As a locomotive, the free trade free trade zones in Colombia. They continue to gain followers and companies see them as a powerful tool to strengthen their businesses, take advantage of their different benefits and -even- the way to start exporting products and services with the figure of internationalization. Free trade zones play a leading role in the national and global supply chain.
Precisely, in an article in the newspaper La Repúblicareports that 'In Colombia there are 124 free trade zones where more than 1,000 companies operate', in addition, the important economic newspaper assures that "in terms of the destinations that move more are: United States (with US$911 million), Puerto Rico (with US$247 million), the member countries of the Pacific Alliance (Chile, Mexico and Peru with US$225 million) and the Netherlands with US$214 million".
Free trade zones are also relevant to the importance of the supply chain in international trade, as they are specific territories where special economic regulations are applied to promote business and foreign investment and international trade. Gradually they became basic tools in the global supply chain, as they allow companies to reduce production costs, improve efficiency and increase competitiveness.
One of the main benefits for the global supply chain is cost reduction. By setting up in a free trade free trade zoneorganizations enjoy tax and tariff benefits, resulting in lower production costs and increased profitability. In addition, by locating in these territories, there is an efficient and well-connected logistics infrastructure, increasing the quality of transportation and distribution processes.
That is, all that infrastructure that provides efficiency in connection and transportation, makes products arrive at the ports in advance or on time, supporting the global supply chain to roll correctly and bringing the importance of the supply chain in international trade to a higher point. Of course, COVID-19 led to the problems that are being overcome today, but it was due to an extraordinary situation for which the planet and organizations were not prepared.
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What is a free trade zone in international trade: a great opportunity for entrepreneurs?
Free trade zones positively impact the importance of the supply chain in international trade by contributing to its efficiency. How do they do it? When organizations are located in these territories, they handle a large number of suppliers and customers in a single area, speeding up production and delivery processes. Likewise, the free trade zones are usually located in areas close to ports and airports, which facilitates the import and export of goods, thus contributing to the connectivity of the national and global supply chain.
It is worth considering that the importance of the supply chain in international trade is enhanced by the fact that organizations are able to enter the global market by offering more competitive prices and better delivery times. Therefore, it is understood that companies have access to a qualified and experienced workforce, which allows them to improve the quality of their products and services.
However, there are some challenges associated with remaining part of the global supply chain. One of the biggest is to contribute to environmental and social sustainability. Globally, not only in Colombia, free trade zones have faced criticism due to the lack of environmental regulations, which has led to soil exploitation or misuse. Operators such as Zona Franca de Occidente has processes of waste collection for recycling and rainwater collection, among others, to be eco-friendly.
Within this framework, there is work with territorial entities to implement safe environmental practices.
Another associated challenge is the dependence of companies on the government's economic and fiscal policies. Experts have recommended that companies have contingency plans and diversify their operations to reduce the risk of depending on political transformations, either within Colombia or to where they export, which, in the end, translates into more products moving to other countries and a stronger global supply chain.
So far, we can gather that free trade zones play a key role in the importance of the supply chain in international trade by enabling companies to reduce costs, improve efficiency and increase competitiveness. However, it is key that companies operating in free trade zones commit to environmental protection strategies, and that governments implement effective regulations to ensure competitiveness.
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Companies Operating from a Free Trade Zone
5 trends in the importance of the supply chain in international trade
The Logistec magazine magazine reported that "US $507 billion was trapped in global supply chains by the pandemic. This is the conclusion of a new study by Accenture, according to which, in response to this scenario, companies are now looking at supply chains as a strategic rather than purely operational element".
From that perspective, there is a task to leverage technology and trends to get to the point of normalcy to continue the importance of the supply chain in international trade, just like the years prior to 2020.
The global supply chain is a complex process involving multiple players in different parts of the world, from suppliers to manufacturers and distributors, including the free trade zone component. With the increasing globalization of markets, companies are looking to stay competitive. Zona Franca Occidente presents some trends to apply and know how this gigantic process is moving.
Digitization of the supply chain
Their digitization is a trend and pillar in their new way of management. The incorporation of digital technologies such as artificial intelligence, machine learning, cloud and robotic process automation (RPA) has significantly improved efficiency, transparency and visibility. Real-time inventory tracking systems and management software, for example, allow companies to more efficiently and effectively monitor the performance of their supply chain.
An increasing number of companies are adopting sustainable practices in their operations. This includes implementing environmentally friendly strategies, such as reducing greenhouse gas emissions and responsible waste management. In addition, they are looking to reduce their carbon footprint by adopting more sustainable transportation and logistics practices, such as the use of electric vehicles and optimizing shipping routes.
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Impact of Free Trade Zones in Colombia
Mass customization
The mass production of customized products has become a growing trend in the importance of the supply chain in international trade. This implies greater complexity, as companies need to handle a wider variety of products and adapt to customer needs. Companies are investing in advanced technology and automation systems to meet the challenges posed by mass customization.
Artificial intelligence
Artificial intelligence (AI) is a platform that is becoming heavily involved in global supply chain operations. It is used to improve accuracy in demand planning, inventory management and shipping route optimization. Meanwhile, AI is used to increase predictive capabilities, enabling managers to anticipate customer needs and avoid customer disruptions.
Increased collaboration in the supply chain
Synergies are a new form of global supply chain management. Companies are collaborating more closely with their suppliers, customers and supply chain partners to improve efficiency and effectiveness.
Zona Franca Occidentehas infrastructure and processes that help companies to be efficient in their development processes, which will allow them to develop an organized logistics to be competitive. Learn more about us by click here.
