEPA with Indonesia.

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The Turkish economy has been facing increasing difficulties in the last five years, including high inflation, appreciable value loss in the Turkish Lira, decreasing international trade volume, loss of foreign capital in the Turkish economy, and more.

The production in Turkey heavily depends on imported semi-products, which correspondingly impact exports. However, the great uncertainty in the Turkish economy makes things worse for exporters. In such a time, the Turkish carmakers have dominated the country’s exports in 2021 as they did in the previous years.

Car Exports in Numbers

In the Q1 of 2021, 415,187 cars were exported, which increased 28% from the same span in 2020. The total value of the exported automobiles in 2019 was around $180 billion, while it rose to $201 billion this year. Regarding all those promising numbers, the car industry dominates Turkish exports without a doubt.

Moreover, after-sale services are the second important part of the industry. In the first seven months of 2021, this sector provision brought in $24.8 billion, and the number was 46% higher than the previous years.

The pandemic seems like a boost for Turkish car exports, while other industries suffer devastating impacts from the COVID pandemic. Especially when the Turkish Central Bank has lost its power massively to protect the value of the Turkish Lira against the other currencies, earning in foreign money makes the Turkish carmakers highly valuable.

Is the Car Industry Sustainable?

The Turkish economy has been facing undesired fluctuations in recent years because of the politically biased and unrealistic economic policies. Turkey has reached a high inflation rate, and the undervalued Turkish Lira supports Turkish exports. Even further, the great value loss in the real wages decreases the production costs. Under these economic conditions, it is possible to claim that the car producers have some significant advantages to bolster their production and exports.

Moreover, there are other aspects of this fragile economy in recent years, one of which is the migration of skilled workers to developing countries. Many young Turkish people prefer going abroad to work in other countries with higher living standards, and this brain drain is a far-reaching problem for the whole Turkey economy.

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After settling the naming dispute, North Macedonia is enjoying the economic fruits of a friendlier relationship with Greece.

In particular, since North Macedonia gained independence from the collapsing Yugoslavia in 1991, it was officially known as “the Former Yugoslav Republic of Macedonia” (or FYROM) until February 2019. The dispute erupted when Greece objected to the country calling itself just “Macedonia.” Macedonia was an ancient Hellenic kingdom most known for its expansive conquests under Alexander the Great. Greeks typically see themselves and their culture as partial descendants from the ancient Kingdom of Macedonia, and they felt the FYROM was appropriating that legacy.

T[b]ime to Rub Shoulders[/b]

While the current nation overlaps with some of Macedonia’s historical regions, its dominant ethnic group is Slavic, which was nowhere near Alexander’s previous areas. The conflict over the name was difficult to understand for many outside observers; however, the dispute carried far more cultural and historical weight than just a name for inside citizens.

Thanks to an agreement made in 2018 and being effective in 2019, the North Macedonian–Greek relation has improved. As part of the agreement, the North Macedonian government implemented many long-term changes, including altering its official letterhead. It also started issuing passports and identity cards with the North Macedonia name.

The deal between the two nations that enacted the name change is the Prespa Agreement, named for a lake they shared. In addition to resolving the terminology problem, the Prespa Agreement covers areas of cooperation for a strategic partnership. Bujar Osmani, North Macedonia’s foreign minister, has stated that the bilateral relationship has “deepened” since the Prespa Agreement, giving more opportunities for Macedonia trade.

Obstacles to EU Membership Remain

A big motivator for North Macedonia’s agreeing to the name change is their aspiration to join the European Union. While resolving their disagreement with Greece is a big step, the path towards EU membership is not entirely clear. North Macedonia’s eastern neighbor, Bulgaria—who, like Greece, is an EU member—opposes North Macedonia’s potential membership, citing a similar bilateral dispute over history and national identity.

Advocates of trade and cooperation should be hopeful that North Macedonia can resolve its issues with Bulgaria as it has with Greece. As seen already, the Prespa Agreement has enabled greater collaboration between two nations with economic conflicts in recent history, and North Macedonia trade is vital for the country during the post-pandemic period.

