Inside Logistics

Logistics costs to increase for SMBs

Nearly half of small to mid-sized businesses estimate they will spend more on shipping in 2020 over 2019

February 12, 2020

Nearly half (47 percent) of small to mid-sized business decision makers who have involvement or influence in distribution/logistics and/or procurement/purchasing estimate they will spend more on shipping in 2020 over 2019.

The 2020 SMB Shipping Strategies Report, conducted online, also revealed SMB shipping spend is being influenced by big-box retailers. In fact, 25 percent of SMB decision makers said the logistics strategies of Amazon and Walmart are influencing how their company thinks about shipping, while 27 percent said those strategies are influencing how their customers think about shipping.

The top-down pressure from big-box players is creating an underlying tension within the mid-market, which includes companies that likely don’t have the same infrastructure and resources to support aggressive logistics strategies.

As a result, the debate for SMBs boils down to where they invest resources for logistics: teams or technology? The study finds 20 percent of SMB decision makers would rather invest in the right logistics team over technology, while nearly 30 percent plan to make new technology a priority.

However, 14 percent of SMB decision makers say investing in new technology is too expensive, while 17 percent prefer to invest in alternatives to traditional shipping options such as UPS, FedEx, XPO Logistics, and freight brokers.

“The decisions of small and mid-sized business owners are being heavily influenced by the rise of big-box retailers like Amazon,” said Kris Lamb, CEO of uShip, which sponsored the survey. “So, SMBs are beginning to rethink how they invest their shipping and logistics dollars. Our hope is that these insights convey the pressure being felt across the industry and inspire SMBs to find new ways to incorporate supply chain and logistics strategies.”