SMEs: 6 Main Logistics Challenges and Solutions5 min read
logistics challenges for SMEs

Logistical challenges that small & medium enterprises are facing in 2023

Small and medium enterprises (SMEs) face similar logistics challenges to large companies but can find them more difficult to overcome. In fact, 8 out of 10 SMEs consider logistics as a challenge for their business. In this article, we will explore the primary logistics challenges that SMEs face and suggest potential solutions to help overcome these obstacles, enabling your business to thrive in a highly competitive market.

What is your main logistics struggle? Take part in our poll to see the main logistics challenges that other SMEs experience.

1. Increasing shipping costs

One of the biggest logistics challenges faced by SMEs in Europe and worldwide is high shipping costs, which can account for up to 10% of a product’s final price. This can be a significant burden for SMEs, especially those that are just starting out. Some of the factors that can increase shipping and logistics costs include:

  • Fuel prices
  • Vehicle shortages

Solution: use groupage services and partner with 4PLs and/or other businesses in your network. This can involve sharing the expenses of shipping and sourcing products from the same suppliers or location. Also, this approach enables the distribution of workload and responsibility among all parties involved.

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2. Fluctuating demand

When demand for products or services fluctuates, it can be difficult for SMEs to adjust their logistics operations to meet changing customer needs. This can lead to stockouts, overstocking, and other inefficiencies impacting customer satisfaction.

Solution: implement a demand-driven logistics strategy. This approach uses real-time data and cutting-edge software to monitor customer demand and adjust logistics operations accordingly. By doing so, SMEs can better anticipate changes in demand and adjust their logistics operations to meet customer needs in a timely and cost-effective manner. This can help improve customer satisfaction, reduce costs, and increase profitability.

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3. Difficulty tracking shipments

Small and medium businesses may encounter logistics challenges due to difficulty in tracking shipments. Without proper tracking, SMEs may not be able to monitor the status of their shipments and address any issues that arise.

Solution: use a logistics platform that offers real-time shipment tracking and updates. This can help SMEs stay informed about the status of their shipments and take proactive steps to ensure timely delivery and customer satisfaction.

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4. Delays and communication issues

Wrong or late deliveries can also impact communication between small and medium-sized enterprises and their customers. When products are not delivered on time or are misdelivered, it can lead to a breakdown in trust and loyalty, making it difficult to retain customers. This can be particularly challenging for smaller businesses, as they may not have the resources to absorb the financial impact of lost sales.

Solution: implement tools to improve communication with your customers, such as automated delivery updates. By establishing clear communication channels and providing customers with accurate and up-to-date information, businesses can build trust and improve customer satisfaction.

better communication

5. Lost or damaged shipments

This can impact the ability of SMEs to compete in the European marketplace. Up to 71% of European consumers say delivery is a key factor in their online shopping experience. When products are lost or damaged during shipment, it can negatively affect the business’s reputation and make it difficult to attract new customers.

Solution: focus on improving your logistics processes and establishing a reputation for reliable and high-quality delivery. By partnering with reliable logistics providers such as Eurosender and implementing tools to monitor and optimise logistics performance, businesses can improve their delivery times and build a reputation for excellence in customer service. Additionally, businesses can consider investing in insurance coverage to protect against the financial impact of lost or damaged shipments.

6. Lack of storage or warehousing options

Small and medium-sized enterprises face a number of logistics challenges when it comes to storage and warehousing. The average cost of warehousing in Europe is €50 per square metre per year. This can be a significant financial burden for businesses that are already operating on tight margins.

Solution: work with logistics providers to identify cost-effective storage or warehousing options. By partnering with logistics providers that offer competitive pricing and flexible contracts, businesses can optimise their storage costs and improve their bottom line.

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How can Eurosender help small businesses improve their logistics?

At Eurosender, we offer solutions to help SMEs overcome logistics challenges. We recognise that technology is key in addressing these challenges and we are committed to staying up to date with the latest technological advances.

Whether you need to send a couple of parcels a month or ship every week, we have got you covered! We offer instant quotes and tailored solutions to meet your shipping needs, making the process as simple and hassle-free as possible. So, if you are looking to streamline your shipping process and improve your logistics, Eurosender is the perfect solution for you!

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