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Faced with one of the worst economic crises of decades, Lebanon’s central bank has decided to end subsidies on fuel and instead offer credit lines for imports based on the market price for the Lebanese pound. The move has pushed fuel prices to an all-time high and sent people into a frenzy in the cash-strapped nation. The Army has been deployed at filling stations to stop panic-stricken people from hoarding amid crippling fuel shortages. Many businesses are scaling back operations or shutting down. 

Controversial Move from the Central Bank

Over the years, the bank had been subsidizing fuel by providing dollars at exchange rates below the right price of the pound – 3,900 pounds to the dollar compared with market rates above 20,000, draining the foreign currency reserve by $14 billion. This decision comes amid concerns of mandatory maintenance of a portion of deposits, which have dwindled to $13 billion. 

Facing a backlash over the decision, central bank governor Riad Salameh said, “We are saying to everyone: You want to spend the mandatory reserve, we are ready, give us the law. It will take five minutes,” 

Profound Impacts on the Economy

According to financial analysts, the subsidy scheme has merely fostered smuggling and stockpiling, with the central bank forced to fund traders who were not bringing their products to the market. Despite spending $800 million on fuel imports in the last month, diesel, petrol, and electricity are still in short supply in the country. The price of a gallon of fuel has increased by more than 220% in the last year, indicating a thriving black market. The government has so far been incompetent to secure deliveries of imported fuel, experts stressed.

The current fuel crisis is the consequence of a broader economic meltdown that has sunk the Lebanese pound by 90% in less than two years and pushed more than half the population into poverty. The World Bank has criticized Lebanon for a deliberate lack of policy to tackle, what it says, one of the worst depressions since the mid-19th century. 

Lebanon had been without a government until recently since Hassan Diab quit as Prime Minister last August after a deadly explosion at Beirut port. The new Lebanese government under Prime Minister Najib Mikati has said removing fuel subsidies is a crucial step towards pulling the country out of the crisis. The experts believe the import-dependent country now must quickly draw a credible economic reform blueprint to unlock billions of dollars in international aid and engage with the International Monetary Fund for a desperately urgent bailout.

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In recent years, the inculcation of the latest technologies, such as blockchain, augmented reality, and automation, has highly boosted the global shipping industry. Among different sectors, automation has particularly resulted in large-scale savings and higher efficiencies for the shipping industry. The reason for such impact is that this technology can reduce the dependency on finding suitable manual labor while lowering the rate of errors. This blog looks at the vital role that automation is playing within the shipping industry. 

Technology-Induced Positive Changes

Until the turn of the century, the shipping industry was highly dependent on manual labor because companies hadn’t implemented technological advancements on ships on a large scale. The only major use of technology was navigation; however, this situation started to change in the early 2000s when a greater number of shipping companies began to embrace automation technologies.

Moreover, in the 2010s, the role of automation became even more critical. Tasks such as the movement of goods, the identification of personnel, as well as the maintenance of ships also began to be automated to a great extent. This progress has continued in the early 2020s as more shipping firms are now looking to automate their business even further.

According to research by Allianz, one of the world's largest financial service groups, between 75-96% of marine accidents can be related to human mistakes. 75% of all marine liability insurance claims between 2011 and 2016 were caused by human error, at a huge cost of $1.6 billion.

This role is likely to become even more prominent going forward. Smart contracts, for example, have the potential to completely transform the shipping industry. Furthermore, users can make payments using blockchain technologies, making the entire process even more convenient. With very few exceptions, these developments are likely to fully automate the entire shipping process.

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Since the end of 2019, the whole world has been living at the pace of the COVID-19 pandemic. The economic and trade repercussions are significant, and it is still difficult to accurately assess the extent of the damage. But certain impacts have already been visible since the start of the pandemic, particularly shortages of raw materials, delays in the delivery of certain products, and most importantly, a significant change in the structure of international transportation. This change can be seen primarily on two levels: the market share of sea freight and prices charged by shipping companies. 

