Key trends for 2024: What will drive SME growth?

SME Publications/ SME XPO 2024

By Rob Peto, below, Vice President of Operations – UK and Ireland, FedEx Express

With 2024 just around the corner, now is a good time to reflect on the key trends and opportunities to capitalise upon in the new year. While overall GDP growth in the UK is expected to remain below 1% in 2023 and 2024, there are still plenty of opportunities for SMEs and their logistics provider to win – together. Businesses that take advantage of cross border e-commerce growth, work with providers that leverage rapidly emerging AI technology to develop more predictive capabilities, and work closely with their logistics provider on intelligent data-sharing will be well positioned for success.       

Cross-border e-commerce is growing

After phenomenal growth during the pandemic, e-commerce sales have normalised in the last couple of years. However, with traditional high street retail becoming less and less a part of our lives and consumers shopping cross-borders in search for bargains, e-commerce continues to grow. By next year, more than a fifth (21.2%) of all sales worldwide will be made online, and e-commerce will continue to be the driving force behind sales growth for the foreseeable future.

Cost-conscious European consumers are increasingly turning to international e-commerce in search of the best deals, driving cross border sales growth: almost three-quarters (71%) of millennials and 60% of Gen Zers in Belgium, France, the Netherlands, Portugal, Spain, and the UK shop cross-border several times a year, according to a June 2023 report by Worldline.

All of this creates huge opportunities for UK businesses – and many are doing well, adapting effectively by configuring their inventory and websites to capture international sales. However, companies need to ensure the carriers they choose can provide all the features they need to expand into new markets, including smooth handling of international returns and deliveries. 

Improvements in technology and forecasting capabilities are accelerating

Another trend to watch is the increasing improvements in real-time data and forecasting. Logistics providers are now able to take more of a helicopter view of complex international supply chains, rather than just having domestic intelligence. The visibility and traceability of goods is getting more and more advanced, with real-time tracking and alerts for any possible delays or disruptions. During the pandemic, FedEx put a lot of this technology into play to quickly and reliably move critical vaccine shipments, and it is now using this technology in its everyday operations to see across the whole supply chain.

By using AI and machine learning to analyze this data, carriers are able to predict potential issues in advance, whether they’re weather-related or customs-related for example. This is especially helpful when planning delivery or return routes and times. SMEs looking for a logistics provider to support their operations should evaluate providers’ capabilities here.

Because FedEx has improved monitoring and forecasting capabilities, we are able to run operations much more efficiently since we know exactly how much space is available on an aircraft, trailer, lorry, or truck. A newly launched import system at our Stansted Airport facility means we can capture data points, via barcode scanning, allowing us to provide instant updates to our operations teams and the customer receiving the goods.

Data-driven communication will build stronger, proactive partnerships

As AI technologies become increasingly more powerful and more affordable, their adoption will spread from the logistics companies themselves to the businesses they serve. The process will result in a more user-friendly interface between the seller and the logistics provider, as well as a more data-driven, real-time communication between them. This more intelligent data sharing between SMEs and their logistics providers will enable everyone to get an earlier view of any upcoming peaks in activity, so they can plan operations accordingly.

It is much easier for logistics companies to adapt to the changing needs of their customers if they can better integrate with their customers’ inventory systems and have a continuous flow of real-time data. As more and more companies grow their international e-commerce sales, with peak times that may or may not coincide with traditional high street sale periods, it’s becoming increasingly important to have a logistics provider that proactively adapts to help them stay a few steps ahead. Data-driven collaboration will be key.

For now, many businesses will have a more limited, albeit very helpful, form of system interface – such as scanning a package and automatically printing labels and receipts. So, in the meantime, it’s important that businesses talk to their logistics providers about what volumes and sales destinations they expect, and when. A new business idea, a promotion, a new type of product or required packaging – all of these change a company’s logistics profile very quickly.

Making the most of 2024

With good two-way communications, intelligent sharing of data and a high quality, reliable international logistics providers, plus an eye on how to expand and grow internationally, UK businesses will be well placed to take advantage of growth opportunities in 2024 and beyond.

SME Publications/ SME XPO 2024