In run-up to holiday season, survey results highlight unprecedented level of uncertainty among small and medium size business
Today international freight booking and payment platform Freightos released the results of a survey highlighting the experiences and expectations of small and medium-sized businesses (SMBs) with regards to the supply chain, current market landscape, and the upcoming holiday season. Findings show that on top of almost three years of supply chain chaos, global macroeconomic factors have left SMB importers and exporters uncertain whether to be concerned about reduced demand or about lacking sufficient inventory for increased demand.
According to the survey of over 1,200 small- and medium-sized importers on the Freightos marketplace platform, businesses have been hit hard by supply chain costs: 87% of respondents attributed reduced bottom lines to logistics costs. Businesses also reported dedicating larger percentages of operating costs to shipments: 22% of businesses currently spend over 20% of their operating budgets on shipping goods; compared to less than 13% of businesses prior to the pandemic.
Unpredictable consumer demand and volatile market conditions are currently top of mind for businesses, with an unpredictable market wreaking havoc on importer expectations: 74% of respondents are worried about how demand will impact their inventory or sales. Interestingly, 50% are concerned about the prospect of a reduction in demand during the holiday season, while 24% are worried that an unexpected surge in demand would leave them with insufficient inventory to meet demand.
“Navigating the complexities of international trade is tricky enough for businesses without the added obstacles that have cropped up over the past few years,” said Zvi Schreiber, CEO and founder of Freightos. “During the pandemic, 50% of businesses blamed the supply chain for their losses. Over the pandemic, importers have lost faith in the shipping network and now even when it’s running well, they are accumulating expensive inventory buffers. Now, just as we’re finally seeing the supply chain start to stabilize, importers are faced with a new variable – demand. Now, looking towards the holidays, the only thing they can predict is unpredictability.”
Over the past three years, importer and exporter businesses have contended with unprecedented price fluctuations. According to Freightos.com data, between 2019 and 2022, the cost of shipping a full container of goods from manufacturing centers in China to a distribution center in the United States jumped from $3,500 in 2019 to $25,463 in late 2022, now having regressed to approximately $6,500.
Other key findings from the 2022 Freightos Small Business Survey can be found here.
About Freightos Limited
Freightos® operates a leading, vendor-neutral booking and payment platform for international freight. Freightos’ platform supports supply chain efficiency and agility by enabling real-time procurement of ocean and air shipping across more than ten thousand importers/exporters, thousands of forwarders, and dozens of airlines and ocean carriers.
Freightos.com is a premier digital international freight marketplace for importers and exporters for instant pricing, booking, and shipment management. Thousands of SMBs and enterprises have sourced shipping services via Freightos across dozens of logistics service providers.
WebCargo® by Freightos is a leading global freight platform connecting carriers and forwarders. In particular, it is the largest air cargo eBooking platform, enabling simple and efficient freight pricing and booking between thousands of freight forwarders, including the top twenty global freight forwarders, and hundreds of airlines, ocean liners and trucking carriers. Airlines on the platform represent over a third of global air cargo capacity. WebCargo also offers software as a service for forwarders to facilitate digital freight rate management, quoting, and online sales.
Freightos Data calculates the Freightos Baltic Index, the industry’s key daily benchmark of container shipping prices, the Freightos Air Index, as well as other market intelligence products that improve supply chain decision-making, planning, and pricing transparency.
Freightos is a widely recognized logistics technology leader with a worldwide presence and a broad customer network.
Incorporated in the Cayman Islands with offices around the world, Freightos plans to go public on Nasdaq by combining with Gesher I Acquisition Corp. (NASDAQ: GIAC). More information is available at freightos.com/investors