New survey from DHL focuses on impact of global issues and challenges on SME shippers
A new survey released by global logistics and express delivery provider DHL takes an in-depth look at the impact of global issues and challenges on small and medium-sized enterprises (SMEs). Titled “DHL 2022 Mid-Year SME Survey,” the survey findings are based on feedback from more than 4,000 US-based SMEs, including DHL customers.
Greg Hewitt, CEO of DHL Express US, said ML that the company’s focus when conducting the survey was based on how DHL recognizes that it has very strong and good relationships with its largest customers, both nationally and at executive level through through its commercial organization.
“We did a lot of work to survey and gather information from these customers on how Covid and the supply challenges, or unrest, were affecting them and the workforce, or ‘Great Resignation’. and inflation [and other things] were too,” he said. “We’ve had great insights, we believe, from our large customers who run a lot of our business. What we wanted to do with this survey is say “is it different for SMEs and do they see things differently and do they face maybe different challenges that we don’t appreciate?”
Additionally, Hewitt added that the idea, or spirit, behind the survey was to make sure DHL was there to make sure it was there to support its SMB customers and their challenges. And he added that in reviewing the survey results, he was not “shocked” by the findings, calling them fairly consistent with the same challenges large companies face.
Survey results: A key takeaway from the survey findings is that 61% of respondents said supply chain delays are expected to be their biggest challenge for the rest of the year, compared to 54% who a year ago.
When it comes to the root causes of these challenges, 42% of respondents highlighted logistics costs, 32% noted product availability, 15% said customs compliance, and 11% cited variable laws in international markets. . And, to overcome these challenges, the survey found that 37% of respondents emphasized making new international business contacts – in the form of manufacturers and distributors, among others – to help SMEs lead their business and ship their products more efficiently.
“The initial pinch of Covid around the supply chain was that travel has dropped significantly and the number of commercial flights between the US and Asia and Asia and Europe has dropped significantly,” said he declared. “Most of our customers would still be on planes flying to China to do warehouse and factory tours. It was part of the economy, and those flights carried a lot of cargo. What we didn’t haven’t seen is – and it’s part of the product of how China approaches Covid compared to the western world – still requiring massive lockdowns and quarantine shutdowns, which you haven’t seen coming back.
Going further, Hewitt explained that passenger air travel has not returned in China to a level where there is enough capacity and capacity in the air to ease pressure on fixed networks and major carriers. air freight, in turn maintaining the price. point per kilo at a very high level. He also observed that the Russian-Ukrainian conflict has had a big impact on oil and fuel prices, which puts additional pressure on SMEs, with companies like DHL suffering these increases in fuel surcharges, which are much higher. , and put more cost pressure on them. .
Another change, from 2021 to 2022, Hewitt observes, is that in 2021 the constraint on both the air and, at this time, the ocean, emerging from the Suez Canal crisis and some challenges in ports, there was a real lack of capacity on the ocean, which although a bit better now, hasn’t returned to normal and easy.
“It felt like the product was staged and ready to come to us,” Hewitt said. “It just needed an avenue. So for us, when we added 12% air capacity last year, I felt great going into the high season. We were going to do a great service, which we did, but people said they were hearing a different story from [shippers] worrying about Peak, because they didn’t want us to wear 12%, they wanted me to take 20% or 30% growth. We have simply limited the capacity, because they have products to transport. What we’re seeing now is that it hit production harder this time around. With the Shanghai opening now out of some of the Covid restrictions, we historically would have seen a flood of volume coming to us right away, just sitting on the warehouse dock, waiting for us to say we could pick it up, and we didn’t see that in May.
With things coming back slower, Hewitt observed, this indicates it has hit the supply chain lower, with logistics costs still too high at 42% in the survey and 32% indicating product availability. This shows how the production side has been hit harder in 2022.
Another key finding from the survey is that 65% of SMEs surveyed said they were planning earlier for the holidays, due to expected supply chain delays. It also found that: 31% of respondents plan 1-3 months earlier than they would in a typical year without supply chain issues; 23% plan 4-7 months earlier; and 11% plan 8-12 months earlier.
Hewitt viewed the 65% figure as a bit reactive and a bit of lessons learned over the past two years that if shippers don’t plan early and align and ensure they have the capacity and the necessary capabilities, they could find themselves left out in the fourth quarter.
“One of the things we did effectively last year was communicate that we were adding capacity and capacity on the ground, in terms of the number of routes, agents, clearance staff and call center staff,” he said. “We accelerated by expanding and creating facilities in Los Angeles, New York and Cincinnati that would help us move approximately 18% more parts through what is often a bottleneck with the hub and gateway network. And we added about 12% lift to accommodate it. We communicated it and said ‘well, here’s what it means to you; that means we can probably take a 20% increase in your business and move it around efficiently. But that means you can’t have a peak where you go up 60% or 100% on your normal patterns. If you anticipate this, we need to plan this in advance, so that we can allocate space for you and work with you.
According to Hewitt, this is something that can be done a little more efficiently with customers having more flexibility in their supply chain and understanding their demand and orders a little better, and also putting pressure on production to s sure they can deliver it a bit easier through a longer period.
“The hardest part for the SME group was that they found themselves with, whether from DHL or other carriers, limits and controls during peaks that made them feel like they couldn’t. not getting everything he could have sold or getting in and out of. They say they need to look at that and get things earlier so they don’t face those challenges during peak season.
Other key findings from the survey include:
- 50% of respondents said staffing was not a challenge, 38% were not affected by the talent shortage, 18% were investing in robotics and new technologies, 17% were investing in a presence in online rather than brick-and-mortar, and almost a third had invested in employee benefits/bonuses;
- 42% experienced changes in their international sales due to inflation, with 26% seeing a decrease in international sales due to inflation, and 16% seeing an increase; and 30% of respondents impacted by inflation; and
- 42% of respondents say they will never accept digital currency as a form of inflation, while 11% accept it, 24% plan to accept it, and 23% plan to accept it in the next 2-3 years
To read the full survey, please click here.
About the Author
Jeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics management, Modern material handlingand Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine where he covers all aspects of the supply chain, logistics, freight forwarding and material handling industries on a daily basis. Contact Jeff Berman