Overcoming supply chain challenges
Disruption in global supply chains and rising logistics costs are threatening UK businesses’ ability to grow in domestic and international markets, new Santander research suggests.
This is why Santander is launching Santander Navigator, a new, innovative portal designed to make international growth simple. The online tool guides businesses through every step of international trade, including regulation and shipping, as well as helping users to find the best markets and suitable buyers and suppliers for their products. Drawing on insights, knowledge and connections from Santander’s global network and international ecosystem of providers, Santander Navigator is a subscription service that brings international markets to your fingertips.
The spring 2022 edition of the Santander Trade Barometer warns that more and more British businesses have seen a sharp rise in the cost of transporting their goods. This comes at a time when firms that are reliant on global supply chains are also facing a wide range of new challenges, including war in Ukraine, the impact of further COVID-19 lockdowns in China, and rampant price inflation.
The rising cost of shipping
58% of businesses say that soaring transportation bills will hinder their ability to grow over the next five years, with this figure rising to 85% in the retail and wholesale sector and 70% among manufacturing firms.
Shipping costs are a particular concern for businesses that operate on the international stage. Among these, transport and logistics issues (39%) are second only to bureaucracy (42%) in terms of the most significant challenges they face when trading in overseas markets.
Looking in detail at the specific problems related to transportation, delays are the most pressing issue (cited by 73%), while almost two-thirds (65%) say that they have been confronted with higher shipping container costs and 56% by rising air freight bills.
Meanwhile, almost six in ten businesses (58%) say that it’s currently taking longer than usual for goods to reach their destination, whether this is in the UK or overseas.
Causes of supply-chain pressures
The current problems in global supply chains began due to the worldwide lockdowns imposed at the start of COVID-19 in early 2020. But while it had been hoped that most of these issues would have started to ease in 2022, recent developments such as the conflict in Ukraine and new COVID-19 lockdowns in some major Chinese cities, appear set to prolong the crisis. Commodity prices have risen, and continue to rise, and all of these factors combined are now filtering into shopping baskets and the items we consume.
For British businesses, the new trading arrangements with the European Union are also a source of difficulty. Santander’s most recent Trade Barometer research found that over a third (35%) of businesses cited supply chain links to firms in EU member states as their main concern when it comes to the post-Brexit trade agreement, introduced at the start of 2021.
Meanwhile, 72% of businesses say that the new customs procedures for trade with Europe have created additional costs or delays.
Adapting to current conditions
Businesses that are best able to adapt to the shifting trade landscape and the challenges it presents will have the greatest chance of success. Already, Santander’s research shows that many companies are starting to make the necessary investments. Almost a fifth (19%) plan to invest in supply chain transformation over the next 12 months, rising to 26% in the Transport and Logistics and Manufacturing sectors, both of which are heavily dependent on cross-border trade.
The process of international trade has become more streamlined over recent years but there are still considerable improvements to be made through the take-up of digital services, provided they are implemented in a cost-effective way.
How we can help
Santander Navigator provides a personalised experience for each user and includes a logistics solution, where businesses can select from a range of shipping providers, allowing them to pick the option that best meets their needs, whilst providing them with greater visibility over their shipments. The portal also houses insights from Santander’s experts and its global network of providers, including shipping and logistics updates from across the world.
For more information about Santander Navigator visit www.santandernavigator.co.uk or contact santandernavigator@santander.co.uk. You can read the full Trade Barometer report here