UPS says shippers should be bullish on exports
December 28, 2011
America’s political leaders have recognized the importance of U.S. exports to the economy and just recently approved three free trade agreements, but a new survey shows more needs to be done to educate small- and mid-sized businesses (SMBs) on the potential of engaging in global trade.
The UPS “Perceptions of Global Trade” survey of more than 1,000 SMBs, conducted for global logistics company UPS, found that 24 percent of the nation’s small and medium-sized businesses currently are engaged in global commerce.
Those SMBs who don’t export any of their products say the dour economic news of recent years has discouraged them, “but that’s exactly why SMBs should be expanding to international markets,” observed Dan Brutto, president of UPS International.
“With 95 percent of the world’s consumers located beyond U.S. borders, it’s clear that the path to economic growth is through opening new markets for U.S. businesses,” Brutto added. “This survey tells me that all of us in a leadership position need to step up our efforts to support and educate small-business owners in particular on the potential of markets outside the United States.”
As part of that support, the U.S. National Export Initiative aims to boost exports from $1.57 trillion in 2009 to $3.14 trillion by 2015 by eliminating trade barriers and increasing access to export financing, among other measures. A large bipartisan majority in Congress just approved three new free trade agreements with South Korea, Colombia and Panama. President Obama signed the new accords on Oct. 21.
But according to John Larkin, managing director at Stifel Nicolaus, a Baltimore-based investment firm, there’s legitimate reason for shippers to be cautious.
“The headwinds are significant,” he said in an interview. “They include the European debt crisis, instability in the Middle East, and uncertain economic growth rates in Asia.”
Nonetheless, UPS reports that the SMBs who already export report plenty of upside. Of the exporters surveyed, 64 percent saw a financial return within two years and 34 percent saw a financial return in less than six months.
Almost half (49 percent) of respondents said they expect to double their businesses’ exports by 2015 and 66 percent say that up to 25 percent of their annual revenue comes directly from exporting.
Subscribe to Logistics Management magazine
entire logistics operation. Start your FREE subscription today!