Article brief:
When freight forwarders expand into a new country, many follow the same order: win an anchor customer, get the first shipments moving, and deal with compliance later. That order actually is backward.
Picture a new branch that moves its first 10 shipments without a problem. Then the invoices go out, and the country’s e-invoicing portal rejects every one because the forwarding software was never set up for local requirements. The cargo arrived, but the branch can’t bill for it, and cash flow stalls before the branch has even found its footing.
Compliance is usually the biggest obstacle to growing freight forwarding operations, because the rules change at every border. Forwarders that build it into their operating systems before go-live start billing sooner. Those that add it afterward end up fixing problems while they’re trying to grow.
Every country has its own rules, whether it is filing customs documents, preparing tax invoices, using specific document formats, or maintaining records according to government guidelines. Rules change when you cross borders, and if your freight forwarding business operates manually and has to enter the same shipment information three or four times across different systems to process it, high error rates can create compliance risk. An incorrect Harmonized Tariff Code (HTS), an incorrect invoice number, or a customs documentation submitted one day late may seem minor, but they can cause delays or prevent payments.
Rules are constantly evolving with changing customs regulations and trade policies. For instance, the EU’s Import Control System 2 (ICS-2) now requires detailed entry summary declarations before goods arrive at the first point of entry into the EU. The U.S. ended the $800 de minimis exemption for imports last year, increasing the need for customs entries and added documentation. As geopolitical tensions rise and sanctions lists expand, you’ll need to adapt quickly or risk losing compliance status. Compliance failures can also trigger penalties.
The best time to find compliance gaps is before you sign a customer. It will help to review this list for any country you are planning to expand into.
Regulators increasingly view freight forwarders, and the freight industry as a whole, as compliance gatekeepers. That means that before the logistics process begins or a freight moves, they expect freight forwarders to check all parties on the shipment against restricted and sanctioned lists.
The nature of the international trade will determine what lists you need to research. For example, U.S.-linked shipments require review against the Commerce Control List under the Export Administration Regulations, OFAC sanctions lists, and ITAR if your cargo is a defense article. The United Nations and European Union also maintain their own lists, as do many country-level agencies.
Watch for red flags like a customer refusing to provide information about an unidentifiable end user, or routes that make little to no business sense. Document all due diligence activities. It may be most effective to complete party screening within your workflow at the time of booking, including automatic screening for every shipment. A separate tool’s risk assessment may not be so effective on a quiet day.
A good transportation management system (TMS) will allow for scheduling shipments, selecting carriers, and real-time tracking. This increased visibility helps shippers monitor shipments in real time, with technology enhancing collaboration with carriers and facilitating faster updates for customers. However, there are limitations as to what a TMS will be able to accomplish in freight forwarding operations.
While digital freight platforms can improve customer experience and data visibility across transport workflows, they still fall short on local regulatory execution such as filing a customs entry in one country and tax invoice in another. That is why freight forwarders generally add a local tool for every new market they want to operate in. But each additional local tool adds another username/password combination, another data export, and potentially another source of error. There is no need for any of that if you’re using NewageNXT. Make sure to check if your existing system currently supports the next country you plan to enter.
View localization as an integral part of your overall market entry strategy, not something you consider after launch, because expanding freight forwarding operations means managing operational complexity as you scale into new countries, not just localization. At Newage, we consider localization as country-specific regulatory compliance created and maintained within the platform (taxation, e-invoice generation, customs filings, statutory reporting).
NewageNXT files e-invoices in the UAE and Customs in India via ICEGATE, has integration into AMS/AES systems in the United States, and supports e-invoicing across all of Latin America. We plan to add Brazil and Peru to our growing list of supported countries. When NewageNXT does not support a particular market, we collaborate with the client to develop the necessary localization for that market. This can take several months, so it is important to raise this concern early. When compliance resides in the same system as sales, operations, and finance, the first invoice issued in a new country will have essentially the same characteristics as the one-thousandth invoice issued from that same location, and the stability typically helps you retain clients better than any discount.
Compliance often gets you in the door, while growth comes from partnering with strong local agents, building carrier relationships with enough capacity during peak seasons, and focusing on two to three trade lanes you know will drive growth.
Prior to signing up your first customer in an additional foreign country, identify all of the filings required by that market and check if your current system is able to process those filings today. Schedule a demo today to see how NewageNXT processes compliance for the countries you are interested in entering.
NewageNXT supports e-invoicing in the UAE, customs filing in India through ICEGATE, AMS and AES in the U.S., and e-invoicing across Latin America, with Brazil and Peru on the roadmap. The Newage team can confirm the current list for your target market.
If the country is already supported, the timeline mostly depends on your setup and data migration. If it needs new localization, Newage plans to build it with you, and it can take quarters.
Ask the Newage team how party screening fits your workflow and which lists you need covered.
Newage maintains localizations inside the platform as rules change, so updates come through the system instead of a separate tool you have to patch.
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