Obstacles for the Global Freight Industry

The pandemic has forced countries like the US, China, India, Brazil, and the majority of EU member states to close their borders. However, a large portion of air transport is via commercial airline flights, which have decreased due to a low number of passengers, forcing companies to rely on sea freight. Changes in the behavior of global consumers as a result of the pandemic is thus impacting the entire freight industry.

According to the UNCTAD, “the changes in consumption and purchasing habits that have occurred with the pandemic, including the rise of e-commerce, and containment measures, have in fact led to an increase in import demand for manufactured consumer goods, including much of it is transported by sea container ships. The increase in demand has been stronger than expected and has not found a sufficient supply of maritime transport.”

This increase in the market share of maritime transport has thus resulted in the prices of sea freight skyrocketing. As demand outstripped supply, soaring prices were inevitable and spectacular. The impact on freight rates has been highest in developing regions, where consumers and businesses can least afford those rates. Currently, prices to South America and West Africa are more exorbitant than other major trading regions. For example, freight rates from China to South America had soared 443% by early 2021, compared to 63% between Asia and the east coast of North America.

The explanation also lies in the fact that the routes from China to South America and Africa are longer. More ships are needed to provide a weekly service on these routes, which means many containers are also "stuck" there. To avoid a similar situation, the UNCTAD briefing note highlights three elements to be taken into account: advancing trade facilitation reforms, improving maritime trade monitoring and forecasting, and strengthening national competition authorities.

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The UK is launching a tariff suspension scheme to help make domestic manufacturers more internationally competitive. The scheme will apply to imported manufacturing inputs for firms requesting the tariff suspension.
In the past, the program was to help various sectors such as electronics, chemicals, and agriculture. This policy helped lower the cost of imported raw materials as well as other inputs which were scarce or locally unavailable. 
The new scheme will replace an equivalent program run by the European Union (EU), which applied to Britain before Brexit. The EU implemented this tariff scheme temporarily at the time the UK finalized its departure from the bloc. Under the program, all suspensions required assessments from all EU members.
Companies can request a 0% duty rate for their imports under the EU Autonomous Tariff Suspensions scheme. Applicants for the EU suspensions scheme will need to show that the imported commodities are necessary for manufacturing operations within Europe and cannot be found or are not available via EU suppliers. This scheme is currently applicable to companies involved in the manufacturing and processing industries such as the pharmaceutical, electronic, and chemical sectors. Moreover, they have the potential to reduce exposure to customs duty, which can be a liability, while increasing competitiveness. The scheme can also lower the financial burden significantly and have cost-saving benefits if a company imports its products due to the lack of supply within the EU. 
According to Trade Department Minister Greg Hands, “now we have left the EU we can use suspensions to give UK firms the maximum possible benefit.”
Unlike the EU tariff suspension, this novel scheme could also be applied to finished products for a temporary need. Under the EU program, a company can only apply the tariff suspension to raw materials and semi-finished products, meaning that finished items are outsiders.
The UK government would make decisions based on the needs of British firms and the wider economy under the new program— and impose criteria in the near future. These criteria will include firms having to prove, if a suspension had applied in 2020, they would have saved at least 10,000 pounds ($14,163) in duties. ($1 = 0.7061 pounds)
From June 1st until July 21st, firms will be able to apply for a tariff suspension. According to the trade department, any granted requests will not only apply to the firm that requested it but to all firms starting from early 2021 and last until summer 2024.
Currently, the rolled-over EU tariff suspensions will last until the end of 2021. These EU tariff suspensions apply to hundreds of inputs, including frozen fish fillets, plastics, and car parts.
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Artificial Intelligence (AI) is undoubtedly beginning to play a vital role in several industries. AI is being used to automate operations, increase productivity, and generate growth. The trade industry is no exception, and AI has already started to play a major role in this sector. Here are some of the main reasons why AI is the future of global trade:

The Role of AI in Shaping the Future

The trade industry currently faces several challenges. For starters, the compliance burden can be extremely difficult for small and medium-sized enterprises (SMEs) and starting businesses to manage. They are required to comply with various local laws, international regulations, ongoing audits, and other basic requirements associated with managing a business. This is where AI comes in. AI-powered global trade management software could be the perfect solution to resolving traders' compliance issues, thanks to its ability to automate documentation and filing.

