New research from Freightos has shed some light on rampant inefficiencies within the global freight sector and trends impacting the growing import-export industry in the U.S.
While importing continues to grow across both small and medium enterprise companies, almost 50 percent of the more than 300,000 U.S. businesses that import still use spreadsheets to manage their international supply chain.
Global trade is worth trillions of dollars, and U.S. Department of Commerce data reports a 6.7% year-on-year increase in U.S. imports in 2017–the fastest rate of growth in more than seven years–yet the industry remains siloed and outmoded, according to logistics technology company Freightos.
Freightos conducted a survey to reveal how cumbersome logistics remains to U.S. companies importing goods.
Among the findings of the survey released Tuesday were that 42.4% of business owners spend more than two hours (or an estimated $100 of labor) on managing each individual shipment, 10 percent of small business owners reported more than 75 percent of shipments arrive late and only 11.7% of large importers feel their freight providers are technologically advanced.
Among companies that import only four to 10 shipments a year, almost half still spend over $10,000 a month on international freight, while 11.8% spend more than five hours on average managing an individual freight shipment.
[Read more about logistics: The Top Six Logistics Issues Companies Will Face in 2018]
More than 60 percent of midsize importers spend more than two hours managing each shipment, wasting anywhere from 20 to 500 hours a year managing shipments.
For companies that import more than 100 times a year, 37 percent spend more than two hours managing each individual shipment and 12 percent spend over 10 hours.
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When asked what percent of their international freight shipments arrive on-time, 29.7% of business owners in the survey admitted that less than half of their shipments arrive on time. Only 34.7% report timeliness in the top 25th percentile, while 65 percent of small business owners say that only 75 percent of their international freight shipments arrive on time.
Across the board, only 35 percent of importers said that goods arrive on-time 75 percent of the time or more and 65 percent of companies that import goods suffer from delays at least 25% of the time they ship goods.
In the area of how technologically advanced their international freight providers were, about 25 percent of large importers said their forwarders were more advanced than other service providers, while only 7 percent of small importers said the same.
As for tracking shipments, 83 percent of importers report that they do not have full visibility into the location of their shipment during the import process.
“Ask any freight forwarder or business owner, and they’ll agree–international freight, particularly for small and midsize businesses, is long overdue for an upgrade,” said Zvi Schreiber, chief executive officer of Freightos. “These survey results put real data to the all-too frustrating obsolescence of the technology used to manage international shipments, and provide valuable insight into the motives behind the rapid growth in logistics technology investments.”
The survey, conducted in the fourth quarter of 2017, was jointly carried out with Google Surveys based on a representative sample of more than 500 midsize businesses in the U.S. that are shipping goods around the world.
Freightos is a leading online marketplace for international shipping, powering over $1 billion in global trade every year. Freightos also provides Freightos AcceleRate software-as-a-service to automate pricing and routing for leading carriers, freight forwarders and shippers.