Amid a drop in UK goods exports, international logistics specialist Aramex UK has urged logistics providers to offer greater support to SMEs in expanding their reach to overseas markets.
According to Umar Butt, CEO of the UK and Europe at Aramex, many within the industry are guilty of making it harder for small to medium sized businesses to trade internationally by imposing several barriers, ultimately limiting their access to effective logistics solutions and advice.
This comes as UK goods exports continue to decline, with recent reports revealing that, aside from Japan, the UK has recorded the weakest export performance among G7 nations over the past decade.
Generally, the UK imports significantly more than it exports, meaning that it runs at a trade deficit, however the gap has been widening. A significant factor behind this is a growing weakness in goods exports. As shown in the final quarter of 2024, the UK’s trade performance in goods declined, with export volumes falling by 5 percent to the EU and 5.2 percent to the rest of the world.
In 2024, a £204 billion deficit in goods trade was partially balanced by a £176 billion surplus in services trade, resulting in an overall trade deficit of £28 billion.
With only 10 percent of SMEs exporting to international markets, Aramex UK believes that this gap has the potential to be shortened if access to premium logistics partners were made more accessible.
Last year, high-street bank giant Santander highlighted that over 52 percent of UK businesses believed trading overseas was a growth driver, with 39 percent of companies considering expanding abroad within the next three years, up from 17 percent the year before.
With an appetite among small to medium sized businesses to trade overseas, providing SMEs with the necessary tools and consultation to open themselves up to new international markets will be key to unlocking further economic growth for the UK and reducing the widening trade deficit according to Umar Butt at Aramex – as long as the international logistics industry shifts its outlook and begins to view SMEs as valuable customers rather than as a mere afterthought.
Umar commented: “While exporters account for a relatively small share of the total UK business population, a significant number of companies have the potential to enter
international markets but have yet to do so. Encouraging these businesses to export presents a major opportunity to drive GDP growth in 2025 and beyond from our point of view.
“Although there is certainly a major role for the government to play in lending a hand to helping businesses overcome the barriers to exporting they face, the bigger players within the industry must also step up by offering more accessible logistics solutions to UK SMEs. This can be done by reducing restrictive requirements such as volume caveats, which is a common issue among smaller sized businesses as they often struggle to meet the minimum order thresholds, or allowing SMEs to pay based on the volume they actually ship rather than being locked into rigid pricing tiers.
“Ultimately, there’s a significant legacy issue in the international logistics sector, where many providers continue to chase the same blue-chip companies, overlooking SMEs and their potential as a consequence. That outdated mindset needs to change to level the trading playing field. As a business model it’s not particularly sustainable either and with the rise of e-commerce ever increasing, the demand for adaptable and scalable logistics solutions is only going to grow.”
With an ambition to make global expansion more accessible for SMEs, Aramex UK recently launched its SME programme, pledging to avoid implementing any volume caveats, credit restrictions or price limits for low volumes, enabling brands to compete globally by removing any unnecessary barriers.
Having directly worked with over 3700 start-ups last year and boasting 35,000 SME clients currently across the globe, Aramex provides a one-stop logistics shop service which is entirely customisable to the needs of its small to medium sized clients within the UK and across the globe.
This week, Aramex’s Umar Butt will be presenting Exporter of the Year at the annual SME National Awards.
Umar continued: “SMEs play a significant role in the UK’s economy, contributing 25 percent to the nation’s overall GDP and around half of the turnover of the nation’s private sector. Yet only a fraction of the community trade internationally, which begs the question of why that is?
“From our experience it boils down to two core issues: a lack of flexibility in the market caused by providers enforcing rigid requirements that are effectively designed for large-scale exporters rather than the needs of smaller businesses and secondly, a shortage of available resources and guidance to help smaller businesses to navigate complex areas such as customs regulations, shipping costs, and compliance requirements.
“Further support in Westminster is obviously needed, but as an industry we can play a critical role in removing these obstacles for the next generation of growing businesses by changing how we perceive SMEs as a means of generating revenue and instead recognise their long-term potential, not only for driving GDP growth, but also strengthen the foundation of our own sector.”