SMEs will power growth in emerging markets, according to new survey

11th March 2019, Bath, UK: SMEs will power growth in emerging markets, according to a survey of more than 500 logistics industry professionals

  • One third (33.3%) of respondents believe that small and medium size companies (SMEs) will grow fastest in emerging markets over the next five years, as opposed to 21.3% who envisage faster growth in large multi-national companies.
  • Challenges clearly remain, however – trade bureaucracy is the most significant growth inhibitor for SMEs participating in cross-border trade, according to survey respondents.


The research, undertaken as part of the Agility Emerging Markets Logistics Index 2019 and produced by Transport Intelligence, highlights important implications of faster SME growth in emerging markets for logistics providers.

SME shippers are typically associated with higher margins than large shippers. Winning additional business from SMEs has been an ambition of many of the world’s largest LSPs, with the widespread rollout of online freight quotation and booking platforms renewing the focus. With e-commerce making sales to international markets easier, and technology being used to reduce the complexity of global trade, it is conceivable that SMEs will see both act as drivers in their growth over the coming years.

Utilising technology to modernise customs systems and processes will be the most important factor in facilitating emerging markets trade growth over the next five years, according to survey respondents. This is due to the impact trade facilitation has on competitiveness and its increasing importance in attracting FDI. Border procedures, i.e. those concerning customs clearance and inspection, account for the largest proportion of costs and time associated with imports. Such costs and time delays are more acute among emerging economies than among developed economies.

The challenge for emerging economies will be to reduce bureaucracy relating to trade permits and customs clearance to minimise the administrative requirements for imports and exports and ultimately provide a business-friendly environment for the SME sector.

The survey is part of the 2019 Agility Emerging Markets Logistics Index, the 10th annual snapshot of industry sentiment and ranking of the world’s 50 leading emerging markets, produced by Transport Intelligence and Agility. The Index is a broad gauge of countries’ competitiveness based on their international and domestic logistics strengths and business fundamentals.

The Index ranks 50 countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors. The top 10 are: China, India, United Arab Emirates, Indonesia, Malaysia, Saudi Arabia, Mexico, Qatar, Turkey and Vietnam. China, India and Indonesia rank highest for domestic logistics; China, India and Mexico are tops for international logistics; and UAE, Malaysia and Qatar have the best business fundamentals.

Elsewhere in the survey, respondents highlight the potential downside risks of a potential trade war between the U.S. and China – survey respondents are clearly pessimistic, indicating a belief that trade volumes between the U.S. and China will fall more than 10% in 2019 as tariffs and wider uncertainty see businesses in both markets seek alternative sourcing and sales opportunities. There will be winners, though, with 56.1% demonstrating a belief that Southeast Asian markets stand to benefit from ongoing trade tensions between the U.S. and China.

John Manners-Bell, Chief Executive of Ti, says: “This year’s Index highlights the range of challenges and opportunities many markets face. The uncertainty which surrounds trading relationships, combined with implementation of new trade barriers, threatens to derail integration of emerging markets with the rest of the world. It is essential that obstructive trade policy does not stand in the way of commercial opportunities which help drive growth in emerging markets.”

Agility Emerging Markets Logistics Index 2019 highlights:

  • China and India top the 2019 rankings based on their size and strength as international and domestic logistics markets, but lag smaller rivals in Business Fundamentals, a category that ranks countries based on regulatory environment, credit and debt dynamics, contract enforcement, anti-corruption safeguards, price stability and market access. China ranks No. 7 and India is No. 10 for Business Fundamentals.
  • The strongest clusters of emerging markets are in the Arabian Gulf and Southeast Asia, thanks to business-friendly conditions and core strengths – the Gulf’s energy wealth and Southeast Asian manufacturing power – that draw logistics activity. In the Gulf, UAE (No. 3), Saudi Arabia (6), Qatar (8), Oman (12), Bahrain (16) and Kuwait (18) rank highly. Among ASEAN countries, Indonesia (4), Malaysia (5), Vietnam (10), Thailand (11) and Philippines (20) are strong.
  • Several countries would surge in the rankings if they could improve Business Fundamentals: Brazil, Philippines, Argentina, Bangladesh, Nigeria, and Bolivia. African economies with relatively strong logistics markets and potential – Uganda, Libya, Mozambique, Angola – are severely hamstrung by weak Business Fundamentals.
  • Against a backdrop of trade friction and data showing China’s economy slowing, survey respondents see India as the market with greatest potential over China, their second choice.
  • Some 58.9% of survey respondents expect emerging markets to seek concessions from the UK in post-Brexit trade deals. In addition, 69.3% of survey respondents think emerging markets will be unaffected or will in fact benefit from Brexit.
  • Iran’s near-term potential has evaporated as a result of re-imposed U.S. sanctions. Nearly 75% of those surveyed say Iran is “less promising than before” or “not at all promising.” Iran ranks 49 the of 50 countries as an international logistics opportunity.
  • Sub-Saharan Africa is a mixed picture. South Africa (24) is an underperformer. But in rankings of Business Fundamentals, Ghana and Kenya do relatively well at No. 19 and No. 21. Nigeria, which vies with South Africa to be the region’s largest economy, suffers from poor business conditions, an area where it ranks 44th.


Agility Emerging Markets Logistics Index is available to download here.

Transport Intelligence (Ti) is one of the world’s leading providers of expert research and analysis dedicated to the global logistics industry. Utilising the expertise of professionals with many years of experience in the mail, express and logistics industries, Transport Intelligence has developed a range of market leading web-based products, reports, profiles and services used by many of the world’s leading logistics suppliers, consultancies, banks and users of logistics services.

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