Second, another key issue that traders face is the difficulty in finding buyers for their goods. This challenge could be overcome by utilizing AI, as this technology could assist traders in identifying potential buyers from various parts of the world. In fact, AI-powered software can even be programmed to perform background checks on potential buyers to help avoid scammers and other risks.

Finally, AI-based solutions can also help traders with cost optimization. Rather than employing numerous people, traders would only have to choose one AI-based software solution. This will result in a lower salary bill and a much more efficient business strategy. As a result, deploying AI on a large scale could even prove to be a landmark moment for the global trade industry, helping it discover its true potential.

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Although expanding into foreign markets may help increase your company’s profits and access to various opportunities, there are still various risks involved. Here are some of the benefits and drawbacks of creating international partnerships in the shipping and trade industry:

The Advantages of Foreign Partnerships

Currency Exchange Benefits

Currency fluctuations offer a special benefit to those in the international trade industry. For example, when the US dollar falls in value, customers can take advantage of the favorable currency exchange rate and increase sales. Converting weaker currencies against a stronger dollar can help independent businesses as well.

Upfront Payments

Global trade also comes with the advantage of upfront payments. Most international transactions are paid in advance, allowing you to secure a consistent and timely stream of revenue, unlike domestic purchases, which may leave you waiting for cash to flow in.

Brand Exposure and Credibility

New markets can also lead to better brand exposure. Doing business in other countries will help your company's reputation spread to neighboring areas and even raise your profile in your target niche. This benefit may be difficult to quantify, but it is certainly a valuable way to boost your credibility.

The Disadvantages

Customs and Tariffs Procedures

On the other hand, the high cost of tariffs, quotas, and customs costs and procedures are some of the most significant challenges you may face when doing business on a global scale. Although a majority of these costs will be covered by sales revenue, it can make things difficult for new businesses.

High Risk and Infrastructure Challenges
Venturing into unfamiliar markets overseas can come with risks such as bribery and corruption, political instabilities, poor e-commerce infrastructure, scammers, and more. These risks often deter some businesses from forming international partnerships.

Most of today's leading businesses in international trade began small but grew exponentially through foreign expansion and international partnerships. However, you must carefully consider all the risks involved to make smart decisions.

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Exports in the food, fashion, and furniture sectors, also known as the “3F” that convey the excellence of the "Made in Italy" brand worldwide, started growing again in 2021 and are expected to grow further to almost all countries, with one exception: the UK.

While the Italian export sector as a whole is experiencing a resurgence (+28.1% in March of this year compared to March of last year, with the main export markets being Germany, the US, China, and Russia), according to the statistics published by ISTAT (National Institute of Statistics) in the months following the Brexit deal, “Made in Italy” exports to the UK have dropped by 38.3%.

The major issues are particularly related to the new, complicated customs procedures, as well as the increase in transportation costs due to delays, along with increased border controls, and, more broadly, bureaucracy. Italy is the fifth largest EU exporter to the UK, behind Germany, the Netherlands, France, and Belgium, but it ranks first in fashion and furniture, and second in food and beverage.

The difficulties in commercial exchanges with the UK are thus having a significant impact on Italian agri-food exports to the country, which have decreased by 8% in the first quarter of 2021 compared to the previous year.

The best-selling “Made in Italy” agri-food exports after wine include tomato derivatives, pasta, cheeses, cured meats, olive oil, Grana Padano, and Parmigiano Reggiano, which were worth an average of 3.4 billion per year prior to the COVID-19 pandemic.

The Italian fashion sector, which includes apparel, textiles, leather goods (including shoes), and accessories, saw a drop in exports to the UK of up to 50.6% in the first two months of the year as well. This is especially significant when compared to the +175% increase in fashion exports to China during the same period.

A similar trend is also evident in the furniture industry, which includes lighting, ceramic, and porcelain products, but also kitchen, garden, and office furniture accessories, with exports to the UK falling by around 20% while rebounding everywhere else, particularly to Middle Eastern countries.

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