A majority (57%) of small- and medium-sized businesses (SMBs) experienced a drop in consumer demands over the last 12 months according to a recent report.
A study from the logistics company Freightos, entitled “Navigating Uncharted Waters: Out of the Fort and Into the Moat,” showed that over a third of small businesses (36.1%) are now faced with excess inventory due to the demand drop-off.
At the same time, SMBs have begun shifting their sourcing patterns to counteract the ripple effects brought on by the COVID-19 Pandemic with 25% of importers saying they are exploring sourcing opportunities in other countries while another 21% claim they are looking into sourcing their products domestically.
When asked what some of the biggest causes were for demand reductions, 48.1% of responders said inflation was the most important factor. Almost a quarter of responders (23.2%) blamed the reduced demands on increased interest rates.
Judah Levine, the head of research for Freightos, said the recent stall in ILWU - PMA contract negotiations will further hurt suppliers as they try to recover from the impacts of COVID-19.
“Prolonged action will significantly impact truckers’ ability to both pick-up and drop off containers, and cause delays and increased storage fees for export containers and for imports already at container yards or unloaded during a slowdown,” Levine wrote. “They would also cause delays and congestion in the form of ships waiting to dock – which will tie up capacity and put upward pressure on freight rates – and a possible buildup of containers in container yards, which could in turn slow the speed at which ships will be unloaded and further impact trucking.”
Data for the “Navigating Uncharted Waters: Out of the Fort and Into the Moat” survey was compiled from interviews, conducted during May 2023, of 500 SMBs that utilize Freightos.com’s global freight marketplace.
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