When it comes to Exporting – Logistics is Local
According to data from the U.S. Commerce Department, less than one percent of U.S. companies’ export – and of those that do, 58 percent export to only one country, typically to Mexico or Canada. U.S. businesses’ rate of participation in the export market is significantly lower than other developed countries.
With all the talk about “the global marketplace,” the perception for many was that exporting companies were the norm, and that companies without export markets were being left behind. This line of thinking was fueled when President Obama set a goal of doubling U.S. export growth by 2015.
In fact, most U.S. companies do not export and according to at least one logistics expert, businesses should be careful not to enlist a logistics carrier that specializes in “global service,” when a more regional approach is needed. “We know that globalization has been vastly exaggerated, and that relying on a ‘mega-forwarder’ is not always the distribution answer,” Shay Scott, director of the Global Supply Chain Institute at the University of Tennessee recently said in an article that appeared in Logistics Management. Instead, Shay concludes that most U.S. businesses “only require a basic forwarder.”
This sentiment is echoed by Pankaj Ghemawat of IESE Business School in Spain, and author of World 3.0. In his book, Ghemawat notes ,“the number of American companies with any foreign operations is vastly overstated.”
Businesses should focus on finding a logistics partner that best meets its specific needs. Buy only the logistics you need and do not be swayed by glitzy advertising and sales talk that offers unnecessary global reach. U.S. businesses that export to Canada, for example, should partner with a logistics provider with Canadian expertise. As Shay points out, “Many of the smaller forwarders have better relationships with Customs than the bigger players.”
This local expertise can be extremely valuable, especially when a “routine” shipment goes awry. “Imagine your goods have gotten stuck somewhere en route – perhaps the paperwork wasn’t filed correctly because the regulation has changed, or the promised transportation service didn’t materialize,” says Delcan Corp. senior business analyst Rosalyn Wilson. “The delay can hit your bottom line in terms of dollars, but can also damage the reputation of your product or company.”
At a time when many U.S. businesses are looking to Canada – and its 34 million potential new customers – having the right logistics partner can be a very valuable tool. The trick though, is taking the time to research options and choose the provider that will be the best fit.