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Lim Tze Hsien

Is America still open to do business with Singapore SMEs?

BY LIM TZE HSIEN

The current US administration’s desire to limit foreign imports through protectionist measures has drawn much concern from Singapore businesses, with many asking us if the US is still open for business. Our answer? A resounding YES.

Despite this sentiment, the United States is still either one of the most important - or the most important - trading partner for Asian countries. This is especially true for Singapore as the US has historically been and will continue to be a key trading partner for categories such as Electronics and Machines, Scientific Instruments, and Chemical Products. Singapore’s small and medium-sized enterprises (SMEs) would do well to take notice of the opportunities that the US presents. 

With logistics know-how, companies who are looking to expand their business reach will greatly improve their customer reach and experience.

Recent changes that make it easier for Singapore SMEs to export to US
In early 2016, a provision was signed to raise the de minimis level on international shipments into the US from US$200 (S$270) per shipment to US$800 (S$1100). This means that if your exported goods fall under the threshold, it can pass through customs without needing to understand complex customs procedures, additional costs and extra paperwork. This is particularly relevant for e-commerce players and retailers that have relatively small volume shipments, giving them a larger window of opportunity to trade goods that fall within this range.

Additionally, whilst America’s 50 states have differing legal and tax codes, the country as a whole recently implemented what’s referred to as a “Single Window”. This harmonised, centralised electronic system allows you to provide the necessary paperwork via a single online tool. Officially known as the Automated Commercial Environment (ACE), this system makes shipping to the United States simpler, faster, more efficient and most importantly, cheaper.

For the 46% of Singapore companies that cite unclear rules and regulations as the main obstacle to their international expansion, these recent developments are game-changers that make it a breeze to export to the US.

Regional differences between US states offer SMEs numerous trade opportunities
Understanding the variation between US states – and which products are in demand and where – is also important when considering how your goods might fit into the marketplace. This is especially crucial given that 40% of Singapore businesses lack sufficient knowledge of foreign markets when expanding internationally. 

For instance, the US still has one of the world’s strongest industrial sectors. In fact, since the global recession of 2008, manufacturing has been one of the biggest contributors to the United States’ recovery. This is bringing prosperity to states in the Midwest and South, the country’s manufacturing heartland. 

Whether it is providing components for tech products assembled in Atlanta, Georgia, machinery for factories in the Midwest, or geological tools for oil-rich states like Texas, Singapore SMEs should consider the broad range of opportunities that exist in the US beyond consumer goods industries. 

Know before you go
So how can you make sure your business doesn’t miss out on the action and what do you need to know to avoid costly mistakes? Before exporting to the US, there are some clear steps and procedures that you need to follow. 

When deciding how to price your products for sale in the US market, it’s smart to first determine how much it will cost to get them there – from choosing a shipping solution that meets your cost and speed requirements, to knowing how your goods will be taxed when crossing the border. 

Additionally, you’ll need to complete all pre-shipment documents and confirm whether you require a license to send goods abroad; this may be necessary when shipping products such as chemicals or medical supplies. 

Good customer service doesn’t stop after the shipment leaves your warehouse. That’s when strong after-sales service kicks in. Once a package is on its way, update your customers on its progress and whereabouts as these are important to your customers.

Even after your customer has received their shipment, what happens if they need to return it? An efficient and cost-effective returns option makes all the difference, and really helps to drive sales in the long run.

As you can see, America is most definitely open for business. Moreover, the initiatives of recent years have only simplified things even further, making it easier to grow your business in the United States. Optimising your supply chain and making your company’s logistics operations more competitive will make serving customers in the US even easier. With a bit of due diligence and a clear understanding of the market and its procedures, accessing the US market and its diverse opportunities can be relatively straightforward for SMEs.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.

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Lim Tze Hsien

Lim Tze Hsien

Lim Tze Hsien is the Managing Director of UPS Singapore and is responsible for all UPS express delivery and logistics operations in Singapore. The UPS veteran joined the organisation in 1990 and has broad experience working in various UPS business units including operations, engineering and strategic planning.

Prior to his current appointment, Lim served as the Managing Director of UPS Malaysia. Lim joined UPS in 1990 and has since held various positions, including Vice President of Industrial Engineering for UPS Asia Pacific Region and General Manager for UPS Southern China. 

Lim holds a bachelor’s degree in Industrial Engineering and Management from Oklahoma State University, the United States. He is fluent in English, Bahasa Malaysia, Mandarin and Cantonese.

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