It’s not the cost that worries SMBs, it’s the element of unpredictability
This article was originally published on July 28, 2018 in Global Trade Magazine.
By Mike Meierkort, President, International Freight & Transportation Solutions
Small and medium-sized businesses across North America have been facing an unusual sort of competitive threat from the big business community over the past few years.
Main Street businesses have always struggled to compete with big-box stores on price with the latter capitalizing on the economies of scale they achieve by purchasing and selling in high volumes.
But now those economies of scale are putting pressure on SMBs to compete on supply chain reliability, which has a reverberating effect on everything from cash flow and inventory control to customer service and market reputation.
Truckers earn more for delivering shipments of export cargo and import cargo in international trade.
The ongoing trucker shortage that has pushed rates up more than five percent over the past year is having a far more profound effect than just increasing the cost of moving goods. While higher rates are certainly cause for frustration, total spend on freight generally doesn’t far exceed five percent of total cost inputs. A five-percent increase on something that only makes up five percent of total spend isn’t something that triggers CFO alarm bells.
But there’s an element of the trucker shortage that goes well beyond cost and ripples through supply chains to wreak havoc on everything from inventory control and warehousing costs to customer service and market reputation. That element is reliability.